Senate Restaurants Show $1.1 Million Loss

Posted March 11, 2005 at 5:32pm

Despite efforts in recent years to stem repeated revenue shortfalls, the Senate Restaurants posted operating losses of nearly $1.1 million in fiscal 2004, according to an audit issued Thursday by the Government Accountability Office.

The analysis, conducted for GAO by the public accounting firm Clifton Gunderson LLP, found that the continuing deficits have led the Senate Restaurants Revolving Fund to remain dependent on assistance from the Senate and the Architect of the Capitol, receiving $1.1 million in appropriated funds in fiscal 2004.

The Senate Restaurants received a nearly identical amount in fiscal 2003, when it recorded a deficit of more than $678,000.

“If losses from operations continue, the Fund will continue to require future support to maintain operations,” stated the report, which included data on fiscal 2003 and 2004.

Although Congressional officials have sought to slow the Senate Restaurants’ losses after the business posted a deficit of $1.3 million in fiscal 1998, the effort appears to have had short-lived success.

The group decreased its operating losses to $388,000 and $351,000 in fiscal 2000 and 2001, respectively, but the deficit bounced back to $1.2 million in fiscal 2002, although Senate officials have previously attributed that spike to the extended closure of Senate office buildings during the 2001 anthrax attack on Capitol Hill.

The restaurants’ financial statements do not include information on costs such as capital expenditures or maintenance fees, which are paid for by the Architect of the Capitol, or costs such as space or utilities, which the report stated are “not readily identifiable.”

In addition to the overall figures, the report shows that those customers allowed to run a tab, such as Senators, former Senators and certain officials, appear to have reduced spending on their accounts in fiscal 2004.

The restaurants billed $91,314 to the “customer accounts” in fiscal 2004, less than half the $189,545 charged the previous year and significantly less than the $302,000 recorded in fiscal 2002.

During fiscal 2004, the audit listed $79,643 of those accounts — more than 87 percent — zero to 30 days overdue, although the report noted that the restaurants’ accounting office does not mail delinquent notices until a bill is 30 days past due.

Of the remaining accounts, less than 1 percent remained overdue within 60 days; another 4.6 percent, worth $4,235, remained past due 61 to 90 days; and 7.4 percent, totaling $6,756, were unaccounted for after 90 days.

Comparatively, more than 48 percent of the customer accounts remained at least 60 days overdue in fiscal 2003.

The analysis also noted that “substantially all balances outstanding over 60 days” from fiscal 2004 had been collected by mid-December.

Senate Restaurants Director Michael Marinaccio declined to comment on the report, referring questions to the Senate Rules and Administration Committee.