GAO

United States General Accounting Office

Report to the Congress

April 2001 FINANCIAL AUDIT

Capitol Preservation 

Fund’s Fiscal Years 

2000 and 1999 

Financial Statements

GAO-01-619

Page 1 GAO-01-619 Capitol Preservation Fund

Contents

Letter 3

Auditor’s Report 5

Financial Statements 10

Statements of Finanical Position 10

Statements of Activities 11

Statements of Cash Flows 12

Notes to Financial Statements 13

Supplemental 

Schedules

16

Schedules of Financial Position - Coin Sales Surcharge Fund 16

Schedules of Financial Position - Gifts and Sales of Art, Property,

and Money Fund 17

Schedules of Activities - Coin Sales Surcharge Fund 18

Schedules of Activities - Gifts and Sales of Art, Property,

and Money Fund 19

Schedules of Cash Flows - Coin Sales Surcharge Fund 20

Schedules of Cash Flows - Gifts and Sales of Art, Property,

and Money Fund 21
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United States General Accounting Office

Washington, D.C. 20548 Letr

April 30, 2001

To the President of the Senate and the

Speaker of the House of Representatives

This report presents our opinion on the financial statements of the Capitol 

Preservation Fund for the fiscal years ended September 30, 2000 and 1999. 

It also discusses our consideration of the Fund's internal control and our 

tests of compliance with laws and regulations during fiscal year 2000. We 

conducted our audit pursuant to 40 U.S.C. 188a-3 and in accordance with 

U.S. generally accepted government auditing standards. We appreciate the 

cooperation and assistance that the Office of the Secretary of the Senate, 

the Office of the Clerk of the House of Representatives, and the staffs of the 

Architect of the Capitol and the Library of Congress provided during our 

audit.

We are sending copies of this report to the members of the Capitol 

Preservation Commission; the Honorable Gary Sisco, Secretary of the 

Senate; the Honorable Jeffrey T. Trandahl, Clerk of the House of 

Representatives; the Honorable Alan M. Hantman, Architect of the Capitol; 

the Honorable James H. Billington, Librarian of Congress; and other 

interested parties. 

This report was prepared under the direction of Jeanette M. Franzel, Acting 

Director, who can be reached at (202) 512-9406. If I can be of further 

assistance, please call me at (202) 512-2600.

Jeffrey C. Steinhoff

Managing Director

Financial Management and Assurance
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United States General Accounting Office

Washington, D.C. 20548 AudRtosir’eport

To the Members of the Capitol Preservation Commission

We have audited the statements of financial position of the Capitol 

Preservation Fund as of September 30, 2000 and 1999, and the related 

statements of activities and statements of cash flows for the fiscal years 

then ended. We found

• the financial statements are presented fairly in conformity with U.S. 

generally accepted accounting principles,

• no material weaknesses in internal control over financial reporting 

(including safeguarding assets) and compliance with laws and 

regulations, and

• no reportable noncompliance with the provisions of laws and 

regulations we tested.

The following sections provide additional detail about our conclusions and 

the scope of our audit.

Opinion on Financial 

Statements

The financial statements and accompanying notes present fairly, in all 

material respects, in conformity with U.S. generally accepted accounting 

principles, the Capitol Preservation Fund's financial position as of 

September 30, 2000 and 1999, and the results of its activities and its cash 

flows for the fiscal years then ended.

Our audit was conducted for the purpose of forming an opinion on the 

financial statements taken as a whole. The supplemental schedules shown 

by source of funds as of and for the periods ended September 30, 2000 and 

1999 are presented for the purpose of additional analysis and are not a 

required part of the basic financial statements. This information has been 

subjected to the audit procedures applied to the audit of the basic financial 

statements. In our opinion, the information in the supplemental schedules 

is fairly stated in all material respects in relation to the basic financial 

statements taken as a whole.

Consideration of 

Internal Control

In planning and performing our audit of the Capitol Preservation Fund's 

fiscal year 2000 financial statements, we considered the Fund's internal 
Page 6 GAO-01-619 Capitol Preservation Fund

control1 in order to determine our procedures for auditing the financial 

statements. The purpose of our consideration of internal control was not to 

provide an opinion on internal control. Accordingly, we do not express an 

opinion on internal control. However, for the controls we tested, we found 

no material weaknesses in internal controls over financial reporting 

(including safeguarding assets) and compliance. A material weakness is a 

condition in which the design or operation of internal control does not 

reduce to a relatively low level the risk that errors, fraud, or noncompliance 

in amounts that would be material in relation to the financial statements 

may occur and not be detected promptly by employees in the normal 

course of performing their duties. Our consideration of internal control 

would not necessarily disclose all material weaknesses.

Compliance With Laws 

and Regulations

Our tests for compliance with selected provisions of laws and regulations 

disclosed no instances of noncompliance that would be reportable under 

U.S. generally accepted government auditing standards. However, the 

objective of our audit was not to provide an opinion on overall compliance 

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

Objectives, Scope, and 

Methodology

The management of the Capitol Preservation Commission is responsible 

for

• preparing the Fund's annual financial statements in conformity with 

U.S. generally accepted accounting principles,

1

We considered internal control over financial reporting and compliance. The objectives of 

financial reporting control are to provide reasonable assurance that transactions are 

properly recorded, processed, and summarized to permit the preparation of the financial 

statements in conformity with U.S. generally accepted accounting principles, and assets are 

safeguarded against loss from unauthorized acquisition, use, or disposition. The objective of 

compliance control is to provide reasonable assurance that transactions are executed in 

accordance with laws governing the use of budget authority and other laws and regulations 

that could have a direct and material effect on the financial statements.
Page 7 GAO-01-619 Capitol Preservation Fund

• establishing and maintaining internal control to provide reasonable 

assurance that the objectives of internal control2

 are met, and 

• complying with applicable laws and regulations.

We are responsible for

• obtaining reasonable assurance about whether the financial statements 

are presented fairly, in all material respects, in conformity with U.S. 

generally accepted accounting principles, 

• obtaining a sufficient understanding of internal control over financial 

reporting and compliance with laws and regulations to plan the audit, 

and

• testing compliance with selected provisions of laws and regulations that 

have a direct and material effect on the financial statements.

In order to fulfill these responsibilities, we (1) examined, on a test basis, 

evidence supporting the amounts and disclosures in the financial 

statements and supplemental schedules, (2) assessed the accounting 

principles used and significant estimates made by management, 

(3) evaluated the overall presentation of the financial statements and 

supplemental schedules, (4) obtained an understanding of the design and 

operation of internal control related to financial reporting (including 

safeguarding assets) and compliance with laws and regulations and tested 

selected internal controls, and (5) tested compliance with selected 

provisions of the following laws and/or regulations. 

• Capitol Preservation Commission and Capitol Preservation Fund 

enabling legislation, 40 U.S.C. 188a-188a-5.

• Public laws providing commemorative coin surcharges to the Capitol 

Preservation Fund: Bicentennial of the United States Congress 

Commemorative Coin Act, Public Law 100-673; Bicentennial of the 

United States Capitol Commemorative Coin Act, Title IV, Public Law 

103-186; and United States Capitol Visitor Center Commemorative Coin 

Act of 1999, Title II, Public Law 106-126.

2

Management’s internal control responsibility encompasses controls related to (1) the 

effectiveness and efficiency of operations including the use of resources, (2) the reliability 

of financial reporting including internal and external reports on the use of resources and 

financial statements, and (3) compliance with laws and regulations. Within each of these 

categories, management is responsible for establishing controls to prevent or promptly 

detect unauthorized acquisition, use, or disposition of assets (safeguarding assets).
Page 8 GAO-01-619 Capitol Preservation Fund

We did not test all internal controls relevant to the operations of the Capitol 

Preservation Fund. We limited our consideration to internal control over 

financial reporting and compliance with laws and regulations for the 

purpose of planning our audit. Because of inherent limitations in internal 

control, misstatements due to error or fraud, losses, or noncompliance may 

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

consideration of internal control to future periods is subject to the risk that 

controls may become inadequate because of changes in conditions or that 

the degree of compliance with controls may deteriorate. In addition, we 

caution that our internal control testing may not be sufficient for other 

purposes.

We did not test compliance with all laws and regulations applicable to the 

Capitol Preservation Fund. We limited our tests of compliance to selected 

provisions of laws and regulations that we deemed applicable to the Fund's 

financial statements for the fiscal year ended September 30, 2000. We 

caution that non-compliance may occur and not be detected by our tests 

and such testing may not be sufficient for other purposes.

We performed our work from January 2, 2001 through February 9, 2001 in 

accordance with U.S. generally accepted government auditing standards.

Commission 

Comments

We provided a draft of our report to representatives of the Capitol 

Preservation Commission for their review and comment. The 

Commission's representatives agreed with the contents of our report.

Jeffrey C. Steinhoff

Managing Director

Financial Management and Assurance

February 9, 2001
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Financial Statements

Statements of Finanical Position

CAPITOL PRESERVATION FUND 

STATEMENTS OF FINANCIAL POSITION

2000 1999

Assets

Cash $ 953 $ 4,072

Investments, net (note 3) 29,087,824 27,627,052

Accrued interest receivable on investments 419,941 298,949

 Total assets $ 29,508,718 $ 27,930,073

Liabilities and Net Assets

 Total liabilities 0 0

Net Assets

Unrestricted net assets $ 29,508,718 $ 27,930,073

 Total net assets $ 29,508,718 $ 27,930,073

Total Liabilities and Net Assets $ 29,508,718 $ 27,930,073

as of September 30

The accompanying notes are an integral part of these financial statements.
Financial Statements

Page 11 GAO-01-619 Capitol Preservation Fund

Statements of Activities

CAPITOL PRESERVATION FUND 

STATEMENTS OF ACTIVITIES

2000 1999

Changes in Unrestricted Net Assets

Operating Revenues

Interest (note 4) $ 1,599,011 $ 1,274,587

 Total operating revenues $ 1,599,011 $ 1,274,587

Operating Expenses

Purchase Expenditures (note 5) 20,366 0

 Total operating expenses 20,366 0

 Increase in unrestricted net assets $ 1,578,645 $ 1,274,587

Increase in Net Assets $ 1,578,645 $ 1,274,587

Net Assets at Beginning of Year $ 27,930,073 $ 26,655,486

Net Assets at Year-End $ 29,508,718 $ 27,930,073

for the Fiscal Years Ended September 30

The accompanying notes are an integral part of these financial statements.
Financial Statements

Page 12 GAO-01-619 Capitol Preservation Fund

Statements of Cash Flows

CAPITOL PRESERVATION FUND 

STATEMENTS OF CASH FLOWS

for the Fiscal Years Ended September 30

2000 1999

Cash Flows From Operating Activities

 Interest received $ 1,478,019 $ 1,259,513

 Cash paid for expenses (20,366) 0

 Net cash used by operating activities $ 1,457,653 $ 1,259,513

Cash Flows From Investing Activities

 Purchases of Treasury securities $ (59,512,753) $ (56,175,937)

 Maturities of Treasury securities 58,051,981 54,907,486

 Net cash provided (used) in investing activities $ (1,460,772) $ (1,268,451)

Net (Decrease) Increase In Cash $ (3,119) $ (8,938)

Cash at beginning of year 4,072 13,010

Cash at end of year $ 953 $ 4,072

Reconciliation of Change in Net Assets to

 Net Cash Used by Operating Activities

Change in Net Assets $ 1,578,645 $ 1,274,587

Adjustments to reconcile change in net assets to

net cash used by operating activities

Decrease (increase) in accrued interest (120,992) (15,074)

Total Adjustments (120,992) (15,074)

Net Cash Used by Operating Activities $ 1,457,653 $ 1,259,513

The accompanying notes are an integral part of these financial statements.
Financial Statements

Page 13 GAO-01-619 Capitol Preservation Fund

Notes to Financial Statements

CAPITOL PRESERVATION FUND

NOTES TO FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF ENTITY

The Capitol Preservation Commission (the Commission) was established under Title

VIII of Public Law 100-696 in November 1988 for the purpose of providing for

improvements in, preservation of, and acquisitions for the United States Capitol and

providing works of fine art and other property for display in the United States Capitol and

other locations under the control of the Congress.

To finance improvement, preservation, and acquisition activities of the Commission,

Title VIII of Public Law 100-696 established the Capitol Preservation Fund (the Fund)

within the U.S. Treasury. The Fund consists of assets provided through deposits of

charitable contributions, surcharges received by the Secretary of the Treasury from the

sale of coins under the Bicentennial of the United States Congress Commemorative

Coin Act and the Bicentennial of the United States Capitol Commemorative Coin Act,

and interest on the invested portions of the Fund’s assets. Fund assets not required to

finance current improvement, preservation, and acquisition activities are invested in

interest-bearing obligations of the United States.

In accordance with its rules, the Commission may fund or assist in the funding of

improvements to the Capitol Building and surrounding grounds if such improvements

are authorized, undertaken, and completed under the procedures established by the

Congress for such purposes. With respect to works of fine art and other property for

display, the Commission is authorized to expend $400,000 ($200,000 for the House of

Representatives and $200,000 for the Senate) for the purchase of art, furnishings, or

items of historical interest provided that such expenses are approved by a majority of

the members of the Commission from the House of Congress for which such purchases

are made. However, the Commission may not maintain any collection of fine or

decorative art, or other property, but may assist in the transfer of such items to a

Congressional entity (such as the Senate Commission on Art, the House Fine Arts

Board, or the Joint Committee on the Library) or facilitate the disposal of items.

The Architect of the Capitol, the Senate Commission on Art, the House of

Representatives Fine Arts Board are required by Public Law 100-696 (1988), to provide

staff support and assistance to the Commission. As necessary, the Architect of the

Capitol awards contracts and procures goods and services to complete projects

established by the Commission, and ensures that goods and services purchased from
Financial Statements

Page 14 GAO-01-619 Capitol Preservation Fund

vendors are received. Similarly, the Library of Congress, pursuant to Public Law 101-

45, (1989) is required to provide financial management services for the Commission. 

These services include coordinating activities with the Department of the Treasury for

the deposit, disbursement, investment, and management of the Capitol Preservation

Fund. In addition to these congressional entities, the Secretary of the Senate and the

Clerk of the House of Representatives, pursuant to Commission Rules, provide

additional support and assistance.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Fund’s financial statements have been prepared in conformity with U.S. generally

accepted accounting principles and reflect–on an accrual basis–the receipt and use of

the Fund’s assets to finance the Commission’s improvement, preservation, and

acquisition activities. The Fund’s investments are recorded at cost, net of discounts,

which approximates fair market value. The Fund’s investments are invested in short

term (3 and 6 month) interest-bearing Treasury obligations.

The Architect of the Capitol, the Library of Congress, and other congressional entities

are required by law to provide support services to the Commission. The cost of these

services are, by their nature, indirect, difficult to quantify, and financed with appropriated

funds of the other entities. To the extent that these services are provided, they are not

considered operating expenses of the Fund.

Once approved and funded by the Commission, the improvements, preservation, and

acquisitions are transferred to the Architect of the Capitol and/or other congressional

entities. Through their transfer, these assets become the accounting responsibility of

other congressional entities and are not considered assets of the Fund.

NOTE 3: INVESTMENTS, NET

Deposits to the Fund from contributions, coin surcharges, and interest on invested funds

that are not needed currently to finance improvement, preservation, and acquisition

activities are invested in interest-bearing obligations of the United States, which are

purchased from the U.S. Treasury at a discount. The Commission has

directed the Library of Congress to invest funds derived from contributions in 3-month

Treasury securities and funds derived from coin surcharges in 6-month Treasury

securities. The value of investments outstanding as of September 30, 2000 and 1999,

net of discounts, was $29,087,824 and $27,627,052 respectively. Annual investment
Financial Statements

Page 15 GAO-01-619 Capitol Preservation Fund

rates ranged from 4.67 percent to 6.14 percent in fiscal year 2000 and from 3.32

percent to 4.96 percent in fiscal year 1999.

Outstanding Investments as of September 30

2000 1999

Face Value of Investments $ 29,952,000 $ 28,285,000

Less: Discounts (864,176) (657,948)

Investments, Net of Discounts $ 29,087,824 $ 27,627,052

NOTE 4: REVENUES

Earned operating revenues during fiscal year 2000 of $1,599,011 and fiscal year 1999

earned revenues of $1,274,587 consisted only of interest on United States Treasury

obligations.

NOTE 5: PURCHASE EXPENDITURES

During fiscal year 2000, Fund assets were used for purchases of antique furnishings for

display and artwork for future exhibition in the U.S. Senate wing of the Capitol and for

materials related to the June 20, 2000, groundbreaking ceremony for the Capitol Visitor

Center.

Antique Furnishings and Art Work for

the U.S. Senate Offices in the Capitol

Furnishings for display in Leadership Offices $ 17,100

Artwork for future exhibition 375

$ 17,475

Capitol Visitor Center

Ceremonial shovels and granite plaque for the 

Capitol Visitor Center groundbreaking $ 2,891

Total $ 20,366
Page 16 GAO-01-619 Capitol Preservation Fund

Supplemental Schedules

Schedules of Financial Position - Coin Sales Surcharge Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF FINANCIAL POSITION

COIN SALES SURCHARGE FUND 

as of September 30

2000 1999

Assets

Cash $ 741 $ 1,354

Investments, net 28,067,277 26,642,688

Accrued interest receivable on investments 413,902 294,318

 Total assets $ 28,481,920 $ 26,938,360

Liabilities and Net Assets

 Total liabilities 0 0

Net Assets

Unrestricted net assets $ 28,481,920 $ 26,938,360

 Total net assets $ 28,481,920 $ 26,938,360

Total Liabilities and Net Assets $ 28,481,920 $ 26,938,360
Supplemental Schedules

Page 17 GAO-01-619 Capitol Preservation Fund

Schedules of Financial Position - Gifts and Sales of Art, Property, and Money Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF FINANCIAL POSITION

GIFTS AND SALES OF ART, PROPERTY, AND MONEY FUND 

as of September 30

2000 1999

Assets

Cash $ 212 $ 2,718

Investments, net 1,020,547 984,364

Accrued interest receivable on investments 6,039 4,631

 Total assets $ 1,026,798 $ 991,713

Liabilities and Net Assets

 Total liabilities 0 0

Net Assets

Unrestricted net assets $ 1,026,798 $ 991,713

 Total net assets $ 1,026,798 $ 991,713

Total Liabilities and Net Assets $ 1,026,798 $ 991,713
Supplemental Schedules

Page 18 GAO-01-619 Capitol Preservation Fund

Schedules of Activities - Coin Sales Surcharge Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF ACTIVITIES

COIN SALES SURCHARGE FUND 

for the Fiscal Years Ended September 30

2000 1999

Changes in Unrestricted Net Assets

Operating Revenues

Interest $ 1,543,560 $ 1,230,299

 Total operating revenues $ 1,543,560 $ 1,230,299

Operating Expenses

Purchase expenditures $ 0 $ 0

 Total operating expenses $ 0$ 0

 Increase in unrestricted net assets $ 1,543,560 $ 1,230,299

Increase in Net Assets $ 1,543,560 $ 1,230,299

Net Assets at Beginning of Year $ 26,938,360 $ 25,708,061

Net Assets at Year-End $ 28,481,920 $ 26,938,360
Supplemental Schedules

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Schedules of Activities - Gifts and Sales of Art, Property, and Money Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF ACTIVITIES

GIFTS AND SALES OF ART, PROPERTY, AND MONEY FUND 

for the Fiscal Years Ended September 30

2000 1999

Changes in Unrestricted Net Assets

Operating Revenues

Interest $ 55,451 $ 44,288

 Total operating revenues $ 55,451 $ 44,288

Operating Expenses

Purchase expenditures $ 20,366 $ 0

 Total operating expenses 20,366 0

 Increase in unrestricted net assets $ 35,085 $ 44,288

Increase in Net Assets $ 35,085 $ 44,288

Net Assets at Beginning of Year $ 991,713 $ 947,425

Net Assets at Year-End $ 1,026,798 $ 991,713
Supplemental Schedules

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Schedules of Cash Flows - Coin Sales Surcharge Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF CASH FLOWS

COIN SALES SURCHARGE FUND 

for the Fiscal Years Ended September 30

2000 1999

Cash Flows From Operating Activities

 Interest received $ 1,423,975 $ 1,216,450

 Cash paid for expenses 0 0

 Net cash used by operating activities $ 1,423,975 $ 1,216,450

Cash Flows From Investing Activities

 Purchases of Treasury securities $ (55,352,613) (52,702,605)

 Maturities of Treasury securities 53,928,025 51,479,550

 Net cash provided (used) in investing activities $ (1,424,588) $ (1,223,055)

Net (Decrease) Increase in Cash $ (613) $ (6,605)

Cash at beginning of year 1,354 7,959

Cash at end of year $ 741 $ 1,354

Reconciliation of Change in Net Assets to 

 Net Cash Used by Operating Activities

Change in Net Assets $ 1,543,560 $ 1,230,299

Adjustments to reconcile change in net assets to 

net cash used by operating activities

Decrease (increase) in accrued interest (119,584) (13,849)

Total Adjustments (119,584) (13,849)

Net Cash Used by Operating Activities $ 1,423,976 $ 1,216,450
Supplemental Schedules

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Schedules of Cash Flows - Gifts and Sales of Art, Property, and Money Fund

CAPITOL PRESERVATION FUND 

SCHEDULES OF CASH FLOWS

GIFTS AND SALES OF ART, PROPERTY, AND MONEY FUND 

for the Fiscal Years Ended September 30

2000 1999

Cash Flows From Operating Activities

 Interest received $ 54,044 $ 43,063

 Cash paid for expenses (20,366) 0

 Net cash used by operating activities $ 33,678 $ 43,063

Cash Flows From Investing Activities

 Purchases of Treasury securities $ (4,160,140) $ (3,473,332)

 Maturities of Treasury securities 4,123,956 3,427,936

 Net cash provided (used) in investing activities $ (36,184) $ (45,396)

Net (Decrease) Increase in Cash $ (2,506) $ (2,333)

Cash at beginning of year 2,718 5,051

Cash at end of year $ 212 $ 2,718

Reconciliation of Change in Net Assets to 

 Net Cash Used by Operating Activities

Change in Net Assets $ 35,085 $ 44,288

Adjustments to reconcile change in net assets to 

net cash used by operating activities

Decrease (increase) in accrued interest (1,408) (1,225)

Total Adjustments (1,408) (1,225)

Net Cash Used by Operating Activities $ 33,677 $ 43,063

(194015) Letr
Supplemental Schedules

Page 22 GAO-01-619 Capitol Preservation Fund

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Washington, D.C. 20548-0001

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