UNITED STATES 

HOUSE OF REPRESENTATIVES

AUDIT REPORT

Audit of the Financial Statements

For the Fiscal Year Ended September 30, 2008

Report No. 10-HOC-02

March 30, 2010

Table of Contents

Executive Summary ...........................................................................................5

Independent Auditor’s Report ..........................................................................9 

Offi ce of the Chief Administrative Offi cer

Audit Report Response ........................................................................... 37

Fiscal Year 2008 Financial Statements ...........................................................45

Consolidated Statement of Financial Position ..............................................................46

Consolidated Statement of Operations .........................................................................47

Consolidated Statement of Cash Flows ........................................................................48

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

Supplemental Financial Schedules .................................................................63

Consolidating Statement of Financial Position ............................................................66

Consolidating Statement of Operations ........................................................................68

Consolidating Statement of Cash Flows .......................................................................70
4

This Page Intentionally Left Blank
5

Executive Summary
6
Executive Summary

7

 EXECUTIVE SUMMARY 

Results of Audit

During the past year, the House continued to make progress in improving its fi nancial management and

operations. For the eleventh year, the independent auditors expressed an unqualifi ed opinion on the 

House’s fi nancial statements and reported that the fi nancial statements fairly present, in all material 

respects, the fi nancial position of the House and the results of its operations and cash fl ows in conformity 

with generally accepted accounting principles. In addition, the Independent Auditors’ Report identifi ed no 

instances of noncompliance with laws and regulations. 

In their report, the independent auditor’s identifi ed three internal control weaknesses, all of which are 

reportable conditions. The reportable conditions are associated with the internal control framework for the 

payroll cycle, fi nancial reporting process and fi nancial information system. 

During fi scal year 2008, the House implemented or initiated corrective actions to address the 45 prior audit 

recommendations contained in last year’s report. Due to the House’s progress towards improving fi nancial 

related activities, we were able to close (i.e., fully implemented or otherwise resolved) 32 of the 45 prior 

recommendations. 

Recommendations

This report contains 21 recommendations consisting of 13 prior recommendations, for which corrective

actions are in varying stages of implementation, and 8 new recommendations.

Management Response

The CAO responded to the Independent Auditor’s Report on March 10, 2010. In the response, which is 

included in its’ entirety within the Management Comments section of this report, the CAO concurred with 

the reported internal control weaknesses and recommendations for corrective action. 
8

This Page Intentionally Left Blank
9

Independent Auditors’ Report
Independent Auditor’s Report

10

This Page Intentionally Left Blank
Independent Auditor’s Report

11

INDEPENDENT AUDITORS’ REPORT

To the Inspector General 

U.S. House of Representatives 

In accordance with auditing standards generally accepted (GAAS) in the United States of America and 

standards applicable to financial statement audits contained in Government Auditing Standards (GAS),

issued by the Comptroller General of the United States, we have conducted audits of Fiscal Years (FYs) 

2008 and 2007 financial statements of the U.S. House of Representatives (House) and an examination of 

the effectiveness of the House’s internal control over financial reporting for the period ended September 

30, 2008, in accordance with attestation standards established by the American Institute of Certified 

Public Accountants (AICPA), GAS, and Standards for Internal Control in the Federal Government,

issued by the Comptroller General of the United States. As a result of our audits and examinations, we 

determined that: 

x The financial statements were presented fairly, in all material respects, in conformity with U.S. 

generally accepted accounting principles. 

x The House had effective internal control over financial reporting (including safeguarding assets). 

x There were no instances of reportable noncompliance with laws and regulations that we tested. 

The following sections discuss these conclusions in more detail; our audit objectives, scope, and 

methodology; other matters related to internal control; and management comments and our evaluation. 

Details of significant deficiencies noted during the FY 2008 audit are discussed in Appendix A. 

CONCLUSIONS

Opinion on the Financial Statements 

The financial statements and accompanying notes present fairly, in all material respects, in conformity 

with U.S. generally accepted accounting principles, the Consolidated Statement of Financial Position as 

of September 30, 2008, and 2007, and the related Consolidated Statements of Operations and Cash Flows 

for the years then ended. 

Opinion on Internal Control 

The House maintained, in all material respects, effective internal control over financial reporting 

(including safeguarding assets) as of September 30, 2008, that provided reasonable assurance that 

misstatements or losses material in relation to the financial statements would be prevented or detected on 

a timely basis. Our opinion is based upon criteria contained in Standards for Internal Control in the 

Federal Government, issued by the Comptroller General of the United States. 
Independent Auditor’s Report

12

Compliance with Laws and Regulations 

Our tests of House compliance with selected provisions of law and regulations disclosed no instances of 

noncompliance that would be reportable under U.S. Generally Accepted Government Auditing Standards 

(GAGAS). The objective of our audit was not, however, to provide an opinion on overall compliance with 

laws and regulations. Accordingly, we do not express such an opinion. 

OBJECTIVES, SCOPE, AND METHODOLOGY

Management is responsible for: 

1. Preparing the financial statements in conformity with U.S. generally accepted accounting principles. 

2. Establishing, maintaining, and assessing internal control to provide reasonable assurance that the 

House maintained effective internal control over financial reporting based upon Standards for 

Internal Control in the Federal Government, issued by the Comptroller General of the United States. 

3. Complying with applicable laws and regulations. 

We are responsible for expressing an opinion on these financial statements based on our audits. We are 

required by GAAS and GAS to plan and perform our audits to obtain reasonable assurance about whether 

the consolidated financial statements are free of material misstatement. We believe that our audits provide 

a reasonable basis for our opinion. 

Further, we are responsible for expressing an opinion on the effectiveness of internal control and are 

required by AICPA attestation standards and GAS to conduct an examination, to include obtaining an 

understanding of internal control over financial reporting, testing and evaluating the design and operating 

effectiveness of internal control, and performing such other procedures as we considered necessary in the 

circumstances. We believe that our audit provides a reasonable basis for our opinion. 

As part of obtaining reasonable assurance about whether the financial statements were free of material 

misstatements, we performed tests of compliance with certain provisions of laws and regulations, 

noncompliance with which could have a direct and material effect on the determination of financial 

statement amounts. 

Finally, we performed limited procedures with respect to certain other information appearing in the 

September 30, 2008, and 2007, consolidated financial statements. 

To fulfill these responsibilities, we: 

x Examined evidence supporting amounts and disclosures in the financial statements on a test basis. 

x Assessed accounting principles used and significant estimates made by management. 

x Evaluated overall financial statement presentation. 

x Obtained an understanding of the entity and its operations, including its internal control related to 

financial reporting (including safeguarding assets) and compliance with laws and regulations 

(including execution of transactions in accordance with budget authority). 

x Tested relevant internal controls over financial reporting and compliance and evaluated design 

and operating effectiveness of internal control. 
Independent Auditor’s Report

13

x Tested compliance with selected provisions of laws and regulations specific to the House, which 

are contained in the Members’ Congressional Handbook and Committees’ Congressional 

Handbook.

We limited our internal control testing to controls over financial reporting and compliance. Because of 

inherent limitations in internal control, misstatements due to error or fraud, loss, 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 as the result of changes in conditions, or that the 

degree of compliance with controls may deteriorate. 

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

compliance to those laws and regulations required by Office of Management and Budget (OMB) audit 

guidance we deemed applicable to the financial statements for the fiscal years ended September 30, 2008, 

and 2007. We caution that noncompliance may occur and not be detected by these tests, and that such 

testing may not be sufficient for other purposes. 

For the information technology (IT) portion of the audit, we reviewed physical, logical, and management 

controls over the Chief Administrative Office (CAO) information systems that process and report 

information on the annual financial statements. We reviewed controls used to secure and safeguard 

financial information traveling over the CAO network and residing on House financial systems. Our audit 

was limited to the CAO portion of the House network (general support system) and related financial 

information systems. 

We relied upon government best practices developed by the National Institute of Standards and 

Technology (NIST) for review criteria. NIST was mandated by OMB to develop IT audit tests, standards, 

and procedures to protect sensitive information from unauthorized access or modification for the federal 

government. 

NIST guidance is accepted as industry best practice for establishing standards and procedures for securing 

information technology systems and protecting the integrity, confidentiality, reliability, and availability of 

information. NIST security guidance focus areas include cryptographic technology and applications, 

advanced authentication, public key infrastructure, internet-working security, criteria and assurance, and 

security management and support. 

Our review included an examination of internal controls over IT for the general support system and 

individual financial applications using the Federal Information System Controls Audit Manual

(FISCAM), an accepted IT audit methodology developed by GAO. We examined controls in the 

following six areas: 

x Entity-wide security program planning and management controls to provide a framework 

and continuing cycle of activity for managing risk, developing security policies, assigning 

responsibilities, and monitoring the adequacy of computer-related controls. 

x Access controls to limit or detect access to computer resources (data, program, equipment, and 

facilities), thereby protecting these resources against unauthorized modification, loss, and 

disclosure. 

x System software controls to limit and monitor access to powerful programs and sensitive files 

that control computer hardware and secure applications supported by the system. 
Independent Auditor’s Report

14

x Service continuity controls to ensure that when unexpected events occur, critical operations 

continue without interruption or are promptly resumed and critical and sensitive data are 

protected from destruction. 

x Application software development and program change controls to prevent implementation 

of unauthorized programs or modifications to existing programs. 

x Segregation-of-duty controls to provide policies, procedures, and organizational structure to 

prevent one individual from controlling key aspects of computer-related operations and thereby 

conducting unauthorized actions or gaining unauthorized access to assets or records. These 

controls must be applied within an application and at the mainframe and network system level. 

System audits are conducted on a multi-year rotational basis. Each year, we conduct a full review of one 

or more systems to ensure that all system controls are adequately assessed during the audit cycle. The FY 

2008 audit included a systems internal control review of the Member Payroll Application, FFS user 

control considerations, and review of prior-year findings and recommendations to determine if 

management had taken action to correct identified weaknesses. 

OTHER MATTERS RELATED TO INTERNAL CONTROL

In performing our examination of the effectiveness of internal control over financial reporting of the 

House as of September 30, 2008, we identified certain deficiencies in internal control that we consider 

significant deficiencies under standards established by AICPA. 

A control deficiency 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 

misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of 

control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or 

report financial data reliably in accordance with generally accepted accounting principles such that there 

is more than a remote likelihood that a misstatement of the entity’s financial statements that is more than 

inconsequential will not be prevented or detected by the entity’s internal control. 

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in 

more than a remote likelihood that a material misstatement of the financial statements will not be 

prevented or detected by the entity’s internal control. 

We identified no deficiencies in internal control that we consider to be material weaknesses, as defined 

above. We did, however, identify deficiencies in internal control that we consider to be significant 

deficiencies in internal control. We describe these deficiencies in detail in Appendix A to this report. 
Independent Auditor’s Report

15

AGENCY COMMENTS AND OUR EVALUATION

In commenting on a draft of this report, the House concurred with the facts and conclusions in our report. 

Management comments are in Appendix B. 

COTTON & COMPANY LLP 

Matthew H. Johnson, CPA, CISA 

Partner 

January 8, 2010 

Alexandria, Virginia 
Independent Auditor’s Report

16

APPENDIX A

COMMUNICATION OF SIGNIFICANT DEFICIENCIES NOTED DURING

FY 2008 FINANCIAL STATEMENT AUDIT
Independent Auditor’s Report

17

APPENDIX A

COMMUNICATION OF SIGNIFICANT DEFICIENCIES NOTED DURING 

FY 2008 FINANCIAL STATEMENT AUDIT

In performing our examination of the effectiveness of internal control over financial reporting of the 

House as of September 30, 2008, we identified certain deficiencies in internal control that we consider 

significant deficiencies under standards established by AICPA, as follows: 

1. Weaknesses in the processing and reporting of payroll data are exacerbated by deficiencies within 

the House’s control environment. 

2. Weaknesses existed in procedures used to ensure the completeness and accuracy of estimates, 

accruals, and other adjustments included in yearend financial statements. 

3. Weaknesses in the financial information system reduced the integrity of financial data and 

reporting. 

Our criteria for assessing control weaknesses are provided below along with a summary status of control 

weaknesses and detailed descriptions of these weaknesses. 

CRITERIA

In determining the status of control weaknesses, we applied the following criteria: 

New Condition Newly identified weakness. 

Open (Prior Year) The House did not fully implement recommended corrective actions, or changes 

in House operations have not remedied or eliminated the need for recommended 

corrective action. 

Closed (Prior Year) The House fully implemented recommended corrective actions, or changes in 

House operations remedied or eliminated the need for recommended corrective 

action. 

SUMMARY STATUS OF INTERNAL CONTROL WEAKNESSES

None of the internal control weaknesses we identified is a new condition. All were reported in prior audit 

reports and remain open. The following matrix provides a summary of existing internal control 

weaknesses: 

 Status as of March 13, 2009 

Weakness New Condition Open Closed

1. Weaknesses in the processing and reporting of payroll 

data are exacerbated by deficiencies within the House’s 

control environment. (Significant Deficiency)

3

2. Weaknesses existed in procedures used to ensure the 

completeness and accuracy of estimates, accruals, and 

other adjustments included in yearend financial 

statements. (Significant Deficiency)

3

3. Weaknesses in the financial information system 

reduced the integrity of financial data and reporting. 

(Significant Deficiency)

3
Independent Auditor’s Report

18

DISCUSSION OF INTERNAL CONTROL WEAKNESSES

Weakness 1: Weaknesses in the processing and reporting of payroll data are exacerbated 

by deficiencies within the House’s control environment.

Summary Status: Significant Deficiency 

 Prior Condition 

 Open 

We identified several instances in which the House’s system of internal control over payroll processing 

did not ensure accurate reporting of transactions and balances. Controls were inadequate in some cases 

and, although they existed in other cases, they were not always adhered to because of weaknesses within 

the control environment. 

We made inquiries and observed controls in place to determine if policies and procedures were 

adequately documented and implemented. We tested controls over the processing and reporting of payroll 

data, which included processing Payroll Authorization Forms (PAFs). We performed substantive tests of 

details to validate changes made in the payroll system through the pre-certification and final certification 

processes, and we performed tests of details related to the disbursement and reporting of payroll and the 

reconciliation of payroll data. 

Internal control procedures to ensure completeness and accuracy of payroll transactions included in the 

financial statements were not effective or did not exist in all cases. We identified three instances, 

discussed below, in which payroll controls did not operate in an effective manner. 

OMB Circular A-123, Management’s Responsibility for Internal Control, states: 

Management is responsible for developing and maintaining effective internal control. Effective 

internal control provides assurance that significant weaknesses in the design or operation of 

internal control, that could adversely affect the agency’s ability to meet its objectives, would be 

prevented or detected in a timely manner. 

a. Existing controls did not prevent payroll disbursement exceeding the House Speakers Pay 

Order Limit. 

One employee was overpaid by $14,016 as the result of a data entry error that established the employee’s 

hourly pay rate as $500. This amount exceeded the House Speakers Pay Order limit. A key control 

designed to detect this type of error is the monthly payroll validation process. This process requires the 

employing office to validate the pay amount before a disbursement is made, and, as discussed below, 

employing offices did not always adhere to this control. 

A second key control that should detect this type of error is the Over Speakers Pay Edit Report, which 

identifies an amount exceeding the Speakers Pay Order limit prior to payment. Although detection 

controls exist, CAO personnel must review disbursement amounts that exceed the Speakers Pay Order 

limit and take corrective actions to avoid these types of erroneous payments. 

b. The House did not properly implement procedures for ensuring completeness and accuracy 

of financial transactions. 

Amounts disbursed to Office of Personnel Management (OPM) by the House for personnel benefits on 

behalf of employees did not agree to total payroll deductions. The Office of Payroll and Benefits did not 

perform a Gross to Net Payroll Reconciliation to ensure that receipt and disbursement transactions were 
Independent Auditor’s Report

19

properly recorded in the correct accounts. Based on our FY 2008 testing of financial transactions and the 

related effectiveness of yearend reporting controls, we identified $106,562 in net payroll receipt and 

disbursement amounts not recorded in the Federal Financial System (FFS). 

c. The House did not maintain sufficient documentation to support payroll transactions. 

All PAFs were not scanned into the ImageNow system upon receipt of a change request to support bonus 

payments, terminations, and personnel elections. We could not obtain support for the following: 

x Salary adjustments for two employees 

x Leave without pay status for one employee 

x Termination for one employee 

x Thrift Savings Plan election for two employees 

x Federal Employees’ Group Life Insurance election for one employee 

Without such documentation, the House cannot ensure that employee salaries and deductions are correct. 

d. The control environment weaknesses did not ensure adherence to procedures. 

In addition to the specific weaknesses discussed above, the control environment has contributed to errors 

in the processing of transactions for payroll and related benefits, thus impeding the House’s ability to 

ensure that all employing offices adhered to controls designed to ensure accurate transactions. During the 

FY 2008 audit, we performed sample control tests on files of terminated employees, interns and 

temporary employees, and individuals who received lump-sum bonus payments. 

We identified exceptions related to late or missing PAF documentation in each control sample test 

population. We identified two instances in which a total of $13,068 was paid to terminated employees. 

Out of a sample of 47 intern and temporary employees, 42 individuals had exceeded the specified 

allowable time limit for employment. Finally, one individual received a bonus payment two months after 

it should have been paid. 

Employing offices did not always adhere to two key controls that affected payroll and related benefit 

processing.

x Employing offices did not always submit and/or process PAFs in a timely manner. If a PAF is 

submitted late or never submitted, the House payroll office will continue to process an 

individual’s payroll until an employing office submits a PAF advising the CAO’s office that the 

employee is no longer employed by the House. 

x Employing offices did not always perform payroll validations to ensure accuracy and 

completeness for payroll and related benefit payments. The validation process requires each 

employing office to validate payroll payments that CAO will make on its behalf prior to payment 

processing. Because this validation process does not always occur, payment errors are not 

identified. In the example cited above, payroll validation would have provided a mechanism for 

the employing office to identify and prevent payment to a terminated employee. 

In addition, because an established management control plan is not in place, the weaknesses discussed 

above may be undetected and uncorrected. A management control plan, such as those directed by OMB 

Circular A-123, provides a mechanism for management to identify, report, and correct control 

deficiencies in a timely manner. 
Independent Auditor’s Report

20

Recommendations 

We recommend that CAO: 

1.a. Ensure existing controls for the payroll validation and the amounts exceeding the Speaker Pay 

Order limit check are sufficient to prevent data entry errors. We also recommend that CAO 

consider implementing edit checks within the payroll system or implement other compensating 

controls to ensure that hourly rates do not result in an annual salary exceeding the Speaker Pay 

Order limit. 

1.b. Develop procedures to reconcile payroll deduction receipt and disbursement amounts on a 

monthly basis as part of payroll processing. Additionally, we recommend that CAO properly 

recognize and record payroll transactions in FFS. 

1.c. Strengthen controls of the Image Now system to support payroll transactions recorded in 

Lawson. 

1.d. In coordination with the OIG and Committee on House Administration (CHA), identify offices 

that do not comply with requirements for timely Payroll Authorization Form (PAF) submission 

or submission of payroll certification reports, provide assistance, and reinforce the need for 

compliance with these controls. 

1.e. Establish a management control program to ensure that internal controls over financial 

reporting for the House of Representatives are designed, implemented, and operating 

effectively using guidance contained in OMB Circular A-123, Appendix A. 
Independent Auditor’s Report

21

Weakness 2: Weaknesses existed in procedures used to ensure the completeness and 

accuracy of estimates, accruals, and other adjustments included in yearend 

financial statements.

Summary Status: Significant Deficiency 

 Prior Condition 

 Open 

Weaknesses in procedures used to ensure the completeness and accuracy of estimates, accruals, and other 

adjustments included in yearend financial statements adversely affected the House’s ability to initiate, 

authorize, record, process, or report financial data reliably in accordance with generally accepted 

accounting principles. 

OMB Circular A-123 states: 

Internal control over financial reporting is a process designed to provide reasonable assurance 

regarding the reliability of financial reporting. Reliability of financial reporting means that 

management can reasonably make the following assertions: 

1. All reported transactions actually occurred during the reporting period and all assets and 

liabilities exist as of the reporting date (existence and occurrence); 

2. All assets, liabilities, and transactions that should be reported have been included and no 

unauthorized transactions or balances are included (completeness); 

3. All assets are legally owned by the agency and all liabilities are legal obligations of the 

agency (rights and obligations); 

4. All assets and liabilities have been properly valued, and where applicable, all costs have 

been properly allocated (valuation); 

5. The financial report is presented in the proper form and any required disclosures are present 

(presentation and disclosure); 

6. The transactions are in compliance with applicable laws and regulations (compliance); 

7. All assets have been safeguarded against fraud and abuse; and 

8. Documentation for internal control, all transactions, and other significant events is readily 

available for examination. 

We identified weaknesses in two of the eight assertions identified above (Nos. 1 and 5). Our findings and 

associated recommendation for corrective action are below. 

We identified two specific areas that did not meet criteria in Assertion No. 1: 

a. The methodology used to identify duplicate payments was ineffective. 

The Office of Financial Solutions, Financial Counseling (FC), methodology for identifying 

duplicate payments did not allow for recognition of potential duplicate payments due to 

insufficient search criteria. The methodology used to identify duplicate payments included 

established criteria (e.g. same organization, vendor code, amount, and beginning date of service), 
Independent Auditor’s Report

22

but combined these criteria into one search. By not dividing the criteria among multiple smaller 

searches, FC was unable to identify potential duplicate payments that met some but not all of the 

criteria, such as payments with the same amount and vendor code but different invoice dates. 

b. The House did not maintain adequate inventory records of property. 

Inventory records of property items were not accurately tracked in FAIMS. We initially sampled 

45 items; of these, 18 were within the Office of the Clerk. Office of the Clerk personnel were 

unable to locate 7 of the items in a timely manner. As a result, we expanded testing and identified 

one item that the Office of the Clerk could not verify. Also, House Information Resources (HIR) 

personnel stated that an asset within FAIMS had been retired, but HIR could not provide the 

proper disposal paperwork. 

House personnel did not always follow annual physical inventory policies and procedures and did 

not ensure accurate recording and updating of records in FAIMS. Inaccurate property records 

increases the risk of misappropriation of property items. Assets that have been retired but have 

not been removed from FAIMS result in an overstatement of the financial statements and notes in 

reporting the estimated acquisition value and accumulated amortization/depreciation of assets. 

We identified one instance that did not meet criteria in Assertion No. 5: 

c. Inaccuracies in the Statement of Cash Flows 

Controls and procedures to ensure the accuracy of capital lease transactions recorded in the 

Statement of Cash Flows by the Office of Financial Solutions (OFS) were insufficient. The 

principal payment on capital lease liabilities for Asset No.284207 was misstated as $523,701, 

rather than the correct $539,701. This resulted in a $16,000 understated principal Payment on 

Capital Lease Liabilities reported on the Statement of Cash Flows. While this is an immaterial 

amount, the lack of adequate controls over the recording of lease payments could potentially 

result in a material misstatement on the Statement of Cash Flows. 

Recommendations 

We recommend that CAO: 

2.a. Revise the methodology for identifying duplicate payments to include using multiple selection 

criteria to identify potential duplicates. If the current duplicate payment software is not 

adequate, we recommend that CAO consider alternative commercial programs or develop an 

in-house program to perform the duplicate payment function. Additionally, we recommend that 

CAO develop and implement systematic preventive controls within Atlas to identify and 

prevent duplicate payments. 

2.b. Ensure that the House complies with its annual inventory procedures. We also recommend the 

CAO request Accountable Equipment and Assets (AEA), HIR, and Office of the Clerk 

receiving departments to review and strengthen policies for ensuring accurate record updates to 

FAIMS.

2.c. Require the Office of Financial Solutions to review the process of recording cash flows and 

develop appropriate policies and procedures to ensure accurate recording. 
Independent Auditor’s Report

23

Weakness 3: Weaknesses in the financial information system reduced the integrity of 

financial data and reporting.

Summary Status: Significant Deficiency 

 Prior Condition 

Open 

Although CAO made progress in addressing prior-year weaknesses, we noted that nine of 31 prior-year 

recommendations remained open. The remaining 22 prior-year weaknesses were closed when changes in 

House operations remedied the associated underlying weaknesses. The status of new and open 

recommendations is detailed in Summary of Recommendations, Weakness 4. Closed recommendations 

follow that section. 

Our audit identified four new weaknesses in two FISCAM control areas: 

x Entity-Wide Security Program Planning and Management 

x Access Controls 

Although none of the new or existing weaknesses discussed in this report by itself represents a reportable 

condition, they collectively comprise a reportable condition. 

Entity-Wide Security Program Planning and Management

We identified weaknesses related to entity-wide security program planning and management in the 

following two areas: 

x Federal Financial System (FFS) Statement on Auditing Standard (SAS) 70 and Interconnection 

Security Agreement with Department of the Interior’s National Business Center (NBC) 

x Certification and Accreditation (C&A) of General Support Systems 

a. Federal Financial System SAS 70 and Interconnection Security Agreement with NBC 

Controls are not adequate to ensure that CAO obtained assurance of the effectiveness of user controls 

protecting FFS data by conducting annual reviews of user controls documented within the SAS 70 report 

for FFS and the Interconnection Security Agreement with NBC. 

Operation and Testing of Operating Effectiveness (SAS 70) for the period July 1, 2007, through June 30, 

2008, states: 

User Control Considerations section 

The Federal Financial System (FFS) mainframe general information technology and account 

operation controls at NBC were designed with the assumption that certain controls would be 

implemented by user organizations. The application of such controls by user organizations is 

necessary to achieve certain control objectives. In order for the user organization to rely on 

internal controls reported herein (within the SAS 70 report), the user organizations must evaluate 

their own system of internal controls to determine if the following items, at a minimum are in 

place...:

Controls to provide reasonable assurance that logical access to NBC’s mainframe at client 

locations is restricted to authorized individuals. 
Independent Auditor’s Report

24

Interconnection Security Agreement (ISA) and Memorandum of Understanding (MOU) between the 

House and NBC, April 2008, Section 2.11, Audit Trail Responsibilities states:

Both Agencies are responsible for auditing activities involving the interconnection. Activities that 

will be recorded include event type, date and time of event, user identification, workstation, 

success or failure of access attempts, and security actions taken by system administrators or 

security officers. Audit trails will be retained for one year. USHR [House] will conduct annual 

reviews in conjunction with the NBC security staff. 

Further, Section 6, Software, of the above document states: 

The CISCO IOS levels will be maintained and kept current (current maintained production 

release identified by the hardware vendor). Patches will be applied for the IOS for the hardware, 

as vulnerabilities and fixes are made available and commensurate with the risk associated with 

the vulnerability. 

Finally, Section 8, Security, states: 

Interconnecting systems shall have undergone a C&A process with associated memorandums that 

designate the systems are fully accredited. 

We identified weaknesses in the following CAO user-control considerations: 

x Controls were not adequate to ensure that logical access to the NBC Mainframe was restricted to 

authorized individuals. During a review of FFS Security Application Forms for a selection of 45 

FFS users, we identified the following: 

o 7 accounts did not have approval forms. 

o 3 accounts were approved for a profile not consistent with the current assigned profile. 

o 3 accounts did not include a specific profile name on the approval form, but did include 

permission descriptions. 

o 3 accounts did not include profile documentation, but included notes to see an attachment, 

which was not provided. 

o 1 account did not include profile documentation, and no other reference was made. 

Subsequent to the end of the audit fieldwork period, management provided additional documentation and 

explanations related to the noted exceptions. We will conduct follow-up testing in this area during the FY 

2010 audit cycle. 

x Controls were not adequate to ensure that interconnecting systems have undergone a C&A 

process with associated memorandums that designate the systems as fully accredited. 

Specifically, the Procurement Desktop system (PD) has an interconnection with FSS, but it had 

not completed the C&A process and is not fully accredited. 

x Controls are not adequate to ensure that activities involved in the interconnection between the 

House and NBC were audited and audit logs were maintained and reviewed annually in 

conjunction with NBC security. We observed audit logs produced for events on the router that 

controls the connection between the House and NBC. Logs for events, such as configuration 

changes and failed login attempts, were being recorded. However, no evidence of review by 

either House or NBC management was available. 

Independent Auditor’s Report

26

Access Controls

Access controls over CAO major applications and the general support system were inadequate. 

We identified weaknesses related to access controls in the following two areas: 

x Controls over Procurement Desktop Database Configurations 

x Segregation of Member Payroll User Roles and Functions 

c. Controls over Procurement Desktop Database Configurations 

Controls are not adequate to ensure that standard security configuration baselines are implemented for the 

PD database. Specifically, CAO has not configured and audited the PD database to ensure that HISPUB 

(security checklist) requirements are met. 

HISPOL 007.0 - The United States House of Representatives Information Security Policy for the 

Information Security Compliance Program, Section 2, Policy Guidelines, states:

Compliance reviews of major and support applications and devices will be conducted at least 

once every two (2) years, or when a significant change occurs, to ensure an appropriate level of 

security is maintained. 

Security requirements and controls shall be identified and documented in the appropriate security 

compliance checklist(s).

Further, Section 3.2, Responsible House Offices and Personnel, states: 

House Offices are responsible for the overall procurement, development, integration, 

modification, operation, maintenance, and oversight of an information system. The responsible 

personnel will: Ensure the appropriate security compliance checklists are applied and 

maintained

Without adequately applied security settings, management cannot ensure that controls are adequately 

mitigating identified risks to financial transactions and data processed and stored within the Procurement 

Desktop database. 

d. Segregation of Member Payroll User Roles and Functions 

CAO did not ensure that incompatible Member payroll job functions were adequately segregated. In

addition, CAO did not develop compensating controls, such as logging and monitoring, to ensure that 

unauthorized and malicious activities performed using incompatible Member payroll functions were 

identified and investigated.

The House did not adequately identify incompatible Member payroll job functions, and it did not have 

compensating controls, such as logging and monitoring, to ensure that it could identify and investigate 

any unauthorized and malicious activities performed in Member Payroll. 

During our review of Member Payroll roles we determined that all seven Member Payroll users have 

access which would allow them the capability to make changes or alter sensitive Member Payroll data. 

Three of these users are not everyday users of the Members Payroll application. 

Due to the sensitive nature of Member Payroll data there is an increased risk that unauthorized activities 

may occur. The CAO has not developed compensating controls, such as logging and monitoring, to 
Independent Auditor’s Report

27

identify potential unauthorized user activities which could affect the confidentiality, integrity, and 

availability of sensitive Member Payroll data. 

NIST SP 800-53a, Guide for Assessing Security Controls in Federal Information Systems, June 2008, 

Section AC-5, Separation of Duties, states:

Control: The information system enforces separation of duties through assigned access 

authorizations. 

Supplemental Guidance: The organization establishes appropriate divisions of responsibility and 

separates duties as needed to eliminate conflicts of interest in the responsibilities and duties of 

individuals. There is access control software on the information system that prevents users from 

having all of the necessary authority or information access to perform fraudulent activity without 

collusion.

Section AC-6, Least Privilege, states: 

Control: The information system enforces the most restrictive set of rights/privileges or accesses 

needed by users (or processes acting on behalf of users) for the performance of specified tasks. 

Supplemental Guidance: The organization employs the concept of least privilege for specific 

duties and information systems in accordance with risk assessments as necessary to adequately 

mitigate risk to organizational operations, organizational assets, and individuals. 

Section AC-13, Supervision and Review – Access Control, states: 

Control: The organization supervises and reviews the activities of users with respect to the 

enforcement and usage of information system access controls. 

Supplemental Guidance: The organization reviews audit records (e.g., user activity logs) for 

inappropriate activities in accordance with organizational procedures. The organization 

investigates any unusual information system-related activities and periodically reviews changes 

to access authorizations. The organization reviews more frequently the activities of users with 

significant information system roles and responsibilities.

Section AU-10, Non-Repudiation, states: 

Control: The information system provides the capability to determine whether a given individual 

took a particular action. 

Supplemental Guidance: Non-repudiation protects against later false claims by an individual of 

not having taken a specific action. Non-repudiation services can be used to determine if 

information originated from an individual, or if an individual took specific actions. 

Without enforcement of least privilege, or adequate compensating controls, such as logging and 

monitoring of user activities, management cannot ensure that users are not performing unauthorized or 

malicious activities that can affect the confidentiality, availability, and integrity of sensitive Member 

Payroll data. 
Independent Auditor’s Report

28

Recommendations 

We recommend that CAO: 

3.a. Perform certification testing to ensure that NBC FFS user controls are in place and working 

effectively. This includes any controls documented within the SAS 70 user control 

considerations and the Interconnection Security Agreement with NBC. 

3.b. Complete their effort to certify and accredit (Perform HISPOL 007.0 Compliance Review), the 

primary general support system supporting CAO financial applications. 

3.c. Ensure the Procurement Desktop Oracle database is configured to meet Oracle database audit 

checklist (HISPUB) requirements. 

3.d. Update Member Payroll application user roles to enforce the rule of least privilege; or develop 

and implement compensating controls, such as logging or monitoring, to ensure users are only 

performing authorized activities. 
Independent Auditor’s Report

29

SUMMARY OF RECOMMENDATIONS

The tables below show our recommendations and management’s response to those recommendations. 

Additionally, we have attached to this report management’s response in its entirety. In general, 

management concurred with our findings and recommendations. 

Weakness 1: Weaknesses in the processing and reporting of payroll data are exacerbated by 

deficiencies within the House’s control environment. 

Recommendation Status Management Response 

1.a. 

We recommend that CAO 

ensure existing controls for the 

payroll validation and the 

amounts exceeding the Speaker 

Pay Order limit check are 

sufficient to prevent data entry 

errors. We also recommend that 

CAO consider implementing 

edit checks within the payroll 

system or implement other 

compensating controls to ensure 

that hourly rates do not result in 

an annual salary exceeding the 

Speaker Pay Order limit. 

Open CONCUR. 

The overpayment referenced by the external auditors was an isolated 

event and the CAO collected the overpayment. The overpayment was 

caused by uploading transaction batches into the payroll system which 

bypasses the warning message to the data entry personnel that the 

transaction exceeded Speaker’s Pay Order Limits. The CAO has 

discontinued this practice and has implemented a source document to 

draft payroll register validation during the pay cycle, in addition to the 

current Speaker’s Pay Order edit report. Additionally, operating 

procedures include checking overtime transactions prior to entry to 

ensure that they do not exceed Speaker’s Pay Order limits. Additional 

edits cannot be added to the payroll system without customizing the 

application source code. The cost of such customization would 

outweigh the benefits achieved as the edit would be used to detect a 

single error. The CAO has completed corrective action on this 

recommendation and requests closure. 

1.b. 

We recommend that CAO 

develop procedures to reconcile 

payroll deduction receipt and 

disbursement amounts on a 

monthly basis as part of payroll 

processing. Additionally, we 

recommend that CAO properly 

recognize and record payroll 

transactions in FFS. 

Open CONCUR. 

The Office of Payroll and Benefits (P&B) has developed procedures to 

reconcile optional life insurance, basic life insurance, health insurance, 

and flexible spending account deductions and disbursements. P&B 

also validates Federal and State tax withholding elections and FICA 

and Medicare taxable gross and deductions on the employee level. 

Accounting performs validations of Federal, FICA and Medicare 

taxable wages and withholdings for deposit and 941 reporting, State tax 

and TSP deductions and disbursements. P&B has also implemented 

additional cash balancing procedures to ensure the net pay reconciles to 

the amount disbursed through the Federal Reserve. 

1.c. 

We recommend that CAO 

strengthen controls of the Image 

Now system to support payroll 

transactions recorded in 

Lawson. 

Open CONCUR. 

The CAO has implemented additional quality assurance steps to ensure 

that payroll and benefit transactions are archived in the ImageNow. In 

July, 2009, the Payroll Operations team began auditing a random 

sample of 135 transactions each pay period to ensure that the actions 

are recorded in ImageNow. The CAO recently completed an 

automated audit between the ImageNow and Lawson systems 

validating the indexing of approximately 3.5 million documents. The 

CAO will conduct this audit on a semi-annual basis. The CAO has 

completed corrective action on this recommendation and request 

closure. 

1.d. 

We recommend that CAO, in 

coordination with the OIG and 

New CONCUR. 
Independent Auditor’s Report

30

Recommendation Status Management Response 

Committee on House 

Administration (CHA), identify 

offices that do not comply with 

requirements for timely Payroll 

Authorization Form (PAF) 

submission or submission of 

payroll certification reports, 

provide assistance, and 

reinforce the need for 

compliance with these controls. 

The CAO concurs with this recommendation and will coordinate with 

the Office of the Inspector General and the committee on House 

Administration. The CAO does not have the authority to enforce 

timely submissions of PAF’s or payroll certification reports. The CAO 

currently communicates monthly submission deadlines in each monthly 

payroll and benefits newsletter, sends notices to offices that do not 

return payroll certification reports in a timely manner, and has 

encourages adherence to deadlines. The CAO will institute a monthly 

notification to identify employing offices that do not return payroll 

certifications. 

1. e. 

We recommend that CAO 

establish a management control 

program to ensure that internal 

controls over financial reporting 

for the House of 

Representatives are designed, 

implemented, and operating 

effectively using guidance 

contained in OMB Circular A123, Appendix A. 

New CONCUR. 

 The CAO concurs with this recommendation. The CAO is actively 

recruiting for an audit and internal controls manager. Upon 

successfully filling this vacancy, the CAO plans to begin developing a 

centralized management control program. This management control 

program will be limited to only those activities which the CAO has 

policy enforcement authority. 
Independent Auditor’s Report

31

Weakness 2: Weaknesses existed in procedures used to ensure the completeness and accuracy of 

estimates, accruals, and other adjustments included in yearend financial statements. 

Recommendation Status Management Response 

2.a 

We recommend that CAO 

revise the methodology for 

identifying duplicate payments 

to include using multiple 

selection criteria to identify 

potential duplicates. If the 

current duplicate payment 

software is not adequate, we 

recommend that CAO consider 

alternative commercial 

programs or develop an inhouse program to perform the 

duplicate payment function. 

Additionally, we recommend 

that CAO develop and 

implement systematic 

preventive controls within Atlas 

to identify and prevent 

duplicate payments.

Open CONCUR. 

The CAO has already revised its methodology for identifying duplicate 

payments to include four unique selection criteria sets that use multiple 

attributes to divide the criteria into smaller search groups. As a result, 

more potential duplicates can be identified. These four criteria sets are 

applied simultaneously monthly to a single cumulative financial 

activity data base, and potential duplicates are researched and 

corrective action taken, if necessary. Currently, the CAO has 

incorporated this search into a commercial off-the-shelf program but 

will transition this capability to an in-house program in the coming 

months. In addition, the House’s new financial system, ATLAS, will 

have the capability to identify potential duplicate payments at the point 

of entry. This function will be used in addition to the monthly data 

loads documented above, thus strengthening internal controls by giving 

the House capability to identify potential duplicate payments both 

before and after payments have been processed. The CAO believes we 

have taken the appropriate action to close this recommendation. 

2.b. 

We recommend that CAO 

ensure that the House complies 

with its annual inventory 

procedures. We also 

recommend the CAO request 

Accountable Equipment and 

Assets (AEA), HIR, and Office 

of the Clerk receiving 

departments to review and 

strengthen policies for ensuring 

accurate record updates to 

FAIMS. 

New CONCUR. 

The CAO concurs with this recommendation. The Accountable 

Equipment and Assets and HIR will comply with the annual inventory 

procedures currently in effect. In addition, after reviewing specific 

weaknesses, the Accountable Equipment and Assets (AEA) and HIR 

receiving departments will review and strengthen policies for ensuring 

accurate record updating to FAIMS. The CAO has no authority over 

the receiving department for the Office of the Clerk; but will offer 

guidance for the review of their inventory and receiving policies. The 

CAO expects to complete this review by December 31, 2009 

2.c. 

We recommend that CAO 

require the Office of Financial 

Solutions to review the process 

of recording cash flows and 

develop appropriate policies 

and procedures to ensure 

accurate recording. 

New CONCUR. 

The CAO will continue to track lease payments and the associated 

reduction of the capital lease liabilities according to amortization 

schedules consistent with the terms of the lease. The Consolidated 

Statement of Cash Flows will be eliminated beginning with the Fiscal 

Year 2009 Financial Statement Compilation and subsequent years 

thereafter as the House transitions to preparing financial statements in 

compliance with Office of Management and Budget (OMB) Circular 

A-136 guidelines. Future capital lease commitments including both 

imputed interest and net capital lease liability were disclosed correctly 

in Note 8 of the Fiscal Year 2008 Financial Statements. This 

recommendation was based on an inadvertent error where annual 

principal payments on capital leases were summarized and presented 

incorrectly as a single amount on cash flow statements, and that 

amount did not match the amortization schedules; however, the 

amortization schedules were correct. Based on cash flow statements 

being eliminated in the future, the CAO believes we have taken the 

appropriate action to close this recommendation. 
Independent Auditor’s Report

32

 Weakness 3: Weaknesses in the financial information system reduced the integrity of financial 

data and reporting. 

Entity-Wide Security Program Planning and Management

Recommendation Status Management Response 

3.a. 

We recommend that CAO management perform 

certification testing to ensure that NBC FFS user 

controls are in place and working effectively. 

This includes any controls documented within 

the SAS 70 user control considerations and the 

Interconnection Security Agreement with NBC. 

New CONCUR. 

We agree that effective user controls over access to 

FFS are required under our agreement with the NBC. 

We will continue to execute the controls over user 

access that are working effectively. We will also 

review the NBC agreements to improve our 

compliance with required controls that are not effective 

or not clearly documented. 

3.b. 

We recommend that CAO management 

complete their effort to certify and accredit 

(Perform HISPOL 007.0 Compliance Review), 

the primary general support system supporting 

CAO financial applications. 

New CONCUR. 

The CAO concurs that the effort to certify and accredit 

all general support systems needs to be completed. 

The CAO is working on the certification of the House 

network and is schedule to have it completed by 

October 31, 2009. The CAO believes no further action 

is necessary on this portion of the recommendation. 

04-HOC-07, 2.02 

Develop, document, and put in place procedures 

to ensure compliance with HISPOL 003.0. 

These procedures should include risk 

assessments performed at all levels (application, 

database, and server) before new systems are 

installed and when enhancements are made to 

existing systems. In addition, this would include 

developing a schedule of risk assessments for 

existing and new financial systems and 

developing procedures to identify, implement, 

and track corrective actions designed to resolve 

weaknesses identified in the risk assessment. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

07-HOC-08, 1.01 

Develop, document, and put in place, a process 

for testing security controls identified as 

corrected, to ensure actions taken adequately 

mitigate or correct identified weaknesses. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

04-HOC-07, 2.03 

Develop procedures to ensure that systemspecific security plans are developed and 

updated as needed to reflect changes to software, 

hardware, and business operations. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

Independent Auditor’s Report

34

Service Continuity

Recommendation Status Management Response 

02-HOC-06, 4.05 

Coordinate contingency planning and recovery 

policies and procedures to ensure a 

comprehensive approach that includes the 

network, mainframe computer, FFS, PD, and 

all critical financial systems. 

 Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

Application Software Development and Program Change Control

Recommendation Status Management Response 

06-HOC-08, 1.17 

Develop, document, and implement controls 

over movement of program changes for 

Paylinks. Controls should be adequate to 

ensure that only authorized changes are moved 

into production, and management is notified. 

Open 2 The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

08-HOC-13, 3.02 

Develop, document, and implement procedures 

to ensure that users do not install any personal 

or unlicensed software, or any software 

instances in excess of current license 

agreements. This may include the use of 

automated tools or other tracking systems to 

ensure that the existence of any personal or 

unlicensed software, or any software instances 

in excess of current license agreements are 

detected, reported, acted on and corrected. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

Segregation-of-Duty Controls

Recommendation Status Management Response 

06-HOC-08, 1.20 

Develop, document, and implement policies 

and procedures to ensure that CAO financial 

systems identify incompatible duties and 

enforce segregation-of-duty controls both at the 

end user and administrative levels. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

06-HOC-08, 1.21 

Develop and implement procedures to ensure 

that segregation-of-duty principles are 

understood by key personnel, such as system 

and data owners and program managers. 

Open The CAO believes appropriate action has been taken to 

close this recommendation. This recommendation will 

be reviewed and considered for closure during the next 

audit cycle. 

2

 During our review of CAO responses to Independent Auditor's Report on Internal Control related to the House CY 

2007 Annual Financial Statement Audit, we noted that CAO still does not perform logging and monitoring to ensure 

that only authorized PayLinks changes are introduced into production. When changes are moved into production, 

management personnel are alerted only if the person moving the change notifies them. 
Independent Auditor’s Report

35

SUMMARY OF CLOSED PRIOR-YEAR FINANCIAL STATEMENT AUDIT RECOMMENDATIONS

The following prior-year recommendations were closed when changes in House operations remedied the 

associated underlying weaknesses: 

07-HOC-08, 1.1 The House properly recognized services rendered for postal services at the offsite facility 

during FY 2008.

07-HOC-08, 1.2 The quality control and review process related to the preparation of year-end financial 

statements operated effectively. Additionally, the process applied to report the accounts 

receivables related to payroll transactions were effective during FY 2008.

07-HOC-08, 1.3 The beginning balances related to Inventory Held for Resale and Capital Lease Liabilities 

general ledger accounts were accurately recorded in FFS based on the prior year ending 

balance. 

07-HOC-08, 1.4 The Accounts Payable accrual methodology developed and implemented during FY 2008 was 

appropriate and accounted for properly. 

07-HOC-08, 1.6 The proper procedures to report contingent liabilities at year end were developed and 

implemented during FY 2008. 

07-HOC-08, 1.7 Procedures for ensuring the correct amount of deferred revenue is recognized properly are 

sufficient. 

07-HOC-08, 2.1 Procedures related to the Final Payroll Certification performed between Payroll and Benefits, 

Payroll Operations and House Employing Offices were properly documented. 

07-HOC-08, 2.2 The Payroll department increased correspondence with House Employing Offices related to 

Personnel Authorization Forms (PAFs) submitted by the 15th of each month. 

07-HOC-08, 2.3 The Federal Tax Withholdings submitted through the FEDTAX program was accurately 

reported during FY 2008. 

07-HOC-08, 2.4 Payroll reconciliation procedures related to Gross to Net Payroll and the Tracking Log for 

cancelled and stop payment payroll checks were documented and/or updated appropriately. 

05-HOC-07, 2.02 Modify HISPUB 024 (pending) to require CAO SSPs to identify specific individuals as system 

and data owners. 

05-HOC-07, 2.03 Modify HISPUB 024 to include guidance on what expected behaviors should be documented 

within CAO SSPs. CAO should fully implement all requirements identified in HISPUB 024 

by updating CAO SSPs to comply with HISPUB 024. 

06-HOC-08, 1.03 Require all CAO employees and contractors who are users of the Network/Financial systems 

to read and sign expected rules of behavior. 

06-HOC-08, 1.01 Develop, document, and put in place procedures to ensure all new CAO employees and 

contractors complete security awareness training before being granted access to the network 

and financial applications. 

06-HOC-08, 1.02 Develop, document, and implement a formal certification and accreditation program to 

achieve: 

x Certification and accreditation of the general support system and all major financial 

applications. 

x Recertification every 3 years or when major changes occur. 

x Development of a SSP for the House general support system (network) to include 

requirements identified in HISPUB 024. 

x Identification of system owners and administrators including security administrators. 

05-HOC-07, 2.04 Controls are not adequate to ensure that CAO network access authorizations are: 

x Documented on standard forms and maintained on file, 

x Approved by senior managers, and 

Securely transferred to security managers 

05-HOC-07, 2.09 Document policies and procedures for granting emergency and temporary access. Monitor 

emergency and temporary access, and automatically terminate access after a predetermined 

period when possible. 

06-HOC-08, 1.07 Develop policies and procedures to ensure that standard security configuration baselines are 

developed, tested, and implemented for all CAO financial applications before placing them 

into production. When management must configure a database against industry best practice 

for functionality reasons, clearly document this in the security baseline. 
Independent Auditor’s Report

36

06-HOC-08, 1.08 Update Paylinks SSP to address logging and monitoring at the application and database levels. 

The SSP should identify what information or activities are to be logged; how long logs are to 

be retained, who has access to logs, and who should review logs. 

05-HOC-07, 2.06 Identify and document specific activities that security administrators should be logging and 

reviewing on a weekly basis such as failed logon attempts, changes to security profiles, and 

unsuccessful attempts to access unauthorized systems or data by users and outsiders. 

07-HOC-08, 1.02 Enforce FAIMS account review policies and procedures to ensure that inactive accounts are 

disabled when no longer needed. Ensure user’s access within FAIMS agrees with their 

authorized access documented on access request forms. 

07-HOC-08, 1.04 Update House incident response policies to require annual incident response training and 

conduct the annual training. 

06-HOC-08, 1.09 Ensure that security audits are performed in accordance with House Information Security 

Policy 007. 

06-HOC-08, 1.10 Develop and document standard security configuration baselines for all operating systems 

supporting CAO financial applications. Standard security configurations should be 

documented and clearly show how the operating system is intended to be configured. When 

risky or sensitive settings or processes must be used, management should clearly document 

reasons in the standard security configuration baseline. 

06-HOC-08, 1.11 Develop, document, and test emergency procedures for the Ford data center. 

Ensure that procedures include specific steps to take in the data center during an emergency 

and identify who is responsible for taking such steps. Address activities such as emergency 

shutdown of systems and responding to fires or water leaks. 

08-HOC-13, 3.01 Develop, document, and implement configuration management procedures to ensure that 

requests and related management approvals are documented and maintained for all changes 

due to Active Directory Windows service packs, hot fixes, and patches. Procedures should 

ensure that all initial requests for changes are documented, even if they are never implemented; 

that approvals are documented within requests forms to note management approval of the 

initial requests, management approval of test plans prior to testing, and management approval 

prior to implementation of the change. 

06-HOC-08, 1.12 Require that functional/ technical specification documentation submitted by the developer be 

attached or included with change request forms and other documentation supporting changes to 

Paylinks. 

06-HOC-08, 1.13 Develop procedures to ensure that test plans and results for changes are documented and 

included with other documentation supporting changes to Paylinks. 

06-HOC-08, 1.15 Develop, document, and implement controls to ensure that only authorized and approved 

changes to Paylinks are introduced into production. 

06-HOC-08, 1.16 Periodically review production program changes to ensure that access and change controls are 

being followed. 

06-HOC-08, 1.18 Develop and implement procedures to ensure that systems are developed and tested in 

accordance with House SDLC requirements and industry best practices, particularly in light of 

the forthcoming FFS replacement. 

07-HOC-08, 1.05 Identify, document, and implement controls for incompatible functions in FAIMS. Specific 

activities which should be considered include system administration, security administration, 

and system development. If management determined individuals need access within the system 

which is traditionally considered excessive or incompatible, management should identify and 

implement compensating controls to reduce the risk of unauthorized activities occurring. 
37

Offi ce of the Chief Administrative Offi cer

 Audit Report Response
Independent Auditor’s Report

38

APPENDIX B

MANAGEMENT COMMENTS
Independent Auditor’s Report

39
Independent Auditor’s Report

40
Independent Auditor’s Report

41
Independent Auditor’s Report

42
Independent Auditor’s Report

43
44

This Page Intentionally Left Blank
45

Fiscal Year 2008 Financial Statements
2008 Financial Statements

46

U.S. House of Representatives

Consolidated Statement of Financial Position

as of September 30, 2008 and September 30, 2007

2008 2007

Consolidated Consolidated

ASSETS

 Fund Balance with U.S. Treasury (Note 4) $ 169,311,592 $ 197,273,657

 Cash (Note 4) 739 1,731

 Fund Balance with U.S. Treasury and Cash 169,312,331 197,275,388

 Accounts Receivable, Net (Note 5) 513,569 582,090

 Advances and Prepayments (Note 6) 4,244,321 5,415,179

 Inventory 1,247,985 1,685,937

 Property and Equipment, Net (Note 7) 57,243,868 44,911,359

 Total Assets $ 232,562,074 $ 249,869,953

LIABILITIES AND NET POSITION

 Accounts Payable (Note 9) $ 40,071,711 $ 36,333,389

 Capital Lease Liabilities (Note 8) 6,957,008 1,103,289

 Accrued Funded Payroll and Benefi ts (Note 10) 8,841,009 7,694,679

 Accrued Workers’ Compensation (Note 10) 2,108,616 2,580,573

 Accrued Unfunded Annual Leave (Note 10) 6,131,784 5,428,091

 Deferred Credits (Note 11) 1,217,375 3,371,955

 Unfunded Workers’ Compensation

 Actuarial Liability (Note 12) 22,392,436 21,416,485

 Other Liabilities 107,493 280,944

 Total Liabilities 87,827,432 78,209,405

 Unexpended Appropriations 101,638,132 130,918,403

 Cumulative Results of Operations 43,096,510 40,742,145

 Total Net Position (Note 13) 144,734,642 171,660,548

 Total Liabilities and Net Position $ 232,562,074 $ 249,869,953
2008 Financial Statements

47

U.S. House of Representatives

Consolidated Statement of Operations

for the Years Ended September 30, 2008 and September 30, 2007

2008 2007

Consolidated Consolidated

REVENUE AND FINANCING SOURCES

 Revenue from Operations

 Sales of Goods $ 2,973,938 $ 2,647,063

 Sales of Services to Federal Agencies 4,061,714 4,604,975

 Sales of Services of the Public 927,445 924,716

 Interoffi ce Sales (Note 14) - -

 Other Revenue 991,411 600,603

 Total Revenue from Operations 8,954,508 8,777,357

 Financing Sources

 Appropriations to Cover Expenses:

 Appropriations Expended (Note 15) 1,338,630,992 1,239,261,523

 Appropriations Unexpended (Note 15) 2,679,644 1,137,887

 Imputed Financing Source (Note 16) 56,526,799 58,745,201

 Total Revenue and Financing Sources $ 1,406,791,943 $ 1,307,921,968

EXPENSES

 Personnel Compensation $ 752,712,069 $ 720,303,454

 Benefi ts (Note 16) 306,706,989 298,666,559

 Postage and Delivery 34,779,829 16,350,352

 Repairs and Maintenance 60,976,495 53,546,925

 Depreciation and Amortization (Note 7) 15,816,197 20,129,990

 Rent, Communications, and Utilities 27,396,324 27,652,162

 Telecommunications 25,262,524 28,790,797

 Supplies and Materials 16,268,886 17,538,259

 Travel and Transportation 43,542,733 35,427,049

 Contract, Consulting, and Other Services 70,676,664 56,260,737

 Printing and Reproduction 30,900,844 14,971,278

 Subscriptions and Publications 12,722,097 9,509,895

 Cost of Goods Sold 6,381,566 6,779,735

 Other Expenses 1,460,149 594,319

 Bad Debts 226,009 360,385

 Interest on Capital Leases 199,016 216,459

 Total Expenses $ 1,406,028,391 $ 1,307,098,355

 Excess (Shortage) of Revenue and 

 Financing Sources over Total Expenses $ 763,552 $ 823,613

CHANGE IN NET POSITION

 Net Position, Beginning Balance $ 171,660,548 $ 156,667,490

 Excess (Shortage) of Revenue and Financing

 Sources over Total Expenses 763,552 823,613

 Plus (Minus) Non-Operating Changes (27,689,458) 14,169,445

 Net Position, Ending Balance $ 144,734,642 $ 171,660,548
2008 Financial Statements

48

U.S. House of Representatives

Consolidated Statement of Cash Flows

for the Years Ended September 30, 2008 and September 30, 2007 

2008 2007

Consolidated Consolidated

CASH FLOWS FROM OPERATING ACTIVITIES

 Excess / (Defi ciency) of Revenue and

 Financing Sources over Expenses $ 763,552 $ 823,613 

 Adjustments affecting Cash Flow 

 Expended and Unexpended Appropriations (1,341,310,636) (1,242,212,658)

 (Increase)/Decrease in Accounts and Interoffi ce Receivable (157,488) (109,206)

 Increase/(Decrease) in Allowance for Doubtful Accounts 226,009 272,915 

 (Increase)/Decrease in Advances and Prepayments 1,170,858 (2,707,820)

 (Increase)/Decrease in Inventory 437,952 197,820 

 Increase/(Decrease) in Accounts and Interoffi ce Payable 3,738,322 4,646,776 

 Increase/(Decrease) in Other Accrued Liabilities 6,615,948 1,426,840 

 (Gain)/Loss on Disposal of Assets 460,149 594,319

 Depreciation and Amortization 15,816,197 20,129,990

 

 Net Cash Provided / (Used) by Operating Activities (1,312,239,137) (1,216,937,411)

CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of Property and Equipment (18,578,485) (16,055,046)

 Net Cash Provided / (Used) by Investing Activities (18,578,485) (16,055,046)

CASH FLOWS FROM FINANCING ACTIVITIES

 Appropriations 1,307,838,000 1,265,463,431 

 Funds Returned to the U.S. Treasury (4,247,192) (9,817,745)

 Principal Payment on Capital Lease Liabilities (736,243) (84,963)

 Net Cash Provided / (Used) by Financing Activities 1,302,854,565 1,255,560,723 

 Net Cash Provided / (Used) by Operating, Investing, 

 and Financing Activities (27,963,057) 22,568,266 

 Fund Balance with U.S. Treasury and Cash, Beginning 197,275,388 174,707,122 

 Fund Balance with U.S. Treasury and Cash, Ending $ 169,312,331 $ 197,275,388 
49

Notes to the Financial Statements
Notes to the Financial Statements

50

NOTE 1 - 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 offi ce, 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 appoints unelected offi cers to 

administer both legislative and non-legislative functions, 

which support the institution and its Members in carrying 

out its legislative duties. The consolidated comparative 

fi nancial statements of the House provide fi nancial 

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 fi nancial statements refl ect the organizational structure 

of the House under the 110th Congress. The following is a 

summary of the entity groupings as they appear in the fi scal 

year 2008 consolidating fi nancial statements:

House Members are elected from congressional districts of 

approximately equal population. The fi nancial information 

aggregates transactions of the Member districts and 

Washington, D.C. offi ces, and includes 435 Representatives; 

four Delegates, one each, from the District of Columbia, 

Guam, Virgin Islands, and American Samoa; and one 

Resident Commissioner from Puerto Rico. 

The Committees fi nancial information aggregates 

transactions of the Standing and Special and Select 

Committees of the 110th 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 110th

Congress are:

Committee on Agriculture

Committee on Appropriations

Committee on Armed Services

Committee on the Budget

Committee on Education and Labor

Committee on Energy and Commerce

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 and Technology

Committee on Small Business

Committee on Standards of Offi cial Conduct

Committee on Transportation and Infrastructure

Committee on Veterans’ Affairs

Committee on Ways and Means

Permanent Select Committee on Intelligence

Select Committee on Energy Independence and 

Global Warming

Select Committee on Voting Irregularities

The House Leadership Offi ces fi nancial 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 Offi cers and Legislative Offi ces fi nancial information 

aggregates transactions of all legislative support and 

administrative functions provided to Members, Committees, 

and Leadership offi ces, including:

Chaplain

Chief Administrative Offi cer

Offi ce of Emergency Planning, Preparedness and 

Operations

Clerk of the House

Offi ce of Congressional Ethics

Offi ce of the General Counsel

Offi ce of Inspector General

Offi ce of the Historian

Offi ce of the Law Revision Counsel

Offi ce of the Legislative Counsel

Parliamentarian

Sergeant at Arms

The Joint Functions fi nancial information aggregates 

transactions of the joint activities of the House and the 

Senate to the extent that the House funds these functions in 
Notes to the Financial Statements

51

whole or in part. House administrative management does not 

exert direct control over the expenditures of these functions. 

The joint functions in these statements include:

Attending Physician

Joint Committee on Taxation, which has members 

from both the House and the Senate

 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Consolidation

The fi nancial statements include the accounts and 

signifi cant activities of the House. The consolidated 

fi nancial statements do not include legislative agencies that 

support the House and that receive separate appropriations. 

These agencies are:

Library of Congress

Congressional Budget Offi ce

Government Accountability Offi ce

Government Printing Offi ce

U.S. Botanic Garden

Architect of the Capitol

U.S. Capitol Police

Functions jointly shared between the House and the Senate 

are included in the consolidating fi nancial statements to the 

extent their operations are funded by House appropriations. 

These consist of :

Attending Physician

Joint Committee on Taxation, which has 

members from both the House and the Senate

All signifi cant interoffi ce balances and transactions 

have been eliminated to arrive at consolidated fi nancial 

information.

B. Basis of Accounting

The House, in accordance with generally accepted 

accounting principles, utilizes the accrual basis of 

accounting, which provides for the recognition of events 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 accrual basis of accounting 

contributes signifi cantly to the development of accurate 

cost information needed to report the fi nancial position and 

results of operations.

C. Fund Balance with the U.S. Treasury and 

Cash

Funds available to the House to pay current liabilities 

and fi nance authorized purchases are held with the U.S. 

Treasury.

• Fund Balance with the U.S. Treasury includes 

House accounts, as well as 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.

• For purposes of the Consolidated Statement of 

Cash Flows, funds held with the U.S. Treasury 

are considered cash.

D. Accounts Receivable

Accounts receivable consists of money owed the House 

by Federal agencies, Members, employees and/or vendors 

less an Allowance for Doubtful Accounts.

E. Advances and Prepayments

Advances consist of payments to Federal government 

entities for contractual services and for mailings that 

require address corrections or additional postage. 

Prepayments primarily consist of prepaid subscriptions 

for publications and data communication services. 

F. Inventory

The Offi ce Supply Service & Gift Shop maintain an 

inventory of goods for sale. These entities are included 

with Offi cers and Legislative Offi ces in the consolidating 

fi nancial statements. Inventories for sale are valued at the 

moving weighted average method.

Furnishings, also included with Offi cers and Legislative 

Offi ces, maintains inventories of such items as hardwood, 

carpet, leather, fabric, furniture components, and repair

Eliminations on the consolidating fi nancial statements are 

used to negate the effect of fi nancial transactions between 

House entities. Consolidated House fi nancial information 

would be misleading if inter-entity transactions were not 

eliminated.
Notes to the Financial Statements

52

materials. These items are not for sale and are refl ected in 

the fi nancial statements at an estimated value based on the 

fi rst in/fi rst out inventory valuation method. 

G. Property and Equipment

Property and equipment including computer purchases 

are capitalized if the unit acquisition cost is equal to or 

greater than $25,000 and the item has a useful life greater 

than one year. Software is capitalized if the unit acquisition 

cost is equal to or greater than $10,000 and the item has a 

useful life greater than one year. The costs of such items 

are recognized as assets when acquired. An appropriate 

portion of an asset’s value is reduced and an expense 

recognized over the accounting periods benefi ted by the 

asset’s use. See Note 7, Property and Equipment, for 

additional information on property and equipment held by 

the House.

The House has possession of numerous assets that may 

be of signifi cant historical and artistic value. The House 

does not include these assets in the fi nancial statements. 

The land and buildings occupied and used by Members, 

offi cers, and employees in Washington, D.C. are under the 

custody of the Architect of the Capitol and are not included 

in the fi nancial statements of the House.

H. Leases

The House leases offi ce space, vehicles, computers and 

other equipment. These leases are generally classifi ed as 

operating leases. House regulations require that leases 

entered into by Members for space and vehicles be no 

longer than the elected term of the Member. The House 

also enters into leases, which are structured such that their 

terms effectively fi nance the purchase of the item. Such 

leases convey the benefi ts and risks of ownership and 

are classifi ed as capital leases, if the net present 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 net present value 

of the minimum lease payments at lease inception. The 

portion of capital lease payments representing imputed 

interest is expensed as interest on capital leases. See Note 

8, Lease Commitments, for additional lease information.

I. Deferred Credits

The House receives advance payments from other Federal 

government entities for shared services, in advance of the 

delivery of these services. These advance payments are 

recorded as deferred credits. As the services are rendered the 

deferred credit account is drawn down and the appropriate 

revenue is recognized. 

J. Revenue from Operations

Revenue is recognized when goods have been delivered or 

services rendered.

• Sales of goods to the public consist of Offi ce Supply 

Service and Gift Shop sales.

• Sales of services to the public are comprised of 

Photography sales, Child Care fees, Postal fees and 

Attending Physician fees.

• Interoffi ce sales between House entities consist 

of graphic services, telecommunications, office 

supplies, framing, recording, office equipment, 

photography, tape duplication, and are eliminated 

on the consolidating fi nancial statements.

• Other revenue consists of Page School room and 

board, and vendor commissions. 

K. Appropriations to Cover Expenses

Like other Federal government organizations, the House 

fi nances most of its operations with appropriations. The 

expenses of Members, Committees, and Leadership offi ces 

are entirely fi nanced with appropriations. Other House entities 

require appropriations to the extent the revenue generated 

does not cover expenses. Appropriations are considered a 

fi nancing source, not a revenue, since appropriations do not 

result from an earnings process. 

L. Postage and Delivery

Postage and delivery consists of franked mail expenses 

and miscellaneous postage expenses. Members’ postage 

includes the use of the Frank, which is charged to the 

Members’ Representational Allowance. Miscellaneous 

postage expenses include courier charges, stamps, and rental 

of post offi ce boxes.

M. Repairs and Maintenance

Repairs and maintenance include all expenses related to 

the maintenance and upkeep of House equipment in both 

Washington, D.C. and in Members’ district offi ces, as well 

as the expense for operating leases on various types of 

equipment. In addition, property and equipment purchases 

below the capitalization thresholds discussed in Note 2G, 

Property and Equipment, are classifi ed as repairs and 

maintenance.

N. Depreciation and Amortization

The cost of capital assets is allocated ratably over an asset’s 

useful life as depreciation or amortization expense. 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 
Notes to the Financial Statements

53

assets such as furniture, equipment, 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. 

O. Rent, Communications, and Utilities

Rent and utilities consist primarily of the rental of district 

offi ces by Members and any related utility payments. 

Communications costs consist of charges for news wire 

services, satellite fees, and external network access 

services.

P. Telecommunications

Telecommunications expense includes local and long 

distance telephone service in Washington, D.C. and in 

Members’ district offi ces.

Q. Supplies and Materials

Supplies and materials include offi ce supplies used by 

the House and medical supplies used by the Attending 

Physician. Supplies and materials do not include inventories 

held for sale by retail entities such as the Offi ce Supply 

Service and Gift Shop.

R. Travel and Transportation

Travel and transportation expenses include offi cial travel 

by Members, Committees, and Leadership offi ces; travel 

by other House offi cers and employees and congressional 

delegations; freight and shipping costs; and expenses 

related to the lease and maintenance of vehicles.

S. Contract, Consulting, and Other Services

Contract, consulting, and other services include the cost 

of management services in House Postal Operations, 

annual audit fees, the cost of studies and analyses, as well 

as computer, janitorial, catering, and audio and video 

services.

T. Printing and Reproduction

This category primarily includes printing and reproduction 

of constituent communications. Also included are 

photography services, and printing and reproduction of 

items such as informational publications and reference 

materials.

U. Subscriptions and Publications

Subscriptions and publications include the cost of 

periodicals and online news services.

V. Cost of Goods Sold

Cost of goods sold includes the cost of products sold in 

the retail operations of the Offi ce Supply Service and Gift 

Shop, and the cost of services provided to federal and nonfederal entities, such as the House postal facility.

W. Loss or Gain on Disposal of Assets

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.

X. Annual Leave

Annual leave for the House Offi cers and their employees 

is accrued as earned, and the liability is reduced as leave is 

taken. The accrued annual leave balance as of September 

30, 2008 is calculated according to Public Law 104-53, 

November 19, 1995, Sec. 109 Stat. 522. See Note 10, 

Accrued Payroll and Benefi ts and Leave, for additional 

information.

Y. Federal Employee and Veterans Benefi ts

This benefi t expense includes the current cost of providing 

future pension benefi ts to eligible employees at the time 

the employees’ services are rendered. Also included is the 

current period expense for the future cost of providing 

post-retirement health benefi ts and life insurance to 

House employees. See Note 16, Benefi ts, for additional 

information.

Z. Use of Estimates

The preparation of fi nancial 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 fi nancial 

statements, and the amount of revenue and expense 

reported during the period. Actual results could differ from 

those estimates.
Notes to the Financial Statements

54

NOTE 3 - INTRA-GOVERNMENTAL FINANCIAL ACTIVITIES

The House has signifi cant intra-governmental fi nancial 

activities with Executive and Legislative Branch entities. 

These fi nancial activities include transactions and agreements 

to purchase goods and services.

Transactions with Executive Branch Agencies

The House’s most signifi cant interagency transactions are 

with the:

• U.S. Postal Service for postage,

• General Services Administration for the use and 

upkeep of offi ce space in certain Members’ district 

offi ces, offi ce supplies and leased vehicles,

• U.S. Department of Labor for unemployment and 

workers’ compensation,

• U.S. Department of Education for the student loan 

program,

• U.S. Department of Transportation for transit benefi ts 

program, 

• Department of Defense for contractual and maintenance 

services,

• U.S. Department of Energy for contractual services,

• U.S. Department of Homeland Security for security 

services,

• U.S. Department of the Interior, U.S. Geological 

Survey, National Business Center for fi nancial system 

contract and consulting services, and

• Other Executive Branch agencies for special studies 

as requested by House.

Signifi cant cash disbursements to Executive Branch agencies 

during the fi scal years ended September 30, 2008 and 2007 

were approximately: 

Disbursements to Executive Branch 

Agencies 2008 2007

U.S. Postal Service $ 34,105,000 $ 16,039,000 

General Services Administration 4,261,000 4,696,000 

U.S. Department of Labor 2,899,000 3,903,000 

U.S. Department of Education 2,459,000 2,374,000 

U.S. Department of Transportation 2,242,000 2,076,000 

Department of Defense 2,142,000 1,870,000 

U.S. Department of Energy 710,000 338,000 

U.S. Department of Homeland Security 429,000 177,000 

U.S. Department of the Interior 428,000 524,000 

Other Executive Branch Agencies 232,000 49,000 

The House also reports signifi cant fi nancial transactions 

with the U.S. Department of State, which maintains and 

administers the Congressional Use of Foreign Currency 

account on behalf of Congress. This account, which was 

established in 1948 and made permanent in 1981, is 

authorized by legislation codifi ed 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. The 

fund balance related to the account is included in Fund 

Balance with U.S. Treasury under Offi cers and Legislative 

Offi ces.

Use of the foreign currency account for Congressional 

delegations and other offi cial 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. Therefore, all foreign currency account 

fi nancial activity is reported as Committee and Leadership 

offi ce travel expense.

Foreign Currency Balance with 

the U.S. Department of State 2008 2007

Beginning Balance $ 33,461,569 $ 26,918,332 

Appropriation Received 18,000,000 15,000,000 

Travel Expenses:

 Leadership (2,094,205) (2,061,610)

 Committees (10,636,855) (6,395,153)

Ending Balance $ 38,730,509 $ 33,461,569 

Transactions with Legislative Branch Agencies 

The House pays for support services provided by other 

Legislative Branch entities. These entities receive their 

own appropriations and operate autonomously from the 

House’s administrative functions. The House received 

support services from the United States Senate in 2008. The 

House also receives support services from the Government 

Printing Offi ce, Government Accountability Offi ce, and the 

Architect of the Capitol. 

Disbursements to Legislative 

Branch Entities 2008 2007

United States Senate $ 1,168,000 $ 988,000 

Government Printing Offi ce 613,000 29,000 

Government Accountability Offi ce 246,000 187,000 

Architect of the Capitol 234,000 330,000 
Notes to the Financial Statements

55

NOTE 4 - FUND BALANCE WITH THE U.S. TREASURY AND CASH

The House has appropriated and revolving fund balances 

with the U.S. Treasury. The balances, as of September 30, 

2008 and 2007 were:

NOTE 5 - ACCOUNTS RECEIVABLE

NOTE 6 - 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. As the 

goods and/or services are rendered, the Advance account 

is drawn down and the appropriate asset or expense is 

recognized. Prepayments are made for subscriptions and 

software licenses and are charged as expenses. At yearend, all such payments made for the previous, current and 

succeeding years are analyzed to determine the proper 

expense and prepayment amounts applicable to the current 

accounting period for fi nancial statement purposes. 

Advances and Prepayments are: 

Accounts Receivable balances represent amounts owed 

the House by Federal agencies, Members, employees 

and/or vendors less an allowance for doubtful accounts. 

The Allowance for Doubtful Accounts was derived from 

the receivables amount owed to the House for more 

than six months. The House is actively pursuing these 

overpayments.

The House usually receives the full amount of its 

appropriation at the beginning of each fi scal year. 

Cash on Hand represents deposits in transit and amounts 

held in a commercial bank account. Cash on Hand was 

$739 and $1,731 as of September 30, 2008 and 2007, 

respectively.

Fund/Cash Accounts 

Maintained by the House 2008 2007

Fund Balance with Treasury/Cash $ 130,581,822 $ 163,813,819 

Congressional Use of Foreign 

Currency 38,730,509 33,461,569 

 Total $ 169,312,331 $ 197,275,388 

The House also receives payments for services provided to 

the Congressional Budget Offi ce and the Architect of the 

Capitol and for the reimbursement of services shared with 

other Federal government entities. In 2008, the House shared 

services with the Library of Congress. In 2007, the House 

shared services with the Library of Congress and the U.S. 

Senate. Cash receipts decreased due to the U.S. Senate opting 

out of utilizing the off-site House Postal Facility in 2008.

Accounts Receivable 2008 2007

Accounts Receivable $ 1,633,794 $ 1,476,306 

Less: Allowance for Doubtful 

Accounts (1,120,225) (894,216)

Accounts Receivable, Net $ 513,569 $ 582,090 

Advances and Prepayments 2008 2007

Advances $ - $ 81,291 

Prepayments 4,244,321 5,333,888 

 Total $ 4,244,321 $ 5,415,179 

Cash Receipts from Legislative 

Branch Entities 2008 2007

Library of Congress $ 4,146,000 $ 4,388,000 

United States Senate - 468,000 

Architect of the Capitol 261,000 250,000 

Congressional Budget Offi ce 78,000 70,000 
Notes to the Financial Statements

56

NOTE 7 – PROPERTY AND EQUIPMENT

Software is capitalized if its acquisition cost equals or 

exceeds $10,000. Also, vehicles and equipment, including 

computers, are capitalized if their acquisition cost 

equals or exceeds $25,000. Work in process consists of 

capitalized costs associated with assets received, but not 

placed in service as of the fi scal year end. Depreciation 

and amortization expense is based on the straight-line 

method over an asset’s estimated useful life. The change 

in work in process is due to several projects not placed in 

service during the fi scal year. Property and equipment as 

of September 30, 2008 and the related depreciation and 

amortization expense are:

Property and equipment as of September 30, 2007 and the related depreciation and amortization expense are:

2008 

Classes of Property and Equipment

Service 

Life 

(Years)

Estimated 

Acquisition Value

Accumulated 

Amortization/

Depreciation

Estimated Net 

Book Value

Amortization/

Depreciation

 Expense

Work in Process N/A $ 26,319,495 $ - $ 26,319,495 $ - 

Computer Software and Hardware 3 76,913,883 70,629,883 6,284,000 7,520,300 

Assets Under Capital Lease 3 4,107,369 114,094 3,993,275 114,094 

Computer Software and Hardware 5 790,911 790,911 - - 

Equipment 5 47,016,876 34,811,234 12,205,642 5,230,870 

Motor Vehicles 5 10,524,770 7,113,465 3,411,305 1,888,556 

Furnishings and Other Equipment 10 1,686,189 1,538,100 148,089 18,392 

Assets Under Capital Lease 10 1,354,473 643,375 711,098 135,447 

Leasehold Improvements 10 9,085,375 4,914,411 4,170,964 908,538 

 Total $ 177,799,341 $ 120,555,473 $ 57,243,868 $ 15,816,197 

2007

Classes of Property and Equipment

Service 

Life 

(Years)

Estimated 

Acquisition Value

Accumulated 

Amortization/

Depreciation

Estimated Net 

Book Value

Amortization/

Depreciation 

Expense

Work in Process N/A $ 10,312,531 $ - $ 10,312,531 $ - 

Computer Software and Hardware 3 83,979,429 74,103,583 9,875,846 11,534,626 

Computer Software and Hardware 5 790,911 790,911 - - 

Equipment 5 43,511,046 30,228,415 13,282,631 5,470,531 

Motor Vehicles 5 10,499,782 5,151,960 5,347,822 2,064,928 

Furnishings and Other Equipment 10 1,808,757 1,642,276 166,481 23,070 

Assets Under Capital Lease 10 1,354,473 507,926 846,547 135,447 

Leasehold Improvements 10 9,085,375 4,005,874 5,079,501 901,388 

 Total $ 161,342,304 $ 116,430,945 $ 44,911,359 $ 20,129,990 
Notes to the Financial Statements

57

NOTE 8 – LEASE COMMITMENTS

Capital Leases

The House enters into leases, which are structured 

such that their terms effectively fi nance the purchase of 

the item. Such leases convey the benefi ts and risks of 

ownership and are classifi ed as capital leases, if the net 

present value of the future 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 net present value of the future minimum lease 

payments due at lease inception. Assets under capital 

lease consist of building structures and hardware. 

Future Capital Lease Payments Due as of 

September 30, 2008:

Year

2009 $ 1,818,187 

2010 1,848,474 

2011 1,848,474 

2012 1,848,474 

2013 951,317 

Thereafter 75,357 

Total Future Capital Lease Payments $ 8,390,283 

Less: Imputed Interest (1,433,275)

Net Capital Lease Liabilities $ 6,957,008 

Unfunded Liability $ 6,957,008 

Operating Leases

The House enters into various operating leases for 

temporary usage of offi ce space, vehicles, hardware, 

and software. Leases that convey the benefi ts and risks 

Accounts Payable balances represent amounts owed for 

the cost of goods and services received but not yet paid. 

Accounts Payable also includes amounts owed to DOL 

for unemployment compensation.

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 offi ce space in their districts through GSA or may 

directly lease space from the private sector. The Members’ 

Congressional Handbook states that a Member cannot enter 

into a lease for offi ce space beyond his/her elected term. 

Members and offi cers also enter into leases to rent vehicles 

for offi cial 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. House administration also leases 

hardware and software. 

Future Operating Lease Payments Due as of September 

30, 2008:

Year Vehicles Offi ce Space Parking Total

2009 $ 433,559 $ 6,198,678 $ 30,530 $ 6,662,767 

2010 132,207 - - 132,207 

Total $ 565,766 $ 6,198,678 $ 30,530 $ 6,794,974 

Lease expense for offi ce space was $24,384,031 and 

$23,508,273 for the years ended September 30, 2008 

and 2007, respectively. Lease expense for vehicles was 

$1,398,019 and $1,752,992 for the years ended September 

30, 2008 and 2007, respectively.

Accounts Payable 2008 2007

Vendor Payables $ 39,895,011 $ 35,977,983 

Unemployment Compensation 176,700 355,406 

 Total $ 40,071,711 $ 36,333,389 

NOTE 9 - ACCOUNTS PAYABLE
Notes to the Financial Statements

58

NOTE 10 - ACCRUED PAYROLL AND BENEFITS AND LEAVE

The House has both funded and unfunded payroll, 

benefi ts and leave. 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 fi scal year for which an 

appropriation has not yet been received.

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). Sick and other types of 

paid leave are expensed as they are taken. Accrued payroll 

and benefi ts include salaries and associated benefi ts earned in 

the current fi scal year and paid in the subsequent fi scal year.

The Members’ and Committees’ Congressional Handbooks 

allow offi ces to adopt personnel policies that provide for the 

accrual of annual leave and use of such leave. Leadership 

offi ces 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, and 

Leadership offi ces is estimated on the fi nancial statements. 

In 2008, the estimate was based on a three-year average of 

actual annual leave paid. Accrued Workers’ Compensation 

is the amount billed by Department of Labor that will be 

paid in subsequent fi scal years. In 2008, there was a change 

in accounting practice. Accrued Workers’ Compensation 

was changed from an unfunded to a funded liability. 

Accrued annual leave and accrued payroll and benefi ts as 

of September 30, 2008 and 2007 were:

NOTE 12 - UNFUNDED WORKERS’ COMPENSATION ACTUARIAL LIABILITY

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 benefi ciaries of employees whose death is attributable 

to a job-related injury or occupational disease. Claims 

incurred for the benefi t of House employees under FECA 

are administered by DOL, which pays the initial claim 

and obtains reimbursement from the House. The unfunded 

workers’ compensation actuarial liability is 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 benefi ts expense. The House calculated the actuarial 

liability based on a model developed by DOL. The projected 

Unfunded Workers’ Compensation Actuarial Liabilities as 

of September 30, 2008 and 2007 were $22,392,436 and 

$21,416,485, respectively. 

NOTE 11 - DEFERRED CREDITS

In 2008, the House received payments in advance of receipt 

of shared services from the Library of Congress. In 2007, 

the House received payments in advance of receipt of shared 

services from the Library of Congress, the U.S. Senate, the 

Department of Defense and the Department of State. The 

deferred credit balance as of September 30, 2008 and 2007 

was $1,217,375 and $3,371,955, respectively. 

Accrued Leave, Payroll and

Benefi ts, and Workers' 

Compensation

2008 2007

Funded

Accrued Payroll and Benefi ts $ 8,841,009 $ 7,694,679 

Accrued Workers' 

Compensation

 2,108,616 - 

Total Funded $ 10,949,625 $ 7,694,679 

Unfunded

Accrued Annual Leave 6,131,784 5,428,091 

Accrued Workers' Compensation - 2,580,573 

Total Unfunded $ 6,131,784 $ 8,008,664 
Notes to the Financial Statements

59

NOTE 13 - NET POSITION

The components of Net Position are:

• Unexpended Appropriations - Appropriations are 

not considered expended until goods have been 

received or services have been rendered. 

• Total Cumulative Results of Operations:

Cumulative Results of Operations - The net 

difference between expenses and revenue and 

fi nancing sources including appropriations, 

revenues from operations and imputed fi nancing 

sources.

Invested Capital - Funds used to fi nance capital 

assets such as computer hardware and software, 

vehicles, equipment, and inventory.

Future Funding Requirements - Known liabilities 

to be funded by future appropriations for accrued 

Annual Leave and Workers’ Compensation.

Unexpended appropriations cancel at the end of the second 

fi scal year following the year in which appropriated. As 

required by law, these funds must be returned to the U.S. 

Treasury general account. Funds that were canceled and 

returned to the U.S. Treasury during fi scal years 2008 and 

2007 are:

Net Position as of September 30, 2008 and 2007 for Appropriated Funds and Revolving Funds, including the House 

Recording Studio, Net Expenses of Equipment, Page School, House Services, Net Expenses of Telecommunications, 

and Offi ce Supply Service revolving funds are shown in the following table:

Appropriations 2008 2007

2006 $ 4,247,192 $ - 

2005 - 9,817,745 

 Total $ 4,247,192 $ 9,817,745 

Net Position 

 Net Position 

September 30, 2008 

Totals 

 Net Position 

September 30, 2007 

Totals 

Unexpended Appropriations $ 101,638,132 $ 130,918,403 

Cumulative Results of Operations:

 Cumulative Results of Operations $ 20,085,883 $ 24,673,286 

 Invested Capital 51,534,846 45,494,008 

 Future Funding Requirements (28,524,219) (29,425,149)

 Total Cumulative Results of Operations 43,096,510 40,742,145 

Total Net Position $ 144,734,642 $ 171,660,548 

Changes in net position may include prior period 

adjustments, excesses or shortages of revenue and 

fi nancing sources over expenses, and non-operating 

changes, such as investments in capital assets and 

inventory. Increases (or decreases) in non-operating 

changes result when amounts invested in capital assets 

and inventory exceed (or are less than) the amounts of 

liabilities to be funded by future appropriations. 

The Net Position table above refl ects an additional cumulative 

results of operations line which further disaggregates activity 

other than invested capital or future funding requirements.
Notes to the Financial Statements

60

NOTE 14 - REVOLVING FUNDS, INTEROFFICE SALES, AND TRANSFERS 

Some House entities transfer costs to Members, Committees, 

and other House offi ces for goods and services provided. 

These entities are primarily: 

• Customer Solutions, which transfers costs of 

equipment and services for recording, photography 

and graphics to the Members and Committees, 

• House Information Resources, which transfers 

telecommunication charges, and 

• Office Supply Service and Gift Shop, which 

transfers offi ce supply purchases and fl ag sales. 

Some House business-like entities operate as revolving 

funds. A revolving fund is a budgetary structure established 

by statute that authorizes certain government agencies to 

collect user fees or revenue to fi nance operating expenses. 

In 2008, the House operated revolving fund type activities 

for the House Recording Studio, Page School, Offi ce 

Supply Service and Gift Shop, Child Care Center, and 

House Services.

NOTE 15 - APPROPRIATIONS TO COVER EXPENSES

Appropriations Expended include current and prior year 

funds necessary to fi nance House operating expenses such 

as personnel and benefi ts costs, contract services, and 

travel expenses. The House recognizes appropriations to 

cover expenses in the same period in which the associated 

expense is incurred. Appropriations to cover investments 

in capital assets and inventory are recognized in the same 

period in which they are received.

Appropriations Unexpended consist of expenses that are 

incurred in the current period, but will be funded by future 

appropriations. Such amounts include accrued actuarial 

liabilities and annual leave.

NOTE 16 - BENEFITS

House Members and employees are covered by either the 

Civil Service Retirement System (CSRS) or the Federal 

Employees Retirement System (FERS). Both Members 

and employees are eligible for retirement benefi ts under 

CSRS or FERS. A CSRS basic annuity, unreduced for age, 

debts to the fund, or survivor’s benefi ts, 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’ benefi ts are different 

from those of employees. For example, a Member covered 

by CSRS is eligible to receive unreduced retirement benefi ts 

at age 60 if he or she has 10 years of Member service. An 

employee is eligible to receive reduced benefi ts at age 

50 with 20 years of service or at any age with 25 years 

of service. The FERS basic benefi t plan provides the same 

benefi ts 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 employees, in 

addition to paying Social Security, contribute a portion of 

their base earnings to the FERS retirement fund. The House 

also contributes an amount toward the FERS retirement and 

Social Security funds. 

Both FERS and CSRS employees can contribute to the 

Thrift Savings Plan (TSP) up to the IRS limit. FERS 

employees also receive an automatic one percent Housepaid contribution, as well as an additional House matching 

TSP contribution up to fi ve percent of their basic pay. CSRS 

employee contributions to TSP do not receive matching 

House contributions. FERS employees could receive 

benefi ts from FERS, the Social Security System, and TSP. 

CSRS employees could receive benefi ts from CSRS and 

TSP.
Notes to the Financial Statements

61

Benefi ts costs for the past 3 years have averaged 

approximately $300 million per year. 

Federal-employing entities recognize their share of the cost 

of providing future pension benefi ts to eligible employees 

at the time the employees’ services are rendered. This cost 

is included in Federal Employee and Veterans’ Benefi ts 

expense. The pension expense recognized in the Statement of 

Operations 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 Offi ce 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 fi nanced directly through the Civil Service 

Retirement and Disability Fund administered by OPM. 

The House does not receive an appropriation to fund this 

expense. Therefore, this portion of the pension expense 

is considered an imputed fi nancing source to the House, 

and is included in the Imputed Financing Sources on the 

Statement of Operations. This amount was $11,086,203 in 

2008 and $11,226,160 in 2007. 

Federal-employing entities also recognize a current period 

expense for the future cost of post-retirement health benefi ts 

and life insurance for its employees while they are still 

employed. This cost is included in Federal Employee and 

Veterans’ Benefi ts expense in the Statement of Operations. 

Employees and the House do not currently make 

contributions to fund these future benefi ts, and the House 

does not receive an appropriation to fund this expense. 

Therefore, this portion of the post-retirement health benefi ts 

and life insurance is considered an imputed fi nancing 

source to the House, and is included in Imputed Financing 

Sources on the Statement of Operations. This amount was 

$45,440,596 in 2008 and $47,519,041 in 2007.

NOTE 17 - 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 $21 million and $16 million were expended 

in 2008 and 2007, respectively.

NOTE 18 - CONTINGENCIES

The House is not currently involved in any lawsuit where 

the outcome is probable and the amount can be estimated. 

During fi scal year 2008, the House settled a lawsuit from a 

Member and Employee Benefi ts 2008 2007

Retirement Plan Contributions $ 138,255,671 $ 134,238,538 

Federal Employee and Veterans' 

Benefi ts

 56,526,799 58,745,201 

Social Security 50,160,528 47,562,097 

Health Insurance 43,888,901 42,384,648 

Student Loan/Fitness Center 

Programs

 9,948,855 8,777,136 

Unemployment and Workers' 

Compensation

 1,671,000 3,783,124 

Annual Leave 703,693 (2,797,139)

Death Benefi ts 926,124 975,421 

Transit Benefi ts 2,489,071 2,072,218 

Life Insurance 1,160,396 1,119,224 

Workers' Compensation Actuarial 

Adjustment 975,951 1,806,091 

 Total $ 306,706,989 $ 298,666,559 

Federal Employee and Veterans' 

Benefi ts 

 (Imputed Financing Source)

2008 2007

Current Service Cost - Federal

Employees Health Benefi ts $ 45,326,565 $ 47,409,363 

Current Service Cost - Federal

Pensions 11,086,203 11,226,160 

Current Service Cost - Federal 

Employees Group Life Insurance 114,031 109,678 

 Total $ 56,526,799 $ 58,745,201 

prior year in the amount of $1million that is refl ected in the 

current year operating results.
This Page Intentionally Left Blank

62
63

Supplemental Financial Schedules
Supplemental Financial Schedules

64

This Page Intentionally Left Blank
Supplemental Financial Schedules

65

Consolidating Statements
Supplemental Financial Schedules

66

U.S. House of Representatives

Consolidating Statement of Financial Position

as of September 30, 2008 

 Total Assets $ 27,208,347 $ 13,718,286 

LIABILITIES AND NET POSITION

 Accounts Payable $ 11,204,261 $ 1,686,032 

 Interoffi ce Payable 1,215,717 250,941 

 Capital Lease Liabilities - - 

 Accrued Funded Payroll and Benefi ts 8,151,261 182,456 

 Accrued Workers’ Compensation 1,270,636 462,595 

 Accrued Unfunded Annual Leave 1,161,369 653,151 

 Deferred Credits - - 

 Unfunded Workers’ Compensation

 Actuarial Liability - - 

 Other Liabilities - - 

 Total Liabilities 23,003,244 3,235,175 

 Unexpended Appropriations 6,429,115 7,096,484 

 Cumulative Results of Operations (2,224,012) 3,386,627 

 Total Net Position 4,205,103 10,483,111 

 Total Liabilities and Net Position $ 27,208,347 $ 13,718,286 

Members Committees

ASSETS

 Fund Balance with U.S. Treasury $ 24,334,971 $ 8,609,861 

 Cash - -

 Fund Balance with U.S. Treasury and Cash 24,334,971 8,609,861 

 Accounts Receivable, Net 99,649 18,353 

 Interoffi ce Receivable - -

 Advances and Prepayments 2,565,738 587,699 

 Inventory - -

 Property and Equipment, Net 207,989 4,502,373 

 
$ 6,273,944 $ 182,923,055 $ 4,089,681 $ (1,651,239) $ 232,562,074 

$ 486,313 $ 25,859,921 $ 835,184 $ - $ 40,071,711 

 53,182 121,664 9,735 (1,651,239) - 

 - 6,957,008 - - 6,957,008 

 170,813 328,124 8,355 - 8,841,009 

 58,179 292,733 24,473 - 2,108,616 

 47,406 4,263,178 6,680 - 6,131,784 

- 1,217,375 - - 1,217,375 

 - 22,392,436 - - 22,392,436 

- 107,493 - - 107,493 

 815,893 61,539,932 884,427 (1,651,239) 87,827,432 

 5,430,091 79,981,585 2,700,857 - 101,638,132 

 27,960 41,401,538 504,397 - 43,096,510 

 5,458,051 121,383,123 3,205,254 - 144,734,642 

$ 6,273,944 $ 182,923,055 $ 4,089,681 $ (1,651,239) $ 232,562,074 

Offi cers and

Leadership Legislative

Offi ces Offi ces Joint Functions Eliminations Combined

$ 6,060,590 $ 126,832,635 $ 3,473,535 $ - $ 169,311,592 

 - 739 - - 739 

 6,060,590 126,833,374 3,473,535 - 169,312,331 

 2,410 393,157 - - 513,569 

- 1,651,239 - (1,651,239) -

 77,399 813,455 200,030 - 4,244,321 

 - 1,247,985 - - 1,247,985 

 133,545 51,983,845 416,116 - 57,243,868 

Supplemental Financial Schedules

67
Supplemental Financial Schedules

68

Members Committees

REVENUE AND FINANCING SOURCES

 Revenue from Operations

 Sales of Goods $ - $ -

 Sales of Services to Federal Entities - -

 Sales of Services to the Public - -

 Interoffi ce Sales - -

 Other Revenue - -

 Total Revenue from Operations - -

 Financing Sources

 Appropriations to Cover Expenses:

 Appropriations Received 832,910,027 227,008,871 

 Appropriations Yet To Be Received 160,653 (35,804)

 Imputed Financing Source 35,028,789 11,878,366 

 Total Revenue and Financing Sources $ 868,099,469 $ 238,851,433 

EXPENSES

 Personnel Compensation $ 482,822,319 $ 148,824,824 

 Benefi ts 194,986,022 60,860,201 

 Postage and Delivery 34,605,987 15,003 

 Repairs and Maintenance 23,270,668 5,622,390 

 Depreciation and Amortization 140,594 1,796,344 

 Rent, Communications, and Utilities 26,961,050 16,224 

 Telecommunications 14,276,297 1,927,790 

 Supplies and Materials 8,668,290 1,658,139 

 Travel and Transportation 27,634,279 11,892,491 

 Contract, Consulting, and Other Services 14,948,922 4,396,375 

 Printing and Reproduction 30,700,307 47,941 

 Subscriptions and Publications 8,923,617 1,474,297 

 Cost of Goods Sold - -

 Other Expenses 17,575 308,051 

 Bad Debts 143,542 11,363 

 Interest on Capital Leases - -

 Total Expenses $ 868,099,469 $ 238,851,433 

 Excess (Shortage) of Revenue and

 Financing Sources over Total Expenses $ - $ -

CHANGE IN NET POSITION

 Net Position, Beginning Balance $ 9,276,185 $ 13,057,713 

 Excess (Shortage) of Revenue and Financing

 Sources over Total Expenses - -

 Plus (Minus) Non-Operating Changes (5,071,082) (2,574,602)

 Net Position, Ending Balance $ 4,205,103 $ 10,483,111 

U.S. House of Representatives

Consolidating Statement of Operations

for the Year Ended September 30, 2008 
Offi cers and

Leadership Legislative

Offi ces Offi ces Joint Functions Eliminations Combined

$ - $ 2,973,938 $ - $ - $ 2,973,938 

- 4,061,714 - - 4,061,714 

- 808,011 119,434 - 927,445 

- 21,517,640 - (21,517,640) -

- 991,411 - - 991,411 

- 30,352,714 119,434 (21,517,640) 8,954,508 

 31,327,849 232,104,737 15,279,508 - 1,338,630,992 

 (11,268) 2,561,697 4,366 - 2,679,644 

 1,461,526 7,524,438 633,680 - 56,526,799 

$ 32,778,107 $ 272,543,586 $ 16,036,988 $ (21,517,640) $ 1,406,791,943 

$ 18,846,112 $ 94,345,422 $ 7,873,392 $ - $ 752,712,069 

 7,623,972 40,045,931 3,190,863 - 306,706,989 

 13,568 141,674 3,597 - 34,779,829 

 1,017,023 30,381,310 685,104 - 60,976,495 

 46,941 13,354,164 478,154 - 15,816,197 

 122,571 296,479 - - 27,396,324 

 611,279 8,322,080 125,078 - 25,262,524 

 775,201 4,567,825 599,431 - 16,268,886 

 2,673,445 1,254,394 88,124 - 43,542,733 

 564,564 48,183,895 2,582,908 - 70,676,664 

 87,426 61,489 3,681 - 30,900,844 

 368,037 1,669,256 286,890 - 12,722,097 

- 27,899,206 - (21,517,640) 6,381,566 

 15,631 1,118,892 - - 1,460,149 

 12,337 58,435 332 - 226,009 

0 199,016 - - 199,016 

$ 32,778,107 $ 271,899,468 $ 15,917,554 $ (21,517,640) $ 1,406,028,391 

$ - $ 644,118 $ 119,434 $ - $ 763,552 

$ 5,104,565 $ 140,908,562 $ 3,313,523 $ - $ 171,660,548 

- 644,118 119,434 - 763,552 

 353,486 (20,169,557) (227,703) - (27,689,458)

$ 5,458,051 $ 121,383,123 $ 3,205,254 $ - $ 144,734,642 

Supplemental Financial Schedules

69
Supplemental Financial Schedules

70

Members Committees

CASH FLOWS FROM OPERATING ACTIVITIES

 Excess / (Defi ciency) of Revenue and

 Financing Sources over Expenses $ - $ -

 Adjustments affecting Cash Flow

 Expended and Unexpended Appropriations (730,422,295) (174,860,482)

 (Increase)/Decrease in Accounts and Interoffi ce Receivable 12,894 (23,425)

 Increase/(Decrease) in Allowance for Doubtful Accounts 3,538 8,201 

 (Increase)/Decrease in Advances and Prepayments 519,765 54,855 

 (Increase)/Decrease in Inventory - - 

 Increase/(Decrease) in Accounts and Interoffi ce Payable 687,192 227,276 

 Increase/(Decrease) in Other Accrued Liabilities 409,151 72,668 

 (Gain)/Loss on Disposal of Assets 17,575 308,051 

 Depreciation and Amortization 140,594 1,796,344 

 

 Net Cash Provided / (Used) by Operating Activities (728,631,586) (172,416,512)

CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of Property and Equipment (267,314) (825,940)

 Net Cash Provided / (Used) by Investing Activities (267,314) (825,940)

CASH FLOWS FROM FINANCING ACTIVITIES

 Appropriations 691,339,000 163,511,000 

 Funds Returned to the U.S. Treasury (36,549) (75,726)

 Appropriated Funds Allocated 34,231,521 7,292,620 

 Principal Payment on Capital Lease Liabilities - - 

 Net Cash Provided / (Used) by Financing Activities 725,533,972 170,727,894 

 Net Cash Provided/(Used) by Operating, Investing

 and Financing Activities (3,364,928) (2,514,558)

 Fund Balance with U.S. Treasury and Cash, Beginning 27,699,899 11,124,419 

 Fund Balance with U.S. Treasury and Cash, Ending $ 24,334,971 $ 8,609,861 

U.S. House of Representatives

Consolidating Statement of Cash Flows

for the Year Ended September 30, 2007 
Offi cers and

Leadership Legislative

Offi ces Offi ces Joint Functions Eliminations Combined

$ - $ 644,118 $ 119,434 $ - $ 763,552 

 (43,853,523) (380,064,647) (12,109,689) - (1,341,310,636)

 105,153 174,505 - (426,615) (157,488)

 (6,634) 220,814 90 - 226,009 

 49,845 618,217 (71,824) - 1,170,858 

- 437,952 - - 437,952 

 111,145 3,275,209 (989,115) 426,615 3,738,322 

 148,134 5,977,152 8,843 - 6,615,948 

 15,631 118,892 - - 460,149 

 46,941 13,354,164 478,154 - 15,816,197 

 (43,383,308) (355,243,624) (12,564,107) - (1,312,239,137)

 (77,336) (16,985,166) (422,729) - (18,578,485)

 (77,336) (16,985,166) (422,729) - (18,578,485)

 20,880,286 420,104,714 12,003,000 - 1,307,838,000 

 (304,298) (2,723,398) (1,107,221) - (4,247,192)

 23,605,884 (66,118,639) 988,614 - - 

- (736,243) - - (736,243)

 44,181,872 350,526,434 11,884,393 - 1,302,854,565 

 721,228 (21,702,356) (1,102,443) - (27,963,057)

 5,339,362 148,535,730 4,575,978 - 197,275,388 

$ 6,060,590 $ 126,833,374 $ 3,473,535 $ - $ 169,312,331 

Supplemental Financial Schedules

71
72

This Page Intentionally Left Blank