UNITED STATES 

HOUSE OF REPRESENTATIVES

AUDIT REPORT

Audit of the Financial Statements

For the Fiscal Year Ended September 30, 2013

Report No. 14-HSW-09

May 9, 2014

Table of Contents

Office of Inspector General Audit Report Summary .......................................5

Management’s Discussion & Analysis............................................................9

Independent Auditor’s Report.....................................................................17

Chief Administrative Officer’s Audit Report Response..................................37

Fiscal Year 2013 Financial Statements..........................................................41

Consolidated Balance Sheets..................................................................... 44

Consolidated Statements of Net Cost ........................................................ 45

Consolidated Statements of Changes in Net Position ................................ 46

Combined Statements of Budgetary Resources......................................... 47

Notes to the Financial Statements...............................................................49

Required Supplementary Information..........................................................73

Other Information .......................................................................................79
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Office of Inspector General

 Audit Report Summary
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Office of Inspector General Audit Report Summary

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Management’s Discussion & Analysis
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Management’s Discussion and Analysis (Unaudited)

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Management’s Discussion and Analysis

Fiscal Year 2013

Introduction

Management’s Discussion and Analysis (MDA) provides a high level overview of the origin and mission of the U.S.

House of Representatives. Fiscal Year 2013 (October 1, 2012 – September 30, 2013) coincided with sessions of the

112th and 113th U.S. Congress. The 20th Amendment to the U.S. Constitution establishes that the terms of

Representatives end on noon of the 3rd day of January, and “The Congress shall assemble at least once every year,

and such meeting shall begin on the 3rd day of January.” Accordingly, the 112th Congress ended and the 113th

Congress began on January 3, 2013.

Origin, History, and Mission

The U.S. House of Representatives (House) is one of two legislative chambers that comprise the Congress of the

United States (the other is the U.S. Senate). Article I, Section 1 of the Constitution, adopted by the Constitutional

Convention on September 17, 1787, created and vested all legislative powers to the Congress.   

Location, Size, and Organization

The House chamber is located in the U.S. Capitol in Washington, DC. Other House administrative buildings in

Washington, DC include the Cannon, Longworth, Rayburn and Ford House Office Buildings.  

Law fixes the number of voting representatives in the House at no more than 435, proportionally representing the

population of the 50 states. Also referred to as a congressman or congresswoman, each representative is elected

to a two‐year term serving the people of a specific congressional district. Among other duties, representatives

introduce bills and resolutions, offer amendments and serve on committees. To be elected, a representative must

be at least 25 years old, a United States citizen for at least seven years and an inhabitant of the state he or she

represents.

Article 1, Section 2 of the Constitution provides for both the minimum and maximum sizes for the House of

Representatives. Currently, there are five delegates representing the District of Columbia, the Virgin Islands, Guam,

American Samoa, and the Commonwealth of the Northern Mariana Islands. A resident commissioner represents

Puerto Rico. The delegates and resident commissioner possess the same powers as other members of the House,

except that they may not vote when the House is meeting as the House of Representatives.  

The Rules of the House, adopted at the beginning of each new Congress, allow for the creation of standing and

special and select committees. During the 112th and 113th Congress the committees were:   

Committee on Agriculture

Committee on Appropriations

Committee on Armed Services

Committee on the Budget

Committee on Education and the Workforce  

Committee on Energy and Commerce

Committee on Ethics  

Committee on Financial Services

Committee on Foreign Affairs

Committee on Homeland Security

Committee on House Administration

Committee on the Judiciary

Committee on Natural Resources

Committee on Oversight and Government Reform

Committee on Rules

Committee on Science, Space, and Technology  

Committee on Small Business
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Committee on Transportation and Infrastructure

Committee on Veterans’ Affairs

Committee on Ways and Means

Permanent Select Committee on Intelligence

The joint committees were: the Joint Economic Committee, the Joint Committee on the Library,    the Joint

Committee on Printing and the Joint Committee on Taxation.

House Leadership

Article I, Section 2 of the Constitution states, “The House of Representatives shall chuse (sic) their Speaker and

other officers.” In addition to the Speaker, each political party in the House has a leadership hierarchy, typically

including a Majority Leader, Minority Leader, Majority Whip, and Minority Whip.  

House Officers and Organizations

Rule II of the Rules of the House for both the 112th and 113th Congress provided for the election of four officers to

support House operations: a Clerk, a Sergeant‐at‐Arms, a Chief Administrative Officer and a Chaplain. The Rules of

the House also established the Offices of Inspector General, Historian and General Counsel.

Under House Rule II, the Chief Administrative Officer has “operational and financial responsibility for functions as

assigned by the Committee on House Administration and shall be subject to the oversight of the Committee on

House Administration.” According to Committee on House Administration records, the Chief Administrative Office

has been designated as the disbursing officer for the House of Representatives since July 1, 1995. Additionally,

House Rule II requires the Chief Administrative Officer to “fully cooperate with the appropriate offices and persons

in the performance of reviews and audits of financial records and administrative operations.” Accordingly, an audit

of the financial statements of the House, as prepared by the Chief Administrative Officer, is performed annually.   

FINANCIAL STATEMENT HIGHLIGHTS

Basis of Accounting and Presentation

The consolidated financial statements for fiscal years (FYs) 2012 and 2013 present the financial position, net cost

of operations, changes in net position and budgetary resources of the House.    These statements have been

prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) issued by the Federal

Accounting Standards Advisory Board (FASAB) and the applicable form and content requirements of the Office of

Management and Budget’s (OMB) Circular No. A‐136,  Financial Reporting Requirements.  

The House’s accounting structure, in accordance with GAAP, utilizes both accrual and budgetary accounting. Under

accrual accounting, events are recognized as they occur, as opposed to when cash is received or disbursed.

Therefore, revenues are recorded when earned and expenses are recorded when a liability is incurred, without

regard to receipt or payment of cash. The budgetary accounting, on the other hand, facilitates compliance with

legal constraints on, and controls over, the use of Federal funds.

Budgetary Resources

The House finances most of its operations through congressional appropriations of budget authority. To the extent

that revenue generated by some House entities does not cover expenses, appropriations are required. The House

receives annual, multi‐year and no‐year appropriations that may be used, within statutory limits, for operating and

capital expenditures. A financing source is recognized for these appropriated funds received, less appropriations

transferred or not available through rescission or cancellation. The House usually receives the full amount of its

appropriation at the beginning of each fiscal year. The House reported total budgetary resources for FY 2013 of

$1.4 billion, down 4 percent from FY 2012. The House’s budget was reduced by $62 million in FY 2013 due to

sequestration. The House reported $77 million of total unpaid obligated balances as of September 30, 2013.
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Dollars in Millions 2013 2012

%      

Change

Total Budgetary Resources 1,425 $     $     ‐ 1,479 4%

Obligations Incurred 1,284 $     $     ‐ 1,351 5%

Net Outlays $    1,268 $     ‐ 1,364 7%

Obligations Incurred decreased by $67 million in FY 2013. Net Outlays decreased by $96 million in FY 2013.

Balance Sheet

Condensed Balance Sheet Data

Dollars in Millions 2013 2012

%      

Change

Fund Balance with Treasury $    217 $    215 1%

Property and Equipment, Net         27          ‐ 41 34%

Other Assets           8           6 33%

Total Assets $    252 $     ‐ 262 4%

Accounts Payable         28          ‐ 34 18%

Actuarial Federal Employees' Compensation Act Liabilities 39                  26 50%

Other Liabilities         18          ‐ 19 5%

Total Liabilities $      85 $      79 8%

Unexpended Appropriations       159       148 7%

Cumulative Results of Operations           8          ‐ 35 77%

Total Net Position $    167 $     ‐ 183 9%

Total Liabilities and Net Position $    252 $     ‐ 262 4%

Total Assets – The House reported total assets of $252 million as of September 30, 2013, a 4 percent decrease

from prior year total assets of $262 million. The Fund Balance with Treasury (FBwT) of $217 million represents the

primary asset on the Balance Sheet of the House (86 percent of total assets).  FBwT decreased due to a reduction

in the House’s appropriation coupled with reduced spending.

Property and Equipment is the second largest asset, with a net balance of $27 million. The major items in this

category include computer software and hardware, equipment and work in process. The majority of the decrease

of approximately $14 million can be attributed to depreciation and amortization.

Other Assets include Cash, Accounts Receivable, Inventory and Operating Materials and Supplies, and Advances

and Prepayments. The 33% increase in Other Assets is primarily due to an increase in Prepayments.  

Total Liabilities – The House reported total liabilities of $85 million as of September 30, 2013, an 8 percent increase

from the prior year total of $79 million. The primary categories include Accounts Payable of $28 million (33 percent

of total liabilities) and Actuarial Federal Employees’ Compensation Act (FECA) Liabilities of $39 million (46 percent

of total liabilities). Actuarial FECA Liabilities significantly increased due to an increase in Workers’ Compensation

expenses.  

Other Liabilities include categories such Accrued Payroll and Benefits, Accrued Annual Leave, Capital Lease

Liabilities, Employer Contributions and Payroll Taxes Payable, and Other Post Employment Benefits Due and

Payable.   

Total Net Position – The Net Position as of September 30, 2013 was $167 million, a decrease of $16 million (9

percent) from the prior fiscal year. The balance was primarily comprised of Unexpended Appropriations of $159

million. The decrease in net position is due to a significant decrease in Cumulative Results of Operations.

Cumulative Results of Operations decreased as a result of the reduction in the book value of fixed assets and
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disposal of equipment, and an increase in the FECA Actuarial Liability. Net book value of property and equipment

decreased as a result of routine depreciation and amortization.  

Statement of Net Cost

Net Cost of Operations – The Net Cost of Operations for FY 2013 was $1.5 billion, a 6 percent decrease from FY

2012, primarily comprised of Legislative Activities.  

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position and results of operations of

the entity.   

While the statements have been prepared from the books and records of the House of Representatives in

accordance with GAAP for federal entities and in the formats prescribed by OMB, the statements are in addition to

the financial reports used to monitor and control budgetary resources that are prepared from the same books and

records.   

The statements should be read with the realization that they are for a component of the U.S. Government, a

sovereign entity.
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Management’s Discussion and Analysis (Unaudited)
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Management’s Discussion and Analysis (Unaudited)
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Independent Auditor’s Report
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Independent Auditor’s Report

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INDEPENDENT AUDITOR’S REPORT

To the Inspector General

U.S. House of Representatives

In our audits of the 2013 and 2012 financial statements of the U.S. House of Representatives (House), 

we found:

• The financial statements as of and for the fiscal years ended September 30, 2013 and 2012, are 

presented fairly, in all material respects, in accordance with U.S. generally accepted accounting 

principles;

• Three significant deficiencies in internal control (including safeguarding assets) over financial 

reporting as of September 30, 2013; and 

• No reportable noncompliance in fiscal year 2013 with provisions of applicable laws, regulations, 

and contracts we tested. 

The following sections discuss in more detail (1) our report on the House financial statements and on

required supplementary information and other information included with the financial statements; (2) 

our report on the House’s internal control over financial reporting; (3) our report on compliance with 

laws, regulations, and contracts; and (4) the House’s comments on a draft of this report. 

REPORT ON THE FINANCIAL STATEMENTS 

We have audited the accompanying consolidated balance sheets of the House as of September 30, 2013

and 2012, and the related consolidated statements of net cost, consolidated statements of changes in 

net position, and combined statements of budgetary resources for the years then ended, and the 

related notes to the financial statements. 

Management’s Responsibility

Management is responsible for the preparation and fair presentation of these financial statements in 

accordance with accounting principles generally accepted in the United States of America; this includes 

the design, implementation, and maintenance of internal control relevant to the preparation and fair 

presentation of financial statements that are free from material misstatement, whether due to fraud or 

error.

Auditor’s Responsibility 

Our responsibility is to express an opinion on these financial statements based on our audits. We 

conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; standards applicable to financial statement audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and as applicable, Office of 

Management and Budget (OMB) Bulletin No. 14-02, Audit Requirements for Federal Financial 

Statements. Those standards and OMB Bulletin No. 14-02 require that we plan and perform the audit to 

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obtain reasonable assurance about whether the financial statements are free from material 

misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in 

the financial statements. The procedures selected depend on the auditor's judgment, including the 

assessment of the risks of material misstatement of the financial statements, whether due to fraud or 

error. In making those risk assessments, the auditor considers internal control relevant to the entity's 

preparation and fair presentation of the financial statements in order to design audit procedures that 

are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also 

includes evaluating the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluating the overall presentation of 

the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 

our audit opinion.

Opinion on the Financial Statements 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

consolidated financial position of the House as of September 30, 2013 and 2012, and its consolidated 

net cost, consolidated changes in net position, and combined budgetary resources for the years then 

ended, in accordance with accounting principles generally accepted in the United States of America. 

Other Matters

Required Supplementary Information 

Accounting principles generally accepted in the United States of America, and as applicable, OMB 

Circular A-136, Financial Reporting Requirements, require that the Management’s Discussion and 

Analysis and Other Required Supplementary Information be presented to supplement the basic financial 

statements. Such information, although not a part of the basic financial statements, is required by the 

Federal Accounting Standards Advisory Board and OMB, who consider it to be an essential part of 

financial reporting for placing the basic financial statements in an appropriate operational, economic, 

and historical context. We have applied certain limited procedures to the required supplementary 

information in accordance with auditing standards generally accepted in the United States of America. 

These procedures consisted of inquiries of management about the methods of preparing the 

information and comparing the information for consistency with management's responses to our 

inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic 

financial statements. We do not express an opinion or provide any assurance on the information 

because the limited procedures do not provide us with sufficient evidence to express an opinion or 

provide any assurance.

Other Information 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements as a 

whole. The Schedule of Spending for the fiscal year ended September 30, 2013, is presented for 

purposes of additional analysis and is not a required part of the basic financial statements. This 

information has not been subjected to auditing procedures and, accordingly, we do not express an

opinion or provide any assurance on it.

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OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS

Internal Control Over Financial Reporting and Compliance

In planning and performing our audit of the financial statements, we considered the House's internal 

control over financial reporting and compliance (internal control) to determine the audit procedures 

that are appropriate in the circumstances for the purpose of expressing our opinion on the financial 

statements, but not for the purpose of expressing an opinion on the effectiveness of the House’s 

internal control. Accordingly, we do not express an opinion on the effectiveness of the House’s internal 

control.

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, or

detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a 

combination of deficiencies, in internal control, such that there is a reasonable possibility that a material 

misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a 

timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control 

that is less severe than a material weakness, yet important enough to merit attention by those charged 

with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of this 

section and was not designed to identify all deficiencies in internal control that might be material 

weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any 

deficiencies in internal control that we consider to be material weaknesses. However, material 

weaknesses may exist that have not been identified. 

Significant Deficiencies

We identified the following deficiencies in the House’s internal control that we consider to be significant 

deficiencies.

1. Ineffective Control Over Property and Equipment

2. Ineffective Control Over the Financial Reporting Process

3. Ineffective Control Over Information Technology

These deficiencies in internal control are described in more detail in Appendix A.

Limitations of Internal Control

Because of inherent limitations in internal control, misstatements due to error or fraud, losses, or 

noncompliance may nevertheless occur and not be detected. We also caution that projecting our 

evaluation to future periods is subject to the risk that controls may become inadequate because of 

changes in conditions, or that the degree of compliance with controls may deteriorate.

COMPLIANCE

As part of obtaining reasonable assurance about whether the House’s financial statements are free from 

material misstatement, we performed tests of its compliance with certain provisions of laws, 

regulations, and contracts, noncompliance with which could have a direct and material effect on the 

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determination of financial statement amounts. Providing an opinion on compliance with those 

provisions was not an objective of our audit, and accordingly, we do not express such an opinion. 

We did not test compliance with all laws and regulations applicable to the House. We limited our tests 

of compliance to those provisions of laws and regulations OMB audit guidance requires that we test that 

we deemed applicable to the financial statements for the fiscal year ended September 30, 2013. We 

caution that noncompliance may have occurred and may not have been detected by these tests, and 

that such testing may not be sufficient for other purposes. The results of our tests disclosed no instances 

of noncompliance or other matters that are required to be reported under Government Auditing 

Standards or OMB audit guidance.

HOUSE’S RESPONSE TO FINDINGS

The House’s response to the findings identified in our audit is included in Appendix B. The House

concurred with the findings in our report. The House’s response was not subjected to the auditing 

procedures applied in the audit of the financial statements and, accordingly, we express no opinion on 

it.

PURPOSE OF THE OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS

The purpose of this communication regarding Other Reporting Required by Government Auditing 

Standards is solely to describe the scope of our testing of internal control and compliance and the 

results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control 

over financial reporting or on compliance. This communication is an integral part of an audit performed 

in accordance with Government Auditing Standards in considering the entity’s internal control and 

compliance. Accordingly, this communication is not suitable for any other purpose.

COTTON & COMPANY LLP 

Matthew H. Johnson, CPA

Partner 

Alexandria, VA 

April 4, 2014

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APPENDIX A

SIGNIFICANT DEFICIENCIES NOTED DURING THE

FY 2013 FINANCIAL STATEMENT AUDIT

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APPENDIX A

SIGNIFICANT DEFICIENCIES NOTED DURING THE

FY 2013 FINANCIAL STATEMENT AUDIT

During our audit of the U.S. House of Representatives (House)’s FY 2013 financial statements, we 

identified three significant deficiencies in internal control over financial reporting, described in this 

appendix. We do not consider these deficiencies to be material weaknesses. 

Finding 1: Ineffective Control Over Property and Equipment

Summary Status: Significant Deficiency

New

During FY 2013, we found deficiencies in the House’s internal control over the accuracy and 

completeness of property and equipment (property) records. Specifically, we identified the following 

property areas in which controls are not effective and improvements are needed:

1. Inventory processes are not properly designed and are not operating effectively.

2. Disposals are not always recorded timely and are not properly supported.

 

The areas identified above collectively represent a significant deficiency. We discuss each of these areas 

below and provide our recommendations for improvement.

1. Inventory processes are not properly designed and are not operating effectively. 

Our FY 2013 testing identified deficiencies in the House’s inventory processes. Specifically, we noted 

that inventories are not always performed or completed in a timely manner, and that the House has not 

established policies and procedures for inventorying and disposing of software. 

We performed existence testing on a sample of capital property recorded in the House’s core financial 

management system, PeopleSoft. While we were able to verify the existence of all sampled property 

that had a net book value, we were unable to verify the existence of over 60 percent of the fully 

depreciated assets sampled. During the audit, we also noted: 

• Of our sample of 50 capital and accountable assets observed in our completeness testing, one 

asset was in use but was recorded as disposed in PeopleSoft. 

• House Information Resources (HIR), which is responsible for recording and tracking over half of 

the House’s property items, has not completed full physical inventories of its capital property

since 2008. 

• Non-HIR inventories are not always completed timely. We reviewed a sample of twelve

inventories and noted that it took over 150 days to complete two of the inventories.

Because of these deficiencies, the House did not timely identify over 1,700 fully depreciated property 

items (with a total acquisition cost of nearly $44.7 million) that were recorded in PeopleSoft but had 

been disposed prior to FY 2012. The error was identified and corrected during FY 2013, and while the 

balance sheet was not affected because the assets were fully depreciated, the error required the House 

to restate Note 5 – General Property and Equipment, Net. 

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CAO-HIR policy number 003-08, HIR Asset Management and Inventory Control, states:

To maintain the integrity of HIR inventory systems, a complete physical inventory of equipment 

by serial number and/or barcode shall be conducted annually for accountable items...a complete 

inventory for each employee and custodial area shall be printed and distributed annually during 

the month of February.

The House’s Guide To Outfitting and Maintaining an Office of the U.S. House of Representatives 

states:

Inventory Procedures: HSS shall maintain an inventory of all office equipment and district office 

furnishing items having an original purchase price of $500 or more assigned to each office, 

except as noted below.

HSS shall perform a physical inventory of all office equipment items assigned to each 

Washington, DC office:

1. Whenever a Member or Committee office relocates; or

2. Whenever there is a change in the office holder (Member or Chair); or

3. At least once every six years

Federal Accounting Standards Advisory Board (FASAB) Statements on Federal Financial Accounting 

Standards (SFFAS) 6, Accounting for Property, Plant, and Equipment, states, “In the period of disposal, 

retirement, or removal from service, general PP&E [property] shall be removed from the asset accounts 

along with associated accumulated depreciation/amortization.” 

The U.S. Government Accountability Office (GAO)’s Standards for Internal Control in the Federal 

Government states:

A subset of these objectives is the safeguarding of assets. Internal control should be designed to 

provide reasonable assurance regarding prevention of or prompt detection of unauthorized 

acquisition, use, or disposition of an agency’s assets.

We recommend that the Office of the Chief Administrative Officer (CAO) improve the design and 

effectiveness of internal control over property to ensure that property records are complete and 

accurate and that inventories are performed regularly, completely, and timely.

2. Disposals are not always recorded timely and are not properly supported.

The House does not have effective controls in place to ensure that disposals are recorded in PeopleSoft

in a timely manner, and that documentation supporting transfers to the General Services Administration 

(GSA) is accurate. We tested a sample of five disposals and found that one asset disposition was not 

recorded in PeopleSoft in a timely manner. Additionally, we tested a sample of six GSA transfer 

documents and found that two assets listed on GSA transfer documentation were later returned to the 

House inventory. As a result of these control weaknesses, the House’s property records may not be 

complete and accurate, thus increasing the risk of misstatements in the House’s financial statements.

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GAO’s Standards for Internal Control in the Federal Government states:

Transactions should be promptly recorded to maintain their relevance and value to management 

in controlling operations and making decisions. This applies to the entire process or life cycle of a 

transaction or event from the initiation and authorization through its final classification in 

summary records. In addition, control activities help to ensure that all transactions are 

completely and accurately recorded.

Internal control and all transactions and other significant events need to be clearly documented, 

and the documentation should be readily available for examination. The documentation should 

appear in management directives, administrative policies, or operating manuals and may be in 

paper or electronic form. All documentation and records should be properly managed and 

maintained.

We recommend that the CAO improve controls over disposals by:

• Reviewing and updating existing standard operating procedures to ensure property disposals 

are processed in PeopleSoft timely, completely, and accurately.

• Ensuring that all employees responsible for disposing of property receive training on the CAO’s 

standard operating procedures.

Finding 2: Ineffective Control Over the Financial Reporting Process

Summary Status: Significant Deficiency

Prior-Year Condition

Open

Since FY 2009, we have reported that the House does not have effective controls over financial 

reporting. During FY 2013, the House made additional progress in addressing previously identified 

errors; however, controls around budgetary accounting and reporting, as well as around the accuracy of 

the notes to the financial statements, need improvement. We identified the following areas within 

financial reporting in which controls are not effective and improvements are needed:

1. Undelivered order processing errors are not detected and corrected timely.

2. Budgetary activity is not always properly classified and reported.

3. Notes to the financial statements are not always accurate.

These weaknesses collectively represent a significant deficiency. We discuss each of these areas below 

and provide our recommendations for improvement.

1. Undelivered order processing errors are not detected and corrected timely. 

PeopleSoft is not properly processing purchase order (PO) activity, and as a result, erroneous activity is 

being posted to the general ledger. During FY 2013, the House dedicated resources to identifying the 

root cause of this activity and developing processes to detect and correct this activity. While the House 

has not been able to identify all root causes of the erroneous activity, it was able to develop system 

assurance reports to identify potentially erroneous PO activity in the general ledger. However, these 

reports were not fully implemented by September 30, 2013. 

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As a result of continuing clean-up efforts and ongoing erroneous PO activity in the general ledger, the 

House delayed delivering the population of available obligation balances. In addition, the House was 

required to make adjustments totaling $21.5 million to ensure that unpaid undelivered order balances 

were fairly stated. 

GAO’s Standards for Internal Control in the Federal Government: Accurate and Timely Recording of 

Transactions and Events states:

Transactions should be promptly recorded to maintain their relevance and value to management 

in controlling operations and making decisions. This applies to the entire process or life cycle of a 

transaction or event from the initiation and authorization through its final classification in 

summary records. In addition, control activities help to ensure that all transactions are 

completely and accurately recorded.

We recommend that the CAO:

• Identify the root cause of known undelivered order processing errors and make the necessary 

modifications to PeopleSoft. 

• Implement a control process to detect and correct erroneous PO activity in the subledger and 

general ledger as part of the month-end closing process.

2. Budgetary activity is not always properly classified and reported.

The House does not have effective internal controls in place to ensure that budgetary activity is 

recorded in the proper general ledger accounts and that budgetary amounts are properly reported.

During our audit, we found:

• Rescissions totaling $64.8 million were not properly reported. In the House’s interim financial 

statements as of June 30, 2013, rescissions were reported in the “Spending authority from 

offsetting collections” line of the statement of budgetary resources (SBR). Since rescissions are a 

reduction of current-year appropriation authority, however, this amount should have been 

reported in the “Appropriations” line.

• Recoveries of prior-year obligations were overstated by $7.6 million. Recoveries of prior-year 

obligations typically represent deobligated amounts, or downward corrections of prior-year 

obligations. The House used the downward adjustment general ledger account in two adjusting 

entries; however, since the total obligated amount did not change, the use of the downward 

adjustment general ledger account was not appropriate. 

• Unobligated balances totaling $1.0 million were not properly classified. Though the House 

implemented a process to ensure that unobligated balances were properly classified in the 

general ledger during FY 2013, the process did not detect all misclassified unobligated balances. 

Unobligated balances of House appropriations that expired on December 31, 2012, were 

improperly classified as available for obligation, rather than as unavailable for obligation. 

Upon notification and discussion with the auditors, the House made the necessary corrections for the 

above-noted errors in the final FY 2013 financial statements. 

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The Office of Accounting’s Financial Statement Preparation Procedures – Preparing the Combining 

Statement of Budgetary Resources states that the House will follow the OMB and U.S. Treasury’s 

prescribed formats and guidance when preparing the SBR.

GAO’s Standards for Internal Control in the Federal Government states:

Transactions should be promptly recorded to maintain their relevance and value to management 

in controlling operations and making decisions. This applies to the entire process or life cycle of a 

transaction or event from the initiation and authorization through its final classification in 

summary records. In addition, control activities help to ensure that all transactions are 

completely and accurately recorded.

We recommend that the CAO:

• Develop and implement processes and procedures to ensure that budgetary activity is properly 

recorded in the general ledger and presented in the SBR.

• Continue to perform quarterly reviews of budgetary balances to ensure that unobligated 

balances are properly classified.

3. Notes to the financial statements are not always accurate.

The House does not have effective controls in place to ensure that the notes to the financial statements

are accurate. We found that amounts were not properly classified in two notes, Note 11 –

Intragovernmental Costs and Exchange Review and Note 19 – Reconciliation of Budgetary Resources 

Obligated to Net Cost of Operations. Specifically:

• The House did not accurately report costs in Note 11 – Intragovernmental Costs and Exchange 

Revenue. Note 11 presents the House’s costs and revenues as exchanges either with other 

federal entities (intragovernmental) or with non-federal entities (the public). A total of $235.9 

million in imputed expenses and certain intragovernmental accrued operating expenses were 

inaccurately classified as public costs, rather than as intragovernmental costs.

• The House did not accurately report all asset purchases in Note 19 – Reconciliation of Budgetary 

Resources Obligated to Net Cost of Operations, which provides an explanation of the differences 

between budgetary and proprietary accounting. Asset purchases totaling $3.5 million were 

inaccurately reported as other components not requiring or generating resources, rather than as 

resources that finance the acquisition of assets.

Upon notification and discussion with the auditors, the House made the necessary corrections to the 

accompanying footnotes. To ensure that Note 11 – Intragovernmental Costs and Exchange Revenue is 

comparable, the House also reclassified FY 2012 expenses totaling $235.0 million from public costs to 

intragovernmental.

GAO’s Standards for Internal Control in the Federal Government states:

Internal control should provide reasonable assurance that the objectives of the agency are being 

achieved in the following categories:

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29

• Effectiveness and efficiency of operations including the use of the entity’s resources.

• Reliability of financial reporting, including reports on budget execution, financial statements, 

and other reports for internal and external use.

• Compliance with applicable laws and regulations.

We recommend that the CAO consider improving quality control procedures that ensure amounts 

reported in the notes to the financial statements are properly presented and accurately reported. 

Finding 3: Ineffective Controls Over Information Technology

Summary Status: Significant Deficiency

Prior-Year Condition

Open

During FY 2013, the House continued to make improvements in its controls over information 

technology. It successfully remediated prior-year issues concerning separation of duties and account

management controls; however, full implementation of a risk management framework, including 

maintenance of system security plans, performance of security control assessments, and tracking of 

information security weaknesses, is still in progress. We first identified and reported these issues in FY 

2009. In addition, there are still other areas for improvement in strengthening controls surrounding the 

completeness, accuracy, and reliability of financial data. 

We noted the following eight conditions related to internal controls over information systems, which 

collectively represent a significant deficiency in the control environment. We discuss each of these areas 

below and provide our recommendations for improvement.

1. The House has not fully implemented procedures to ensure that all major systems within its IT 

environment have undergone a risk management process.

The House did not complete risk management framework activities in accordance with National Institute 

of Standards and Technology (NIST) guidance for PeopleSoft, Human Resource Information Systems 

(HRIS), the House Network, and Active Directory. The United States House of Representatives 

Information Security Policy for the Information Security Compliance Program requires that all major 

systems, support systems, and applications undergo a certification and accreditation (C&A) process 

before implementation, and at least every two years thereafter. 

The CAO has developed the following risk management framework policies and procedures:

• House Information Security Policy (HISPOL) 007.0, The United States House of Representatives 

Risk Management Framework Policy

• House Information Security Publication (HISPUB) 007.2, The United States House of 

Representatives Information Security Publication – Risk Management Framework for CAO 

Information Systems

However, both items were still in draft and had not been finalized as of the end of FY 2013. 

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Without completing C&A activities or finalizing risk management framework policies and procedures, 

management cannot obtain adequate assurance that the general IT environment and all information 

systems are operating with an acceptable amount of risk. 

NIST Special Publication (SP) 800-37, Revision 1, Guide for Applying the Risk Management Framework to

Federal Information Systems: A Security Life Cycle Approach, requires that organizational officials, in 

collaboration with the senior information security officer, assess the information provided by the system 

owner or common control provider regarding the current security state of the system and make 

recommendations for addressing any residual risks. Risk assessments are employed at the discretion of 

the organization to provide needed information on threats, vulnerabilities, and potential impacts, as 

well as the analyses for risk mitigation recommendations.

We recommend that the CAO: 

• Implement and enforce a risk management framework, including finalized, approved risk 

management framework policies and procedures, to ensure that all systems are identified.

• Undergo a security assessment process, to include risk assessments, in accordance with House 

policy and industry best practices for federal information systems, to ensure that management’s 

authorizing officials are provided with adequate information to make system authorization 

decisions.

2. The House has not fully developed and maintained system security plans for major financial 

systems.

We found that the House has not fully developed and maintained system security plans (SSPs) for major 

financial systems in accordance with House policy and industry best practices. Specifically, the House 

had inadequate SSPs for the House network, Active Directory, and HRIS. These SSPs did not document all 

minimum security controls based on system criticality and data. The CAO contracted with an outside 

vendor to conduct certification and accreditation (C&A), which includes updating the SSPs; however, the 

C&A packages were not completed as of the end of FY 2013.

CAO management has not adequately developed policies and procedures that provide guidance 

regarding the implementation of a risk management framework as outlined by NIST SP 800-37, Revision 

1, including minimum security control selection, scoping, and tailoring. This increases the risk that 

potential threats and vulnerabilities will go unmitigated due to a lack of security controls commensurate 

with the risk of the system security categorization.

In accordance with NIST SP 800-18, Revision 1, Guide for Developing Security Plans for Federal 

Information Systems, agencies must meet the minimum security requirements of Federal Information 

Processing Standard (FIPS) 200. These requirements represent a broad-based, balanced information 

security program that addresses the management, operational, and technical aspects of protecting the 

confidentiality, integrity, and availability of federal information and information systems. Agencies meet 

the minimum security requirements in FIPS 200 by applying security controls selected in accordance 

with NIST SP 800-53, Revision 3, Recommended Security Controls for Federal Information Systems and 

Organizations, and with the designated impact levels of the information systems.

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We recommend that the CAO document and implement policies and procedures that provide guidance 

regarding the implementation of a risk management framework as outlined by NIST SP 800-37, Revision 

1, including system security categorization, minimum security control selection, scoping, and tailoring.

3. The House did not conduct security control assessments of all required controls.

The House did not conduct security control assessments to test the design and operating effectiveness 

of all required controls for the House network and financial systems. Specifically, in FY 2013 the House 

did not complete security control assessments for the House Network, Active Directory, PeopleSoft, and 

HRIS. The CAO contracted with an outside vendor to conduct the C&A of each system, including security 

control assessments; however, these C&As were not completed as of the end of FY 2013.

CAO management has not adequately developed policies and procedures that provide guidance 

regarding the implementation of a risk management framework, including establishing minimum 

security controls in accordance with FIPS 200 and NIST SP 800-53, Revision 3, as well as performing 

security control assessments commensurate with the risk and criticality of the system. This increases the

risk that CAO management does not have a complete understanding of the risk to systems and to the IT 

environment.

NIST SP 800-37, Revision 1, Guide for Applying the Risk Management Framework to Federal Information 

Systems: A Security Life Cycle Approach, requires that organizations assess security controls in 

accordance with the assessment procedures defined in the security assessment plan. Security control 

assessments determine the extent to which the controls are implemented correctly, operating as 

intended, and producing the desired outcome with respect to meeting the security requirements for the 

information system.

We recommend that the CAO:

• Conduct and document security control assessments for the House network, Active Directory,

and financial systems to test the design and operating effectiveness of all required controls. 

• Ensure that the documentation for each control tested includes the description of the 

implemented control, the test steps to be conducted, the expected test results, and the actual 

test results. 

• Obtain and document evidence from testing to allow CAO management to make objective 

determinations about the effectiveness of security controls and the security of the information 

system.

4. The House has not developed or implemented a process for identifying, tracking, and remediating 

all known security weaknesses and incidents.

The House has not developed or implemented a process for identifying and tracking all known security 

weaknesses and incidents across the agency, or for ensuring that appropriate corrective action is taken.

While the agency has developed publications such as HISPUB 007.2, Information Systems Security 

Certification Process for Applications, and HISPUB 004.1, Computer Incident Response Team Handbook, 

to generally guide the plan of action and milestones (POA&M) and computer incident response team 

(CIRT) processes, respectively, they are not in accordance with industry best practices, and the House 

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has not developed detailed procedures guiding either process. The House also has not fully developed or 

maintained a POA&M for all financial systems and applications.

In addition, CAO management has not documented a process to ensure that all IT security weaknesses 

and security incidents are tracked and managed from an entity-wide perspective. Without such a 

process in place, CAO management cannot ensure that it takes appropriate and timely corrective action 

to address all known issues and weaknesses. This increases the risk that a significant security weakness 

will remain vulnerable for an extended period of time. 

HISPOL 007.0 requires that vulnerabilities identified during the review process of an application or 

device be documented and tracked throughout the remediation process. Identified vulnerabilities are 

prioritized based on the risk each poses. Once a vulnerability is identified, a corrective action should be 

formulated and a timeframe established for its implementation. 

Additionally, in accordance with NIST SP 800-53, Revision 3, Recommended Security Controls for Federal 

Information Systems and Organizations, organizations should track and document information system 

security incidents. Documenting information system security incidents includes, for example, 

maintaining records about each incident, the status of the incident, and other pertinent information

necessary for forensics, evaluation of incident details, trends, and handling.

We recommend that the CAO develop, document, and implement a process to identify and track all 

security weaknesses and incidents identified throughout the IT environment, and to ensure that 

appropriate corrective action is taken.

• The incident response process should ensure that the House maintains documentation for all 

identified security incidents, and that appropriate follow-up investigations are performed. 

• The POA&M process should ensure that the House develops and maintains POA&Ms or 

equivalent documentation for all House systems and applications, in accordance with industry 

best practices. CAO management should also ensure that a process is in place for testing 

security controls identified as corrected, to ensure that actions taken adequately mitigate or 

correct identified weaknesses.

5. The House has not adequately developed and implemented contingency planning and recovery 

policies and procedures.

The House has not adequately developed and implemented contingency planning and recovery policies 

and procedures to ensure a comprehensive approach that includes the House network and Active 

Directory. Specifically, in FY 2013 we noted that the House had not adequately developed contingency 

plans to coordinate recovery activities for the House network and Active Directory. Recovery Procedure 

Annexes (RPAs) for data network systems and Active Directory were still in progress at the time of our 

testing. The issues noted regarding incomplete contingency plan development were due to the 

continued implementation of the Business Continuity/Disaster Recovery (BC/DR) framework. We did 

note that the House completed RPAs for PeopleSoft and HRIS, as well as functional failover exercises for 

both systems. CAO management indicated that remaining corrective actions were not scheduled for full 

completion until FY 2014. Incomplete contingency planning and recovery policies and procedures 

increase the risk that House financial operations, data, or systems may become unavailable for an 

extended period of time during which sufficient alternate operating procedures are not in place to carry 

out core requirements.

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In accordance with NIST SP 800-34, Revision 1, Contingency Planning Guide for Federal Information 

Systems, information system contingency planning represents a broad scope of activities designed to 

sustain and recover critical system services following an emergency event. An information system 

contingency plan (ISCP) provides established procedures for the assessment and recovery of a system 

following a system disruption. The ISCP provides key information needed for system recovery, including 

roles and responsibilities, inventory information, assessment procedures, detailed recovery procedures, 

and instructions for testing a system.

NIST SP 800-53, Revision 3, Recommended Security Controls for Federal Information Systems and 

Organizations, Control CP-2, Contingency Plan, requires the development of a contingency plan for all 

information systems.

We recommend that the CAO coordinate contingency planning and recovery policies and procedures to 

ensure a comprehensive approach that includes the House network, Active Directory, and all critical

financial systems.

6. The House has not adequately designed and implemented audit logging and monitoring controls 

for financial applications.

We noted that PeopleSoft had inadequate monitoring of sensitive application transactions/table edits 

and inappropriate separation of duties for security personnel reviewing system/application logs. We 

also noted inadequate logging and monitoring of FinMart infrastructure components. Specifically, we 

noted the following issues:

• At an application level, the only auditable events that management actively monitors for the 

PeopleSoft program are failed logon attempts and security role changes. While management 

has established key fields and tables for trigger-based auditing, it does not actively monitor and 

review these logs.

• The UNIX administrators supporting PeopleSoft, all of whom have SUDO access to root on the 

production application, web, and database Solaris servers, are responsible for both the 

administration of the operating system and the monitoring of operating system security logs. 

This represents a separation-of-duties conflict, as the administrators are potentially reviewing 

their own actions. We noted that CAO management was testing a solution for capturing and 

monitoring UNIX substitute user (SU) commands in FY 2013. The UNIX SU command makes it 

possible to change a login session’s owner without the owner logging out of that session first. 

SU commands can be used to change the ownership from that of an ordinary user to that of an 

administrative user, thereby providing elevated access to the system. However, the solution 

that CAO management was testing was not in place by the end of the fiscal year.

• CAO management does not log and monitor the modification or deletion of content in SQL 

Server Agent jobs on the FinMart production SQL server. SQL Server Agent jobs manage the 

daily data transfer with PeopleSoft, as well as the system assurance job that ensures data 

integrity. CAO management indicated that corrective actions for this issue were not planned for 

completion until FY 2014.

CAO management has not developed policies and procedures documenting all aspects of audit logging 

and monitoring for financial applications. This increases the risk that suspicious activity affecting key 

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financial data, whether intentional or unintentional, will not be detected in a timely manner, and that a 

single individual could engage in malicious activity that could remain undetected.

In accordance with NIST SP 800-53, Revision 3, Recommended Security Controls for Federal Information 

Systems and Organizations, organizations should determine, based on a risk assessment and 

mission/business needs, that the information system must be capable of auditing organizationallydefined auditable events. The organization should review and analyze information system audit records 

for indications of inappropriate or unusual activity, and report findings to designated organizational 

officials. Additionally, NIST SP 800-53, Revision 3 states that organizations should separate duties of 

individuals as necessary, to prevent malevolent activity without collusion. For example, security 

personnel who administer access control functions should not administer audit functions.

We recommend that the CAO develop and implement audit logging and monitoring policies and 

procedures for PeopleSoft and FinMart to ensure that audit logs for sensitive financial records and 

tables, as well as for key security activities, are actively monitored, and that all reviews and any followup actions taken are documented.

7. The House has not adequately configured and monitored security configuration baselines.

The House did not update security configuration baselines in FY 2013 to correct deficiencies noted in 

prior years, including issues with the Microsoft Windows Server 2008 and Oracle for UNIX configuration 

checklists. Specifically, CAO baselines deviate significantly from industry best practices, such as Center 

for Internet Security (CIS) configuration benchmarks. HISPOL 007.0, which documents the process for 

baseline compliance reviews, has not been updated, and the process still indicates that compliance 

reviews are only required once every three years. We also reviewed a selection of Active Directory and 

Oracle 11g configuration settings and noted that they had not been configured with industry best 

practices.

CAO management has not implemented a process to ensure that security configuration baselines are 

configured and monitored in accordance with industry best practices. As a result, settings deployed to 

House operating systems and database management systems may not provide adequate security and 

protection. This increases the risk that the integrity, confidentiality, and availability of House data could 

be compromised.

In accordance with NIST SP 800-53, Revision 3, Recommended Security Controls for Federal Information 

Systems and Organizations, organizations should establish configuration settings for information 

technology products employed within the information system that reflect the most restrictive mode 

consistent with operational requirements, and monitor changes to the configuration settings in 

accordance with organizational policies and procedures.

We recommend that the CAO implement a process to ensure that security configuration baselines are 

appropriately configured and monitored for all platforms, in accordance with industry best practices.

8. The House does not actively monitor and review access to PeopleSoft shared group accounts.

The House does not adequately monitor and review shared group accounts, including privileged 

administrator accounts. We noted three group accounts, two with administrative access and one used 

by the accounting department for accounts payable processing, that did not have proper oversight and 

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accountability. While we noted that CAO management implemented a process in FY 2012 to periodically 

monitor the IP addresses used to access these accounts, the design of the process does not include 

reviewing or providing accountability for actions performed with the shared accounts. In FY 2013, CAO 

management indicated that it had an initiative in place to gather requirements across multiple 

enterprise resource planning systems managed by Enterprise Applications in order to identify a solution 

for monitoring shared and system accounts. Corrective actions are not planned for completion until FY 

2014.

These issues are a result of CAO management not having adequately established policies and 

procedures guiding the usage and monitoring of shared group accounts, including privileged 

administrator accounts, for PeopleSoft. This increases the risk that inappropriate actions may be 

performed with a privileged account within the financial system and go undetected; even if 

inappropriate actions are detected, accountability for those actions cannot be determined.

In accordance with NIST SP 800-53, Revision 3, Recommended Security Controls for Federal Information 

Systems and Organizations, the information system should uniquely identify and authenticate 

organizational users or processes acting on behalf of organizational users. Unique identification of 

individuals in group accounts (e.g., shared privilege accounts) may need to be considered for detailed 

accountability of activity.

We recommend that the CAO uniquely identify and authenticate users to the highest degree possible by 

establishing and implementing policies and procedures concerning audit logging and monitoring, 

including privileged administrator accounts.

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Chief Administrative Officer’s

Audit Report Response
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Chief Administrative Officer’s Audit Report Response

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Chief Administrative Officer’s Audit Report Response
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Fiscal Year 2013 Financial Statements
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Financial Statements

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Financial Statements Included in This Report

The U.S. House of Representatives (House) has prepared financial statements for fiscal year (FY) 2013 in

accordance with U.S. Generally Accepted Accounting Principles (GAAP) issued by the Federal Accounting Standards

Advisory Board (FASAB) and the applicable form and content requirements of the Office of Management and

Budget’s (OMB) Circular No. A‐136, Financial Reporting Requirements. The responsibility for the integrity of the

financial information included in these statements rests with management of the House.  The audit of the House’s

financial statements was performed by Cotton & Company LLP.   The auditor’s report accompanies the financial

statements.

The House’s financial statements for FY 2013 consisted of the following:

• The Balance Sheet, which presents as of September 30, 2013 and 2012 those resources owned or managed by

the House that are available to provide future economic benefits (assets); amounts owed by the House that will

require payments from those resources or future resources (liabilities); and residual amounts retained by the

House comprising the difference (net position).

• The Statement of Net Cost, which presents the net cost of the House’s operations for the years ended

September 30, 2013 and 2012. The House’s net cost of operations includes the gross costs incurred by the House

less any exchange revenue earned from House activities.  

• The Statement of Changes in Net Position, which presents the change in the House’s net position resulting from

the net cost of the House’s operations, budgetary financing sources other than exchange revenues, and other

financing sources for the years ended September 30, 2013 and 2012.

• The Statement of Budgetary Resources, which presents the budgetary resources available to the House during

FY 2013 and FY 2012, the status of these resources at September 30, 2013 and 2012, the change in obligated

balance during FY 2013 and 2012, and net outlays of budgetary resources for the years ended September 30, 2013

and 2012.
Financial Statements

44

U.S. HOUSE OF REPRESENTATIVES

Consolidated Balance Sheets

As of September 30, 2013 and 2012

2013 2012

ASSETS

 Intergovernmental:

Fund Balance with U.S. Treasury (Note 2) $ 217,273,660 $ 215,313,390 

Accounts Receivable, Net (Note 3) 63,034 66,867 

Advances and Prepayments (Note 7) 10,733 10,756 

Total Intragovernmental 217,347,427 215,391,013 

Cash and Other Monetary Assets (Note 2) 3,782 2,948 

Accounts Receivable, Net (Note 3) 493,500 447,332 

Inventory and Operating Materials and Supplies (Note 4) 1,323,008 1,366,626 

Property and Equipment, Net (Note 5) 26,796,857 40,462,006 

Advances and Prepayments (Note 7) 5,839,165 4,170,614 

Total Assets $ 251,803,739 $ 261,840,539 

 

Stewardship Property and Equipment (Note 6)

 

LIABILITIES

 Intragovernmental:

Accounts Payable $ 4,476,022 $ 5,580,540 

Advances from Others 197,209 113,286 

Capital Lease Liabilities (Note 9) 72,862 352,875 

Other Liabilities 2,165,654 3,989,542 

Total Intragovernmental 6,911,747 10,036,243 

Accounts Payable 23,997,401 28,888,518 

Actuarial Federal Employees’ Compensation Act Liabilities 38,506,935 25,969,234 

Accrued Payroll and Benefits 6,989,142 6,664,806 

Accrued Annual Leave 7,919,488 7,391,503 

Other Liabilities 261,983 159,493 

Total Liabilities (Note 8) $ 84,586,696 $ 79,109,797

NET POSITION

Unexpended Appropriations $ 159,014,711 $ 148,024,167 

Cumulative Results of Operations 8,202,332 34,706,575 

Total Net Position $ 167,217,043 $ 182,730,742

Total Liabilities and Net Position $ 251,803,739 $ 261,840,539
Financial Statements

45

U.S. HOUSE OF REPRESENTATIVES

Consolidated Statements of Net Cost

For the Years Ended September 30, 2013 and 2012

2013 2012

NET COST OF OPERATIONS (Note 11)

Net Costs by Program Area

Legislative Activities

Gross Costs $ 1,520,266,570 $ 1,617,106,848 

Less: Earned Revenue (3,557,267) (4,122,231)

Net Program Costs 1,516,709,303 1,612,984,617 

Revolving Funds

Gross Costs 5,582,938 1,538,943 

Less: Earned Revenue (5,266,751) (5,430,138)

Net Program Costs 316,187 (3,891,195)

Net Cost of Operations $ 1,517,025,490 $ 1,609,093,422 
Financial Statements

46

U.S. HOUSE OF REPRESENTATIVES

Consolidated Statements of Changes in Net Position

For the Years Ended September 30, 2013 and 2012

2013 2012

Cumulative Results of Operations

Beginning Balance $ 34,706,575 $ 48,549,755 

Budgetary Financing Sources

Appropriations Used 1,259,270,279 1,370,491,022 

Nonexchange Revenue 36,450 26,600 

Donations 150 43,051 

Other Adjustments 159,789 (4,382,615)

Other Financing Sources

Imputed Financing from Costs Absorbed

 by Others (Note 15) 231,388,782 229,446,950

Other Adjustments (334,203) (374,766)

Total Financing Sources 1,490,521,247 1,595,250,242 

Net Cost of Operations (1,517,025,490) (1,609,093,422)

Net Change (26,504,243) (13,843,180)

Total Cumulative Results of Operations $ 8,202,332 $ 34,706,575 

Unexpended Appropriations

Beginning Balance $ 148,024,167 $ 201,799,706 

Budgetary Financing Sources

Appropriations Received 1,340,438,000 1,346,438,000 

Appropriations Transferred-In/Out (3,037,202) (8,975,000)

Other Adjustments (67,139,975) (20,747,517)

Appropriations Used (1,259,270,279) (1,370,491,022)

Total Budgetary Financing Sources 10,990,544 (53,775,539)

Total Unexpended Appropriations $ 159,014,711 $ 148,024,167 

Net Position $ 167,217,043 $ 182,730,742 
47

 Financial Statements

U.S. HOUSE OF REPRESENTATIVES

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2013 and 2012

2013 2012

Budgetary Resources:

Unobligated balance brought forward, Oct 1 $ 127,694,618 $ 135,565,747 

Adjustment to unobligated balance brought forward, Oct 1 - - 

 Unobligated balance brought forward, Oct 1, as adjusted 127,694,618 135,565,747 

Recoveries of prior year unpaid obligations 2,386,466 2,100,201 

Other changes in unobligated balance (5,205,855) (32,211,858)

Unobligated balance from prior year budget authority, net 124,875,229 105,454,090 

Appropriations (discretionary and mandatory) 1,275,626,467 1,346,438,000 

Borrowing authority (discretionary and mandatory) - - 

Contract authority (discretionary and mandatory) - - 

Spending authority from offsetting collections (discretionary and mandatory) 24,658,251 26,765,928 

Total budgetary resources $ 1,425,159,947 $ 1,478,658,018 

Status of Budgetary Resources:

Obligations incurred $ 1,284,277,661 $ 1,350,963,400 

Unobligated balance, end of year:

Apportioned - - 

Exempt from apportionment 138,724,631 121,986,647 

Unapportioned 2,157,655 5,707,971 

Total unobligated balance, end of year: 140,882,286 127,694,618 

Total budgetary resources $ 1,425,159,947 $ 1,478,658,018 

Change in Obligated balance:

Unpaid Obligations:

Unpaid Obligations, brought forward, Oct 1 $ 88,480,376 $ 130,426,238 

Adjustment to unpaid obligations, start of year - - 

Obligations incurred 1,284,277,661 1,350,963,400 

Outlays (gross) (1,293,145,485) (1,390,809,061)

Actual transfers, unpaid obligations (net) - - 

Recoveries of prior year unpaid obligations (2,386,466) (2,100,201)

Unpaid obligations September 30, 2013 77,226,086 88,480,376 

Uncollected payments:

Uncollected pymts, Fed sources, brought forward, Oct 1 - (536,418)

Adjustment to uncollected pymts, Fed sources, start of year - - 

Change in uncollected pymts, Fed sources - 536,418 

Actual transfers, uncollected pymts, Fed sources (net) - - 

Uncollected pymts, Fed sources, September 30, 2013 - - 

Memorandum (non-add) entries:

Obligated balance, start of year $ 88,480,376 $ 130,426,238 

Obligated balance, September 30, 2013 $ 77,226,086 $ 88,480,376 

Budget Authority and Outlays, Net

Budget authority, gross (discretionary and mandatory) $ 1,300,284,718 $ 1,373,203,928 

Actual offsetting collections (discretionary and mandatory) (24,658,251) (27,302,346)

Change in uncollected customer payments from Federal sources - 536,418 

 (discretionary and mandatory) 

Anticipated offsetting collections (discretionary and mandatory) - -

Budget authority, net (discretionary and mandatory) $ 1,275,626,467 $ 1,346,438,000 

Outlays, gross (discretionary and mandatory) $ 1,293,145,485 $ 1,390,809,061

Actual offsetting collections (discretionary and mandatory) (24,658,251) (27,302,346) 

Outlays, net (discretionary and mandatory) 1,268,487,234 1,363,506,715

Distributed offsetting receipts - -

Agency outlays, net (discretionary and mandatory) $ 1,268,487,234 $ 1,363,506,715 
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Notes to the Financial Statements
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Notes to the Financial Statements

51 																																																																								                                                                                                 

NOTE 1 ‐ SIGNIFICANT ACCOUNTING POLICIES

A. Description of the Reporting Entity

The U.S. House of Representatives (House) is one of two separate legislative chambers that comprise the Congress of the

United States. The other is the U.S. Senate (Senate). All lawmaking powers of the Federal government are given to the

Congress under Article I of the Constitution of the United States. The House and Senate jointly agree on a budget for the

Legislative Branch and submit it to the President of the United States. The Members of the House serve two‐year terms of

office, which coincide with the sequential numbering of the entire Congress.  

To help carry out its constitutional duties, the House creates committees of Members and assigns them responsibility for

gathering information, identifying policy problems, proposing solutions, and reporting bills to the full chamber for

consideration. The House elects and appoints Officers and officials to administer both legislative and non‐legislative

functions, which support the institution and its Members in carrying out its legislative duties. The financial statements of

the House provide financial information on the activities of all entities, which are subject to the authority vested in the

House by the U.S. Constitution, public laws, and rules and regulations adopted by the membership of the House.

These financial statements reflect the organizational structure of the House under the sessions of the 112th and 113th

Congress. The fiscal year 2013 financial statements are comprised of two programs: Legislative Activities and Revolving

Funds.   

Legislative Activities

Legislative Activities consist of all financial activity related to the operations of all Member Offices, both in Washington,

D.C. and Congressional districts; all Committees both Standing and Special and Select; Leadership Offices; House Officers

and Offices and Joint Functions that the House shares with the Senate including the Attending Physician and Joint

Committee on Taxation.

House Members are elected from congressional districts of approximately equal population. The financial information

aggregates transactions of the Member districts and Washington, D.C. offices, and includes 435 Representatives; five

Delegates, one each, from the District of Columbia, Guam, Virgin Islands, American Samoa and Northern Mariana Islands;

and one Resident Commissioner from Puerto Rico.  

The Committees financial information aggregates transactions of the Standing and Special and Select Committees under

the sessions of the 112th and 113th Congress. Committees are organized at the beginning of each Congress according to

their jurisdictional boundaries incorporated in the Rules of the House. The Committees of the House under the sessions of

the 112th and 113th Congress are:

Committee on Agriculture

Committee on Appropriations

Committee on Armed Services

Committee on the Budget

Committee on Education and the Workforce  

Committee on Energy and Commerce

Committee on Ethics  

Committee on Financial Services

Committee on Foreign Affairs

Committee on Homeland Security

Committee on House Administration

Committee on the Judiciary

Committee on Natural Resources

Committee on Oversight and Government Reform

Committee on Rules

Committee on Science, Space, and Technology  

Committee on Small Business

Committee on Transportation and Infrastructure

   
Notes to the Financial Statements

52																																																																								                                                                                                 

Committee on Veterans’ Affairs

Committee on Ways and Means

Permanent Select Committee on Intelligence

The House Leadership Offices financial information aggregates transactions of:

Speaker of the House

Majority and Minority Leaders

Majority and Minority Whips

Party Steering Committees, Caucus or Conference, which consist of Representatives of the same political party

The Officers and Legislative Offices financial information aggregates transactions of all legislative support and

administrative functions provided to Members, Committees, and Leadership offices, including:

Chaplain

Chief Administrative Officer

Clerk of the House

Office of Congressional Ethics

Office of Interparliamentary Affairs

Office of the General Counsel

Office of the Historian

Office of Inspector General

Office of the Law Revision Counsel

Office of the Legislative Counsel

Parliamentarian

Sergeant at Arms

The Joint Functions financial information aggregates transactions of the joint activities of the House and the Senate to the

extent that the House funds these functions. House administrative management does not exert direct control over the

expenditures of these functions. The joint functions in these statements include:

Attending Physician

Joint Economic Committee

Joint Committee on the Library

Joint Committee on Printing

Joint Committee on Taxation

Revolving Funds  

Revolving Fund Activities consist of all financial activity related to the operations of all House revolving fund accounts.

The Revolving Funds financial information aggregates transactions of:

House Child Care Center

House Recording Studio  

House Services

Net Expenses of Equipment  

Net Expenses of Telecommunications

Stationery

B. Basis of Consolidation

The consolidated financial statements include the accounts and significant activities of the House. All significant

interoffice balances and transactions have been eliminated to arrive at consolidated financial information, except for the

Statement of Budgetary Resources which is presented on a combined basis in accordance with the Office of Management

and Budget’s (OMB) Circular No. A‐136, Financial Reporting Requirements.  
Notes to the Financial Statements

53 																																																																								                                                                                                 

The financial statements do not include legislative agencies that support the House and that receive separate

appropriations. These agencies are:

Architect of the Capitol

Congressional Budget Office

Government Accountability Office

Government Printing Office

Library of Congress

U.S. Botanic Garden

U.S. Capitol Police

Functions jointly shared between the House and the Senate are included in the financial statements to the extent their

operations are funded by House appropriations. These consist of:

Attending Physician

Joint Economic Committee

Joint Committee on the Library

Joint Committee on Printing

Joint Committee on Taxation

C. Basis of Accounting and Presentation

The financial statements present the financial position, net cost of operations, changes in net position and budgetary

resources of the House. These statements have been prepared in accordance with U.S. Generally Accepted Accounting

Principles (GAAP) issued by the Federal Accounting Standards Advisory Board (FASAB) and the applicable form and

content requirements of the OMB Circular No. A‐136, Financial Reporting Requirements.  

While the House is a Legislative Branch entity, it has elected to incorporate many of the Federal government Executive

Branch agency financial management and reporting standards that management deems necessary for the fair

presentation of financial statement information.

The House’s accounting structure, in accordance with GAAP, utilizes both accrual and budgetary accounting. Under

accrual accounting, events are recognized as they occur, as opposed to when cash is received or disbursed. Therefore,

revenues are recorded when earned and expenses are recorded when a liability is incurred, without regard to receipt or

payment of cash. The budgetary accounting, on the other hand, facilitates compliance with legal constraints on, and

controls over, the use of Federal funds.  

Throughout these financial statements, assets, liabilities, revenues and costs have been classified according to the type of

entity with whom the transactions were made. Intragovernmental assets and liabilities are those from or to other Federal

entities. Intragovernmental earned revenues are collections or accruals of revenue from other Federal entities, and

intragovernmental costs are payments or accruals to other Federal entities.  

While these statements have been prepared from the records of the House in accordance with GAAP and formats

prescribed in OMB Circular No. A‐136, Financial Reporting Requirements, these statements are in addition to the financial

reports used to monitor and control the budgetary resources that are prepared from the same records. These statements

should be read with the realization that they are for a component of the U.S. government, a sovereign entity.   

D. Fund Balance with the U.S. Treasury and Cash

The U.S. Treasury processes cash receipts and disbursements for the House through its cash management services. Fund

Balance with Treasury represents the aggregate amount of House fund accounts with the U.S. Treasury available to pay

current liabilities and finance authorized purchases. Fund Balance with Treasury consists of balances for general fund

expenditure accounts, revolving funds, and other fund types as of the end of the fiscal year. Fund Balance with Treasury

also includes the Congressional Use of Foreign Currency account, which is held at the U.S. Treasury and is maintained and

administered by the Department of State on behalf of the House. The House also maintains an account related to Special

Fund Receipts and Other Fund Types. Cash and other monetary assets include cash on hand that represents deposits in

transit and amounts held in a commercial bank account. (See Note 2)
Notes to the Financial Statements

54

																																																																								                                                                                                 

The following describes the type of funds maintained by the House:

General Fund Expenditure Accounts are fund accounts used to record amounts appropriated by Congress for the general

support of the Federal government.  

Revolving Funds are fund accounts used to record funds authorized by specific provisions of law to finance a continuing

cycle of business–type operations. Receipts are credited directly to the revolving fund as offsetting collections and are

available for expenditure without further action by Congress.  

Special Fund Receipt Accounts are fund accounts used to record receipts from specific sources earmarked by law for

specific purposes.

Other Fund Types include General Fund Receipt and Deposit Fund accounts. General Fund Receipt accounts are used to

record all receipts not earmarked by law for a specific purpose. These receipts may include miscellaneous recoveries and

refunds and fines and penalties. The U.S. Treasury automatically transfers all cash balances in these receipt accounts to

the general fund of the Treasury at the end of each fiscal year. Deposit Fund accounts are used to record monies withheld

from Federal government payments for goods and services received pending payment; and receipts and disbursements

awaiting determination of the proper accounting classification.   

E. Accounts Receivable, Net

Accounts Receivable represents amounts due to the House from Federal entities, Members, employees and/or vendors

for money, goods, and services less an Allowance for Doubtful Accounts. Accounts Receivable primarily arises from

provision of goods and services, commissions, and overpayments. Allowance for Doubtful Accounts is based on an

analysis of outstanding accounts, aging methodologies and historical collection experience. Intragovernmental accounts

receivable are generally considered to be fully collectible. (See Note 3)

F. Inventory and Related Property, Net  

Inventory is tangible personal property that is held for sale. The Chief Administrative Office (CAO) Office Supply Service

and Gift Shop maintain an inventory of supplies and merchandise purchased for resale to the public. Inventories for sale

are valued at the moving weighted average method.  

Operating Material and Supplies are tangible personal property to be consumed during normal operations. The CAO

Logistics and Support Office maintains inventories of such items as hardwood, carpet, leather, fabric, furniture

components, and repair materials purchased by the House for use in its operations. The CAO House Information

Resources Office maintains inventories of such items as fiber jumpers to support network connectivity and patch cords to

support desktop computers. These items are not for sale and are reflected in the financial statements at an estimated

value based on the first in/first out inventory valuation method. (See Note 4)

G. General Property and Equipment, Net

General Property and Equipment consists of office and computer equipment, furniture, vehicles, software, assets

acquired under capital leases, leasehold improvements and work in process. The House capitalizes property and

equipment when the acquisition cost equals or exceeds an established threshold and has a useful life of two years or

more. The costs of such items are recognized as assets when acquired.  

Property and equipment are capitalized if the unit acquisition cost is equal to or greater than $25,000 and the item has a

useful life of two years or more with the exception of software. Software is capitalized if the unit acquisition cost is equal

to or greater than $10,000 and the item has a useful life of two years or more. Work in process consists of capitalized

costs associated with assets received, but not placed in service as of the end of the fiscal year.

An appropriate portion of an asset’s value is reduced and an expense for depreciation or amortization is recognized over

the accounting periods benefited by the asset’s use. The House calculates depreciation and amortization expense based

on the straight‐line method over an asset’s estimated useful life. Depreciation expense is applicable to tangible assets

such as equipment, furniture, and vehicles. Amortization expense is applicable to intangible assets such as software and

capital leases. Assets acquired under capital leases are generally amortized over the lease term. However, if a lease

agreement contains a bargain purchase option or otherwise transfers title of the asset to the House, the asset is

amortized on the same basis as similar categories of owned assets.  
Notes to the Financial Statements

55 																																																																								                                                                                                 

A loss is recognized when the net book value of the asset at the time of disposal exceeds any proceeds received. A gain is

recognized when the net book value of the asset at the time of disposal is less than any proceeds received. (See Note 5)  

The House also entered into capital leases for building structures. Assets under capital leases are structured such that

their terms effectively finance the purchase of the item. Such leases convey the benefits and risks of ownership and are

classified as capital leases, if the lower of net present value or fair market value of the minimum lease payments due at

lease inception meets House capitalization criteria. Items acquired by capital leases are recorded as House assets. The

asset and corresponding liability are recorded at the lower of net present value of the minimum lease payments or fair

market value at lease inception. The portion of capital lease payments representing imputed interest is expensed as

interest on capital leases. (See Note 9)

House office buildings and land occupied by Members and employees in Washington, D.C. are under the custody of the

Architect of the Capitol (AOC) and are excluded from the House’s property and equipment accounts. The House

recognizes an imputed cost and related imputed financing source in its financial statements for the costs associated with

House office buildings. (See Notes 1K and 15)

H. Stewardship Property and Equipment

Stewardship Property, Plant and Equipment (PP&E) includes heritage assets and stewardship land. Heritage assets are

unique due to their historical or natural significance; cultural, educational, or artistic importance; or significant

architectural characteristics. Heritage assets consist of collection‐type heritage assets, such as objects gathered and

maintained for exhibition, for example, museum collections, art collections, and library collections; and non‐collection‐

type heritage assets, such as parks, memorials, monuments, and buildings. These assets are expected to be preserved

indefinitely. The House’s heritage assets are considered collection‐type heritage assets and consist primarily of historical

artwork and artifacts.  

Heritage assets can serve two purposes: a heritage function and a general government operational function. If a heritage

asset serves both purposes, but is predominantly used for general government operations, the heritage asset is

considered a multi‐use heritage asset, which is included in general PP&E on the Balance Sheet. The House office buildings

and land occupied and used by Members and employees in Washington, D.C. meet the criteria of multi‐use heritage

assets. Stewardship responsibility for these multi‐use heritage assets is maintained by the AOC and disclosed on its

financial statements. The House does not possess multi‐use heritage assets or stewardship land.

Heritage assets are disclosed on the Balance Sheet as a note reference with no asset amount shown, and are generally not

included in the general PP&E. The cost of improving, reconstructing, or renovating heritage assets is recognized as an

expense in the period incurred. Similarly, the cost to acquire or construct a heritage asset is recognized as an expense in

the period incurred. Due to their nature, matching costs with specific periods would not be meaningful. (See Note 6 and

Required Supplementary Information)

I. Advances and Prepayments

Advances and prepayments are transfers of cash to cover future expenses or the acquisition of assets. These goods

and/or services are delivered in increments that span several months. Advance payments are recorded as assets and

consist of payments to Federal government entities for contractual services and for mailings that require address

corrections or additional postage. As the goods and/or services are rendered, the Advance account is drawn down and

the appropriate asset or expense is recognized. Prepayments are payments made in advance of the receipt of goods and

services. Prepayments include payments for subscriptions and software integration activities and are initially recorded as

expenses. At year‐end, all such payments made for the current year are analyzed to determine the proper expense and

prepayment amounts applicable to the current accounting period for financial statement purposes. (See Note 7)

J.  Liabilities  

Liabilities represent the probable future outflow or other sacrifice of resources as a result of past transactions or events.  

Liabilities are amounts due to others as a result of items received, services rendered, expenses incurred, assets acquired

and construction or work in process regardless of whether invoices have been received. Liabilities also represent amounts

received that have not yet been earned. Liabilities covered by budgetary resources are liabilities incurred that will be

covered by available budgetary resources encompassing not only new budget authority but also other resources available

to cover liabilities for specified purposes in a given year. Liabilities not covered by budgetary resources include unfunded

liabilities incurred for which revenues or other sources of funds necessary to pay the liabilities have not been made

available through congressional appropriations or current earnings of the reporting entity. (See Note 8)
Notes to the Financial Statements

56

																																																																								                                                                                                 

The House’s liabilities include:

Accounts Payable that represent amounts owed for the cost of goods and services received but not yet paid. The House

estimates certain accounts payable balances based on methodology that encompasses historical data and the first two

month’s financial activity of the subsequent fiscal year.   

Advances from Others that represent advance payments received from other Federal government entities for shared

services, in advance of the delivery of these services. As the services are rendered the Advances from Others account is

drawn down and the appropriate revenue is recognized. The House received payments in advance of receipt of shared

services from the Library of Congress.  

Capital Lease Liability that represents the portion recorded at the lower of net present value or fair market value of the

minimum lease payments at lease inception.

Unfunded Workers’ Compensation Actuarial Liability that represents an estimate based on actuarial calculations using

historical payment patterns to predict what costs will be incurred in the future. The liability is adjusted annually by

applying actuarial procedures. Any upward or downward adjustment to the liability is recorded as an annual increase or

decrease to benefits expense. The House calculated the actuarial liability based on a model developed by the U.S.

Department of Labor (DOL). The Federal Employees’ Compensation Act (FECA) provides income and medical cost

protection to covered Federal civilian employees injured on the job, employees who have incurred a work‐related

occupational disease, and beneficiaries of employees whose death is attributable to a job‐related injury or occupational

disease. Claims incurred for the benefit of House employees under FECA are administered by DOL, which pays the initial

claim and obtains reimbursement from the House.  

Accrued Payroll and Benefits and Annual Leave that represent both a funded and unfunded liability. A funded liability has

a corresponding appropriation to liquidate it. An unfunded liability is a liability that is incurred during the current or prior

year but is not payable until a future fiscal year for which an appropriation has not yet been received.

Accrued payroll and benefits include salaries and associated benefits earned in the current fiscal year and paid in the

subsequent fiscal year.

Annual leave for the House Officers, the Inspector General and their employees is accrued as earned, and the liability is

reduced as leave is taken. The accrued annual leave balances are calculated according to Public Law 104‐53, November

19, 1995, Sec. 109 Stat. 522 (i.e., the lesser of the employee’s monthly pay or the monthly pay divided by 30 days and

multiplied by the number of days of accrued leave). The House utilizes actual hours to calculate the liability. Sick and

other types of paid leave are expensed as they are taken. The Members’ and Committees’ Congressional Handbooks allow

offices to adopt personnel policies that provide for the accrual of annual leave and use of such leave. Leadership and

other select House offices have also adopted similar policies. While leave is tracked from one pay period to the next, a

consistent policy has not been formally adopted by these entities regarding the accrual and payment of leave time.

Therefore, an accrued leave liability for Members, Committees, Leadership and select House offices is estimated on the

financial statements. In FY 2013, the estimate was based on a three‐year average of actual annual leave paid.   

Other Intragovernmental Liabilities that represent the Accrued workers’ compensation amount billed by DOL that will be

paid in subsequent fiscal years and Unemployment compensation amounts owed to DOL.   

Other Public Liabilities that represent amounts held pending proper accounting disposition or amounts withheld from

payments for goods and services received pending payment.  

K. Revenue and Other Financing Sources

Appropriations

The House finances most of its operations through congressional appropriations of budget authority. To the extent that

revenue generated by some House entities does not cover expenses, appropriations are required. The House receives

annual, multi‐year and no‐year appropriations that may be used, within statutory limits, for operating and capital

expenditures. A financing source is recognized for these appropriated funds received, less appropriations transferred or

not available through rescission or cancellation. The House usually receives the full amount of its appropriation at the

beginning of each fiscal year.  
Notes to the Financial Statements

57

																																																																								                                                                                                 

Exchange and Non‐Exchange Revenue

The House classifies revenues as either exchange revenue or non‐exchange revenue. Exchange revenue is derived from

transactions in which both the government and the other party receive value; and is recognized when goods have been

delivered or services rendered. The House’s exchange revenue consists of (1) sales of goods to the public for Office Supply

Service and Gift Shop sales; (2) sales of services to the public for child care fees, photography sales, postal fees and

Attending Physician fees; and (3) other revenue for vendor commissions. Non‐exchange revenue is derived from the

government’s sovereign right to demand payment from the public (e.g., taxes, duties, fines, and penalties) but also

includes donations. The House reports non‐exchange revenue collected from donations for the Reduction of Public Debt

and Ethics Fines.

Intragovernmental Costs and Earned Revenues

The House earns intragovernmental revenue by providing mail and telecommunication services primarily to other

legislative entities. Intragovernmental costs and exchange revenue represent transactions made between two reporting

entities within the Federal government and are disclosed separately from costs and exchange revenue with the public

(exchange transactions made between the reporting entity and a non‐Federal entity). Intragovernmental expenses relate

to the source of goods and services purchased by the reporting entity and not to the classification of related revenue. The

purpose of this classification is to enable the Federal government to provide consolidated financial statements, and not to

match public and intragovernmental revenue with costs that are incurred to produce public and intragovernmental

revenue. The net cost of the House’s operations includes gross costs incurred by the House less any exchange revenue

earned from House activities.   

Imputed Financing from Cost Absorbed by Others (and Related Imputed Costs)

The House recognizes the amount of cost incurred by a Federal entity for goods or services provided and paid for in total,

or in part, by other Federal entities. Since the cost is not actually reimbursed to these Federal entities, an imputed

financing source is also recognized to offset the costs financed by the entities. The imputed cost and imputed financing

source for costs are associated with the occupancy of the U.S. Capitol and House office buildings under the custody of the

AOC and the Federal Employee and Veterans’ Benefits. The imputed cost is recognized in the Statement of Net Cost and

the imputed financing source is recognized in the Statement of Changes in Net Position.  

Occupancy Cost:

The House recognizes an occupancy cost for the U.S. Capitol and House office buildings under the custody of the AOC that

are occupied by Members and staff in Washington, D.C. The House office buildings are comprised of the Cannon, Ford,

Longworth, Rayburn, and other buildings and facilities. The AOC receives an appropriation for the maintenance, care and

operations of the House office buildings, facilities and grounds; and costs associated with the acquisition and

maintenance of the land and buildings is accounted for by the AOC.  

The imputed occupancy cost for the U.S. Capitol and House office buildings is calculated by multiplying the gross square

footage of the buildings by the estimated per square foot value. A common area factor of 11% was applied to the gross

square footage. The industry standard rental rate increase of 1.5% over FY 2012 is reflected in the FY 2013 occupancy

costs.

Federal Employee and Veterans’ Benefits Cost:

Federal‐employing entities recognize their share of the cost of providing future pension benefits to eligible employees at

the time the employees’ services are rendered. The pension expense recognized in the Statement of Net Cost is the

current service cost for House employees less the amount contributed by the employee.  

The measurement of the service cost requires the use of actuarial cost methods and assumptions, with the factors applied

by the House provided by the Office of Personnel Management (OPM), the Federal agency that administers the plan. The

excess of the recognized pension expense over the amount contributed by the House represents the amount being

financed directly through the Civil Service Retirement and Disability Fund administered by OPM.  

The House does not receive an appropriation to fund this cost. Therefore, this portion of the pension cost is considered an

imputed financing source to the House, and is included in the Imputed Financing from Costs Absorbed by Others on the

Statement of Changes in Net Position.  
Notes to the Financial Statements

58

																																																																								                                                                                                 

Federal‐employing entities also recognize a current period expense for the future cost of post‐retirement health benefits

and life insurance for its employees while they are still employed. This cost is included in the Statement of Net Cost.

Employees and the House do not currently make contributions to fund these future benefits, and the House does not

receive an appropriation to fund this expense. Therefore, this portion of the post‐retirement health benefits and life

insurance is considered an imputed financing source to the House, and is included in Imputed Financing from Costs

Absorbed by Others on the Statement of Changes in Net Position. (See Note 15)

L. Personnel and Benefits Compensation

House Members and employees are covered by either Civil Service Retirement System (CSRS), the Federal Employees

Retirement System (FERS) or the Federal Employees Retirement System – Revised Annuity Employee (FERS‐RAE). Both

Members and employees are eligible for retirement benefits under CSRS, FERS or FERS‐RAE.  

With few exceptions, employees of the House are covered by one of the following retirement programs:

1. Employees hired before January 1, 1984, and who have been employed continuously without a break in service

of more than 365 days since December 31, 1983 are covered under CSRS.  

2. Employees hired on or after January 1, 1984, and before January 1, 2013, are covered under FERS.   

3. Employees hired on or after January 1, 2013, and who would normally be placed under FERS, are covered under

FERS‐RAE.   

A CSRS basic annuity, unreduced for age, debts to the fund, or survivor’s benefits, is calculated by multiplying the highest

3 consecutive years’ average salary by a percentage factor which is based on the length of Federal service. However,

Members’ benefits are different from those of employees. For example, a Member covered by CSRS is eligible to receive

unreduced retirement benefits at age 60 if he or she has 10 years of Member service. An employee is eligible to receive

reduced benefits at age 50 with 20 years of service or at any age with 25 years of service. The FERS and FERS‐RAE basic

benefit plans provide the same benefits for either Members or employees.  

CSRS employees contribute a portion of their earnings to the Civil Service Retirement Fund. The House also contributes an

amount to this fund. FERS and FERS‐RAE employees, in addition to paying Social Security, contribute a portion of their

base earnings to the FERS and FERS‐RAE retirement funds. The House also contributes an amount toward the FERS and

FERS‐RAE retirement and Social Security funds.  

FERS, FERS‐RAE and CSRS employees can contribute to the Thrift Savings Plan (TSP) up to the IRS limit. FERS and FERS‐RAE

employees also receive an automatic one percent House‐paid contribution, as well as an additional House matching TSP

contribution up to five percent of their basic pay. CSRS employee contributions to TSP do not receive matching House

contributions. FERS and FERS‐RAE employees could receive benefits from the basic FERS annuity, the Social Security

System, and TSP. CSRS employees could receive benefits from CSRS and TSP. (See Note 12) Post‐employment benefits,

health, and life insurance are not reported by the House, rather they are reported by OPM.

M. Net Position

The components of Net Position are:

Unexpended Appropriations

Unexpended Appropriations includes the portion of the House’s appropriations represented by undelivered orders and

unobligated balances. The amount of unexpended appropriations reported on the Balance Sheet should equal the

amount of unexpended appropriations reported on the Statement of Changes in Net Position.

Appropriations are not considered expended until goods have been received or services have been rendered. The House

has single, multi and no‐year appropriations. For multi‐year appropriations the House alternates each fiscal year between

15‐month and 27‐month multi‐year funding. Funds cancel two years after expiration and are no longer available for

obligation or expenditure for any purpose and are returned to the U.S. Treasury.  

Cumulative Results of Operations

Cumulative Results of Operations includes the net results of operations since inception plus the cumulative amount of

prior period adjustments. The amount of cumulative results of operations reported on the Balance Sheet should equal

the amount of cumulative results of operations reported on the Statement of Changes in Net Position.
Notes to the Financial Statements

59

																																																																								                                                                                                 

The net difference between expenses and revenue and financing sources including appropriations, revenues from

operations and imputed financing sources.

N. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the

reported amount of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the

financial statements, and the amount of revenue and expense reported during the period. Actual results could differ from

those estimates.  

   
Notes to the Financial Statements

60

NOTE 2 ‐ FUND BALANCE WITH THE U.S. TREASURY AND CASH

Fund Balances with Treasury (FBWT) as of September 30, 2013 and 2012 were:  

Fund Balance with Treasury 2013 2012

General and Other Funds

     House maintained $   158,882,728   $   153,191,222

     Congressional Use of Foreign Currency          29,761,306           34,831,086

Total General and Other Funds       188,644,034        188,022,308

Revolving Funds          28,629,626           27,291,082

Total $   217,273,660   $   215,313,390

Status of Fund Balance with Treasury as of September 30, 2013 and 2012 were:  

Status of Fund Balance with Treasury 2013 2012

Unobligated Balance

     Available $   138,724,631   $   121,986,647

     Unavailable            2,157,655             5,707,971

Obligated Balance not yet Disbursed          77,226,086           88,480,376

Other Funds              (834,712)              (861,604)

Total $   217,273,660   $   215,313,390

Other funds represent deposit funds held at the U.S. Treasury.  

Cash and Other Monetary Assets as of September 30, 2013 and 2012 were:

Cash and Other Monetary Assets 2013 2012

Cash on Hand $                3,782   $                2,948

Total $                3,782   $                2,948

Funds that were canceled and returned to the U.S. Treasury as of September 30, 2013

and 2012 were:  

Appropriations 2013 2012

2011 (single year) $        2,054,950 $                         ‐  

2010 (single year)                             ‐          23,125,275  

2010/2011 (multi‐year)                   6,266                             ‐  

2009/2011 (multi‐year)                   2,317                             ‐  

Total $        2,063,533   $     23,125,275  

NOTE 3 ‐ ACCOUNTS RECEIVABLE, NET

Accounts Receivable, Net as of September 30, 2013 and 2012 were:

Accounts Receivable, Net 2013 2012

Intragovernmental

     Accounts Receivable   $             63,034   $             66,867

Total Intragovernmental                  63,034                   66,867

With the Public

     Accounts Receivable               536,280                498,248

     Allowance for Doubtful Accounts                (42,780)                (50,916)

Total With the Public               493,500                447,332

Total      $           556,534   $           514,199
Notes to the Financial Statements

61

																																																																								                                                                                                 

NOTE 4 ‐ INVENTORY AND RELATED PROPERTY, NET

Inventory and Related Property, Net as of September 30, 2013 and 2012 were:  

Inventory and Related Property, Net 2013 2012

Operating Materials and Supplies Held for Use $           508,252   $           494,183

Inventory Purchased for Resale               814,756                872,443

Total $        1,323,008   $        1,366,626

NOTE 5 ‐ GENERAL PROPERTY AND EQUIPMENT, NET

General Property and Equipment, Net as of September 30, 2013 and 2012 and the related depreciation and amortization

expense were:  

2013 Classes of                       Service    Acquisition Depreciation Net Book Depreciation

Property and Life Cost    Value Expense

Equipment (Years)

Work in Process N/A   $      1,001,079   $                    ‐   $   1,001,079    $                    ‐ 

Computer Software in Development N/A           3,344,500                            ‐         3,344,500                           ‐ 

Computer Software and Hardware 3/5         86,972,382        76,558,970      10,413,412       15,418,507

Assets Under Capital Lease 10           1,354,473           1,320,611              33,862             135,447

Equipment    5         63,069,518         52,118,129      10,951,389          6,317,902

Motor Vehicles 5         10,532,139         10,444,415              87,724               91,155

Furnishings and Other Equipment 10           1,148,767               663,081            485,686               73,304

Leasehold Improvements 10           9,085,375           8,606,170            479,205             227,514

Total   $ 176,508,233   $ 149,711,376   $ 26,796,857    $ 22,263,829

                 

2012 Classes of                       Service    Acquisition Depreciation Net Book Depreciation

Property and Life Cost    Value Expense

Equipment (Years) (Restated) (Restated)

Work in Process N/A   $      1,512,496   $                       ‐   $   1,512,496    $                    ‐ 

Computer Software in Development N/A              425,831                            ‐            425,831                           ‐ 

Computer Software and Hardware 3/5         83,695,798         62,750,332      20,945,466      18,883,665

Assets Under Capital Lease 10                  1,354,473           1,185,163            169,310             135,447

Equipment    5         63,333,196         47,368,881      15,964,315          6,692,430

Motor Vehicles 5         10,514,590         10,335,711            178,879               94,979

Furnishings and Other Equipment 10           1,240,518               681,528            558,990               73,304

Leasehold Improvements 10           9,085,375           8,378,656            706,719             738,633

Total   $ 171,162,277   $ 130,700,271   $ 40,462,006    $ 26,618,458

   
Notes to the Financial Statements

62																																																																								                                                                                                 

NOTE 6 – STEWARDSHIP PROPERTY AND EQUIPMENT

Physical counts for collection‐type heritage assets as of September 30, 2013 and 2012 were:

Heritage Assets 2012 Additions Withdrawals 2013

     Artwork                 320                                 3  ‐                  323  

     Artifacts              4,636                            579                             26               5,189  

Total              4,956                            582                             26               5,512  

The House’s heritage assets are directly related to its mission to document and preserve the legislative integrity and

traditions of the institution. Permanent authority for the Clerk of the House originated in the opening days of the First

Congress, when John Beckley was elected Clerk on April 1, 1789, pursuant to Article I of the Constitution: “The House of

Representatives shall chuse (sic) their Speaker and other Officers....” The Clerk’s responsibilities to document and

preserve the activities of Congress have grown over the centuries, and are found in Rules VII and XI of the House, and by

the Rules of the House of Representatives Fine Arts Board, established via 40 USC Sec. 188c (Public Law 100‐696 [Title X]).  

The House’s stewardship responsibility for its heritage assets includes those in or associated with the House, its legislative

history, Members and institutional heritage. Under the provisions of the House of Representatives Fine Arts Board, the

Clerk is responsible for the administration, maintenance, and display of the works of fine art and other similar property of

the Congress for display or for other use in the House wing of the Capitol, the House Office Buildings, or any other

location under the control of the House in accordance with Public Law 100‐696. The House’s heritage assets are curated

by the House Curator in the Clerk’s Office of History and Preservation. The House Curator maintains records, both paper

and electronic, for works of art and artifacts. Staff and resources are devoted to the conservation and preservation of

heritage assets, using professional standards established by the American Institute for Conservation and the National

Archives and Records Administration. These standards provide for cleaning, storing, displaying, handling and protecting

the House’s heritage assets.  

The House acquires heritage assets by purchase, transfer from Federal entities, gift, or by provision of federal law. Prior to

acquiring these assets, the House Curator, on behalf of the Clerk and the House of Representatives Fine Art Board,

ensures they meet minimum standards as required by the American Association of Museum’s ethics guidelines and

standards and best practices for accessioning of objects into museum collections. The House’s collections continue to

increase as it acquires additional assets and few items have been retired or disposed of to date.  

Deaccessioning of objects and related withdrawals or disposals will only occur if the House Curator, in accordance with

the American Association of Museum’s guidelines and best practices, determines the asset is in irretrievable condition;

does not meet the needs of the collection; or withdraws due to exchange or gift of unwanted or duplicate copies. Staff

ensure that heritage assets remain in good condition, carefully preserving and saving these treasures for present and

future generations.  

The Required Supplementary Information section of this report provides additional information on the condition of

stewardship heritage assets.

Descriptions of the types of heritage assets are:

Artwork

The House’s artwork encompasses oil and acrylic paintings, works on paper, and sculpture in bronze, marble and other

media.

Artifacts

The House’s historical artifacts include objects in all media, including but not limited to paper, metal, plaster, wood,

textile and stone.
Notes to the Financial Statements

63

																																																																								                                                                                                 

NOTE 7 ‐ ADVANCES AND PREPAYMENTS

Advances and Prepayments as of September 30, 2013 and 2012 were:  

Advances and Prepayments 2013 2012

Intragovernmental $             10,733   $             10,756

Public            5,839,165             4,170,614

Total $        5,849,898   $        4,181,370

NOTE 8 ‐ LIABILITIES  

Liabilities are classified as either current or non‐current. Current liabilities refer to liabilities that are expected to settle

within 12 months of the Balance Sheet date. Non‐current refers to liabilities that are expected to settle more than 12

months of the Balance Sheet date.

Liabilities covered and not covered by budgetary resources as of September 30, 2013 and 2012 were:  

Liabilities Covered by Budgetary

Resources

Liabilities Not Covered by

Budgetary Resources Liabilities 2013

   Current Non‐Current Current Non‐Current    

Intragovernmental Liabilities     

     Accounts Payable $    4,476,022   $                       ‐    $                      ‐   $                     ‐   $    4,476,022

     Advances from Others            197,209                           ‐                           ‐                            ‐             197,209

     Capital Lease Liability              72,862                           ‐                           ‐                            ‐               72,862

     Other Liabilities      

          Accrued Benefits         1,679,783                           ‐                           ‐                            ‐          1,679,783

          Accrued Workers’ Compensation            487,583                           ‐                           ‐                            ‐             487,583

          Unemployment Compensation            887,040                           ‐                           ‐                            ‐             887,040

          Other Deposit Liabilities          (888,752)                          ‐                           ‐                            ‐           (888,752)

     Total Other Liabilities         2,165,654  ‐   ‐    ‐          2,165,654

Total Intragovernmental Liabilities         6,911,747                           ‐                           ‐                            ‐          6,911,747

Public Liabilities

     Accounts Payable      23,997,401  ‐   ‐    ‐       23,997,401

     Actuarial FECA Liability  ‐   ‐   ‐        38,506,935       38,506,935

     Accrued Payroll and Benefits         6,989,142  ‐   ‐    ‐          6,989,142

     Unfunded Accrued Annual Leave  ‐   ‐   ‐           7,919,488          7,919,488

     Capital Lease Liability  ‐   ‐   ‐    ‐   ‐ 

     Other Liabilities            261,983  ‐   ‐    ‐             261,983

Total Public Liabilities      31,248,526  ‐   ‐        46,426,423       77,674,949

Total $  38,160,273   $                     ‐   $                     ‐    $  46,426,423   $  84,586,696
Notes to the Financial Statements

64

																																																																								                                                                                                 

Liabilities Covered by Budgetary

Resources

Liabilities Not Covered by

Budgetary Resources Liabilities 2012

   Current Non‐Current Current Non‐Current    

Intragovernmental Liabilities        

     Accounts Payable   $    5,580,540 $                           ‐   $                     ‐    $                     ‐   $    5,580,540

     Advances from Others            113,286  ‐   ‐                          ‐             113,286

     Capital Lease Liability              19,586  ‐             260,427                72,862             352,875

     Other Liabilities       

          Accrued Benefits         2,025,772  ‐   ‐    ‐          2,025,772

          Accrued Workers’ Compensation          2,258,804  ‐   ‐    ‐          2,258,804

          Unemployment Compensation             562,991  ‐   ‐                          ‐             562,991

          Other Deposit Liabilities          (858,025)  ‐   ‐    ‐           (858,025)

     Total Other Liabilities         3,989,542                             ‐   ‐    ‐          3,989,542

Total Intragovernmental Liabilities          9,702,954                             ‐             260,427                72,862       10,036,243

Public Liabilities

     Accounts Payable      28,888,518  ‐   ‐                          ‐       28,888,518

     Actuarial FECA Liability  ‐   ‐   ‐        25,969,234       25,969,234

     Accrued Payroll and Benefits          6,664,806  ‐   ‐                          ‐          6,664,806

     Unfunded Accrued Annual Leave  ‐   ‐   ‐           7,391,503          7,391,503

     Capital Lease Liability  ‐   ‐   ‐                          ‐   ‐ 

     Other Liabilities            159,493  ‐   ‐    ‐             159,493

Total Public Liabilities      35,712,817  ‐   ‐        33,360,737       69,073,554

Total   $  45,415,771 $                           ‐   $        260,427    $  33,433,599   $  79,109,797

NOTE 9 ‐ LEASE COMMITMENTS  

Capital Leases  

Assets Under Capital Lease as of September 30, 2013 and 2012 were:

Summary of Assets Under Capital Lease 2013 2012

Buildings Structures $        1,354,473   $        1,354,473

Accumulated Depreciation          (1,320,611)          (1,185,163)

Total $             33,862   $           169,310

Future Capital Lease Payments Due as of September 30, 2013 were:  

Year

Building

Structures

2014 $             75,154

2015                             ‐ 

2016                             ‐ 

2017                             ‐ 

Thereafter                             ‐ 

Total Future Capital Lease Payments                  75,154

Less:  Imputed Interest                  (2,292)

Less:  Executory Costs                             ‐ 

Net Capital Lease Liability $             72,862

The House maintained capital leases for building structures.  The occupancy agreement for the building structures lease

includes multi‐year funding obligations of the tenant that state the agreement is cancelable upon 30 days written notice.

Space relinquishment rights and obligations state the agreement is cancelable by providing 30 days written notice to the
Notes to the Financial Statements

65

																																																																								                                                                                                 

U.S. General Services Administration. The House also agrees that its right to not renew the lease for a fiscal year is limited

solely to the House not obtaining an appropriation for the year in an amount equal to or in excess of lease payments for

the year. The House may terminate the agreement in whole or in part as prescribed in the agreed upon settlement

methodology.

Operating Leases

Future Operating Lease Payments Due as of September 30, 2013 were:

Year Vehicles Office Space Parking Total

2014   $           500,467    $     21,507,323   $           154,120   $     22,161,910  

2015               110,789              5,829,720                   72,072             6,012,581  

          Total    $           611,256    $     27,337,043   $           226,192   $     28,174,491  

The House maintains operating leases for vehicles and district office space and parking. The lease agreements are in

accordance with House rules and regulations and agreed upon vendor terms and conditions. In accordance with the

Members’ Congressional Handbook, the House requires that leases entered into by Members for space be no longer than

the elected term of the Member. Members and Officers also enter into leases to rent vehicles for official business

purposes. A Member may lease a vehicle for a period that exceeds the current congressional term, but the Member

remains personally responsible for the lease liability if service to the House concludes prior to lease termination.

The House enters into operating leases for temporary usage of office space, vehicles, software, computers and other

equipment. Leases that convey the benefits and risks of ownership, but do not meet House capitalization criteria are also

recognized as operating leases. Operating lease payments are recorded as expenses. Future operating lease payments are

not accrued as liabilities. Members may lease office space in their districts through the U.S. General Services

Administration or may directly lease space from the private sector.  

NOTE 10 ‐ COMMITMENTS AND CONTINGENCIES

Contingencies should be recognized as a liability when a past transaction or event has occurred, a future outflow or other

sacrifice of resources is probable, and the related future outflow or sacrifice of resources is measurable. The House does

not have any contingencies where the sacrifice of resources is probable. The House is currently involved in two lawsuits

where the sacrifice of federal resources is reasonably possible. However, the House cannot predict at this time with any

degree of accuracy the range of potential loss in the event of an unfavorable outcome.

   
Notes to the Financial Statements

66

NOTE 11 ‐ INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE  

Intragovernmental Costs and Exchange Revenue as of September 30, 2013 and 2012 were:  

Intragovernmental Costs and Exchange Revenue 2013 2012                 

(Restated)

Legislative Activities

     Intragovernmental Costs $     525,236,959   $     546,801,656  

     Public Costs          995,029,611       1,070,305,192  

          Total Costs      1,520,266,570       1,617,106,848  

     Intragovernmental Earned Revenue             (3,142,500)             (3,622,335)

     Public Earned Revenue                (414,767)                (499,896)

          Total Earned Revenue             (3,557,267)             (4,122,231)

Net Program Costs      1,516,709,303       1,612,984,617  

Revolving Funds

     Intragovernmental Costs                  159,284                   213,094  

     Public Costs              5,423,654               1,325,849  

          Total Costs              5,582,938               1,538,943  

     Intragovernmental Earned Revenue             (2,005,370)             (2,051,851)

     Public Earned Revenue             (3,261,381)             (3,378,287)

          Total Earned Revenue             (5,266,751)             (5,430,138)

Net Program Costs                  316,187              (3,891,195)

Total

     Intragovernmental Costs          525,396,243           547,014,750  

     Public Costs 1,000,453,265 1,071,631,041

          Total Costs 1,525,849,508 1,618,645,791

     Intragovernmental Earned Revenue             (5,147,870)             (5,674,186)

     Public Earned Revenue             (3,676,148)             (3,878,183)

          Total Earned Revenue             (8,824,018)             (9,552,369)

Net Cost of Operations $  1,517,025,490   $  1,609,093,422  
Notes to the Financial Statements

67 																																																																								                                                                                                 

NOTE 12 ‐ PERSONNEL AND BENEFITS COMPENSATION

Personnel and Benefits Compensation as of September 30, 2013 and 2012 were:   

Member and Employee Personnel and Benefits Compensation 2013 2012

Personnel Compensation $      752,241,955   $      770,981,237

Retirement Plan Contributions         147,373,582           155,132,137

Social Security           51,614,809             52,455,732

Health Insurance           53,400,316             54,496,708

Student Loan/Fitness Center Programs           14,168,844             15,270,909

Unemployment and Workers’ Compensation             6,449,496               5,005,870

Transit Benefits             2,392,215               2,619,738

Life Insurance             1,131,527               1,170,593

Death Benefits             1,495,249                   731,845

Annual Leave                 527,985                 (432,208)

Allowances                   25,000                     25,000

Workers' Compensation Actuarial Adjustment           12,537,701               4,679,150

Total $  1,043,358,679   $  1,062,136,711

NOTE 13 ‐ EMERGENCY PREPAREDNESS

The House continues to develop contingency plans to ensure the continuation of all House Operations in the event of an

emergency evacuation. Approximately $15 million and $21 million were expended in 2013 and 2012, respectively.

NOTE 14 ‐ EXCHANGE REVENUES

Reporting entities that provide goods and services to the public or another Government entity should disclose specific

information related to their pricing policies. In certain cases, the prices charged by the House for the sale of goods and

services are set by House rules and regulations, which for program and other reasons may not represent full cost. In other

cases, prices set for goods and services are intended to recover the full costs incurred by these activities (e.g., child care

fees, postal fees, and Gift Shop sales to the public).

   
Notes to the Financial Statements

68																																																																								                                                                                                 

NOTE 15 ‐ IMPUTED FINANCING FROM COST ABSORBED BY OTHERS

The House must recognize an imputed cost and imputed financing source for costs associated with the occupancy of the

U.S. Capitol and House office buildings and Federal Employee and Veterans’ Benefits. The imputed cost is recognized in

the Statement of Net Cost and the imputed financing source is recognized in the Statement of Changes in Net Position.

Imputed Financing from Cost absorbed by Others as of September 30, 2013 and 2012 were:

Imputed Cost and Financing Source 2013 2012

Occupancy Costs $   164,853,737   $   162,390,135

Federal Employee and Veteran’s Benefits

     Current Service Cost ‐ Federal Employees Health Benefits           40,474,215           48,611,215

     Current Service Cost ‐ Federal Pensions          25,950,416           18,198,342

     Current Service Cost ‐ Federal Employees Group Life Insurance               110,414                114,593

Total Federal Employee and Veteran’s Benefits          66,535,045           66,924,150

Claims Paid by the U.S. Treasury's Judgment Fund

  on behalf of the House                             ‐                132,665

Total $   231,388,782   $   229,446,950

NOTE 16 ‐ UNDELIVERED ORDERS AT THE END OF THE PERIOD

  

Undelivered Orders represent the amount of paid and unpaid orders for goods and/or services ordered which have not

been received.

Undelivered Orders as of September 30, 2013 and 2012 were:

Undelivered Orders at the End of the Period 2013 2012

Undelivered Orders, Unpaid $     38,709,374   $     42,444,374

Undelivered Orders, Paid            5,849,898             4,181,370

Total $     44,559,272   $     46,625,744

NOTE 17 ‐ PERMANENT INDEFINITE APPROPRIATIONS

A permanent and indefinite appropriation is a standing appropriation which, once made, is always available for specified

purposes and does not require repeated action by Congress to authorize its use. Legislation authorizing an agency to

retain and use offsetting receipts tends to be permanent; if so, it is a form of permanent appropriation. This appropriation

is for an unspecified amount of money; and may appropriate all or part of the receipts from certain sources, the specific

amount of which is determinable only at some future date, or it may appropriate “such sums as may be necessary” for a

given purpose.  

The House has two permanent and indefinite appropriations. These appropriations include the Compensation of

Members and Related Administrative Expenses and Congressional Use of Foreign Currency.

 Compensation of Members and Related Administrative Expenses is maintained and administered by the House.

Public Law 97‐51, Sec. 130(c), Oct. 1, 1981, 95 Stat. 966, “Appropriation of funds for Compensation of Members

of Congress and for Administrative Expenses at Levels Authorized by Law and Recommended by the President for

Federal Employees”. The appropriation funds the payroll and benefits compensation for Members of Congress

and related administrative expenses in support of administering the fund.
Notes to the Financial Statements

69 																																																																								                                                                                                 

 Congressional Use of Foreign Currency is maintained and administered by the Department of State on behalf of

the House. This account, which was established in 1948 and made permanent in 1981, is authorized by legislation

codified in Title 22, Sec. 1754 of the United States Code. The funds are available to Congressional Committees

and delegations to cover local currency expenses incurred while traveling abroad. Use of the foreign currency

account for Congressional delegations and other official foreign travel of the House is authorized by either the

Speaker of the House or the chairman of a Standing, Special and Select, or Joint Committee.   

NOTE 18 ‐ EXPLANATION OF DIFFERENCES BETWEEN THE STATEMENT OF BUDGETARY RESOURCES

AND THE BUDGET OF THE U.S. GOVERNMENT

The Budget of the U.S. Government with actual amounts for the year ended September 30, 2013 has not been published

as of the issue date of these financial statements.  This document will be available in February 2014.

Differences between the Statement of Budgetary Resources and the Budget of the U.S. Government as of  

September 30, 2012 were:  

Differences between the Statement of Budgetary

Resources and the Budget of the U.S. Government

Budgetary

Resources

Net

Outlays

Statement of Budgetary Resources $ 1,346,438,000 $ 1,363,506,715  

Difference                (438,000)                493,285  

Budget of the U.S. Government $ 1,346,000,000   $ 1,364,000,000  

The House deems the variances between the amounts reported in the Statement of Budgetary Resources and the actual

amounts reported in the Budget of the U.S. Government for budgetary resources and net outlays to be immaterial and/or

insignificant.  As such, reconciliation of this item is not necessary and therefore not included.

   
Notes to the Financial Statements

70

																																																																								                                                                                                 

NOTE 19 ‐ RECONCILIATION OF BUDGETARY RESOURCES OBLIGATED TO NET COST OF OPERATIONS

2013 2012

        

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations incurred   $      1,284,277,661    $       1,350,963,400

Spending Authority from Offsetting Collections and Recoveries               (27,044,717)                (28,866,129)

Obligations Net of Offsetting Collections and Recoveries             1,257,232,944             1,322,097,271

Offsetting Receipts                              ‐                               ‐  

Net Obligations             1,257,232,944             1,322,097,271

Other Resources

Imputed Financing from Costs Absorbed by Others              231,388,782                229,446,950

Net Other Resources Used to Finance Activities              231,388,782                229,446,950

Total Resources Used to Finance Activities           1,488,621,726             1,551,544,221

Resources Used to Finance Items not Part of the Net Cost of Operations:

Change in Budgetary Resources Obligated for Goods, Services,

and Benefits Ordered but not Yet Provided                   2,150,395                   43,872,073

Resources that Finance the Acquisition of Assets               (11,887,622)                (20,645,707)

Other Resources or Adjustments to Net Obligated Resources that do   

not affect Net Cost                      297,604                        391,217

Total Resources Used to Finance Items not Part of the Net Cost of Operations                 (9,439,623)                  23,617,583

Total Resources Used to Finance the Net Cost of Operations $      1,479,182,103    $       1,575,161,804

Components of Net Cost of Operations that will not Require

or Generate Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods:

Increase/(Decrease) in Actuarial Liability   $            12,537,701    $               4,679,150

Increase/(Decrease) in Annual Leave Liability                      527,985                       (432,208)

Other                       (34,335)                       819,679

Total Components of Net Cost of Operations Requiring or  

Generating Resources in Future Periods                13,031,351                     5,066,621

Depreciation and Amortization                22,263,829                   26,618,458

Revaluation of Assets or Liabilities                       (46,722)                          81,299

Other                   2,594,929                     2,165,240

Total Components of Net Cost of Operations not Requiring or

Generating Resources                24,812,036                   28,864,997

Total Components of Net Cost of Operations that will not

Require or Generate Resources in the Current Period                37,843,387                   33,931,618

Net Cost of Operations   $      1,517,025,490    $       1,609,093,422

    

The presentation of Note 19 – Reconciliation of Budgetary Resources Obligated to Net Cost of Operations was revised

during FY 2013. Certain FY 2012 activity and balances presented in Note 19 were reclassified to conform to the current

year presentation of Note 19.  

   
71

Notes to the Financial Statements

																																																																								                                                                                                 

NOTE 20 ‐ RESTATEMENTS

Note 5 – General Property and Equipment, Net  

During FY 2013, it was identified that the House’s system of record contained property that was no longer owned by the

House. The House performed an analysis of its property records and identified equipment, software, and hardware with

acquisition cost and accumulated depreciation totaling $44.7 million that was physically disposed prior to FY 2012. Since

the property was fully depreciated, and therefore did not have a net book value, there was no effect on the FY 2012

Balance Sheet and only Note 5 General Property and Equipment required restatement.  

Note 11 – Intragovernmental Costs and Exchange Revenue

The House reclassified FY 2012 imputed and other intragovernmental expenses totaling $235.0 million from public costs

to intragovernmental costs to ensure amounts presented Note 11 ‐ Intragovernmental Costs and Exchange are

comparable.  
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73

Required Supplementary Information
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Required Supplementary Information (Unaudited)

75

																																																																								                                                                                                  

Required Supplementary Information

Stewardship Property and Equipment

The U.S. House of Representatives (House) collection of heritage assets includes historical artwork and artifacts

that reflect the rich heritage and evolving nature of the House. The institution mirrors the changing face and

history of the nation. These ideals and trials of our history are also expressed in the heritage assets whose subject

matter includes prominent Americans and other distinguished individuals, significant moments in history, and

symbolic representations of the nation’s rich and diverse history.

The House’s Curator manages and cares for the House’s collection of works of art and artifacts under its

jurisdiction which are located throughout the U.S. Capitol complex including House office buildings and other

locations under the control of the House. Since these locations are not in a museum setting, works of art and

artifacts may be subject to damage from contact and surface deposits. However, it is the House’s goal to preserve

its heritage assets and manage the condition in accordance with the intended usage of the collection. The House

conducts periodic assessments to monitor, inspect and evaluate the condition of the heritage assets to determine

the current condition for preservation or restoration efforts. These assessments are performed in accordance with

House established practice and professional standards. General conditions are categorized as excellent, good, fair

and poor. The House has determined its heritage assets to be in good to excellent condition.  

The following tables present the general condition of the House’s heritage assets and indicate an aggregate

condition of the collection as of June 30, 2013:

Heritage Asset

Collection Description

2012 Increase Decrease 2013 General

Condition

Artwork The works of art include

oil and acrylic paintings,

works on paper, and

sculpture in bronze,

marble and other media.  

These items range from

portraits and historical

documents to statues

and other works of art.

320 3 ‐ 323 Good to

Excellent

Examples of the House’s collection of works of art include:

Oil Paintings

The House’s collection of oil paintings primarily consists of the portraits of House of Representatives’ Speakers

and Committee Chairmen. An example includes that of Speaker Henry Clay by Guiseppe Fagnani in 1852. His

portrait was the first of what became Speaker’s portraits series in the House Collection. This portrait series

became official with House Resolution 164 in 1910, which decreed that the service of every speaker be

commemorated with an oil portrait. All Speaker portraits hang in the Speaker’s Lobby and in the East and West

Chamber stairways that adjoin it.  

Acrylic Paintings

The House’s collection of acrylic paintings includes Committee portraits painted in acrylic on canvas. One such

example is the portrait of former Chairman of the Committee on Appropriations, George Mahon.
76

Required Supplementary Information (Unaudited)

																																																																								                                                                                                  

Works on Paper

The House’s collection of works on paper includes items such as an early 19th century sketch of Speaker Jonathan

Dayton.  

Sculptures

The House’s collection of sculptures includes items such as several marble busts of former Speakers of the House,

including Speakers Thomas B. Reed, Joseph G. Cannon, James Beauchamp Clark, and Nicholas Longworth.

Heritage Asset

Collection Description

2012 Increase Decrease 2013 General

Condition

Artifacts The artifacts include

items in various types of

media, including but not

limited to paper, metal,

plaster, wood, textile and

stone. These items range

from photographs and

other historical images,

literature (e.g.,

newspapers, magazines,

and handbills), and

political campaign

buttons to engravings,

furniture, and other

types of historical

artifacts.

4,636 579 26 5,189 Good to

Excellent

Examples of the House’s collection of artifacts include:

Paper

The House’s collection of paper artifacts include items such as photographs of the House of Representatives Chamber in

1937; Visitor’s Gallery passes from various Representatives from the early 1900’s; detail of a tally sheet of the February  

9, 1825 Electoral College vote from the records of the U.S. House of Representatives with the names of Andrew Jackson

of Tennessee, John Quincy Adams of Massachusetts, William H. Crawford of Georgia, and Henry Clay of Kentucky

appearing written in longhand; and Campaign Cards and other memorabilia of various Representatives dating back to

the early 1900’s.  

Metal

The House’s collection of metal artifacts includes items such as an artifact of the House Chamber, the historic inkwell

that sits on the Speakers desk when the House is in session, which dates back to the 19th century. The inkwell is known

to have been used as long ago as 1821 in the Old Hall of the House before the Members moved to the present chamber.

Plaster

The House’s collection of plaster artifacts include items such as several small 1932 busts of George Washington,

presented to Members of Congress on the bicentennial of the first president’s birth.   
Required Supplementary Information (Unaudited)

77

																																																																								                                                                                                  

Wood

The House’s collection of wood artifacts includes items such as the gavel used by Speaker Nancy Pelosi to open the

110th Congress as the first woman to serve as the House’s presiding officer; and an 1819 desk and chair from the House

Chamber.  

Textile

The House’s collection of textile artifacts includes items such as a recent House Page uniform, donated to the collection

by a former Page.

Stone  

The House’s collection of stone artifacts includes items such as a small piece of the U.S. Capitol East front stairs.
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79

Other Information
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2013

What Money is Available to Spend?

Total Resources $             1,425,159,947

Less Amount Available but Not Agreed to be Spent                   (138,724,631)

Less Amount Not Available to be Spent                       (2,157,655)

Total Amounts Agreed to be Spent $             1,284,277,661

How was the Money Spent/Issued?

Personnel Compensation & Benefits $             1,027,179,631

Contracts                    148,274,006

Other                    108,824,024

Total Amounts Agreed to be Spent $             1,284,277,661

Who did the Money go to?

Federal $                 348,082,247

Non‐Federal                    936,195,414

Total Amounts Agreed to be Spent $             1,284,277,661

U.S. HOUSE OF REPRESENTATIVES

Schedule of Spending

For the Year Ended September 30, 2013

Other Information (Unaudited)

81
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