Audit: Senate Restaurants Still in the Red

Posted March 7, 2008 at 6:31pm

Just one day after the Senate Rules and Administration Committee confirmed that the chamber’s cafeterias will be privatized, the Government Accountability Office on Friday released its audit of Senate Restaurants’ revolving fund, confirming the panel’s assessment that the group’s finances remain in bad shape.

Senate Restaurants, overseen by the Architect of the Capitol, is currently charged with managing operations of the chamber’s cafeterias, catering services, sundry shop, vending machines and the exclusive Senate Dining Room.

But Senate Restaurants has had trouble balancing its books for years, and fiscal 2007 was no different. The organization posted a deficit of $1.34 million, up from $1.02 million in fiscal 2006, according to the report, which was conducted by the Maryland-based firm Clifton Gunderson.

Before expenses, Senate Restaurants made $10 million in fiscal 2007, just under the $10.1 million made in fiscal 2006. The cost of food, merchandise and other supplies totalled $3.96 million, leading to a gross profit of about $6.06 million in fiscal 2007, according to the report.

But Senate Restaurants posted an overall loss after spending $7.41 million on operations, including $6.8 million for personnel and benefits.

Some of the restaurant operations are subsidized by taxpayers, according to the report. Congress appropriated $850,000 to help Senate Restaurants meet its needs, and the Government Printing Office supplies the restaurants with space, utilities, garbage disposal and printing.

Senate Restaurants’ inability to fix its financial problems is the main reason that the Rules panel directed the AOC last week to enter into contract negotiations with private vendor Restaurant Associates to manage the Senate food operations, said Howard Gantman, staff director of the committee.

Restaurant Associates manages the House cafeterias and is preparing to run operations in the Capitol Visitor Center when it opens in November. When the vendor made its original bid for the CVC, it also bid on food operations in both chambers, with the House accepting the bid and the Senate delaying its decision.

Rules and Administration Chairwoman Dianne Feinstein (D-Calif.) decided instead to focus on a top-to-bottom review of Senate Restaurants, and committee staffers met repeatedly with restaurant officials in an effort to bring things into the black.

But as the situation failed to improve, it became clear that switching to a private vendor was the best option, Gantman said.

In a statement, the AOC said it believes the transition to a private vendor is in the government’s best interest.

“The AOC appreciates its Senate Restaurant employees and will continue to work very closely with the Rules Committee to ensure that they will be treated fairly and respectfully during the transition period,” the statement reads. “Restaurant Associates brings significant expertise to the table, and we are confident that they will ensure a seamless transition and become a valued partner to our Agency.”

Gantman said Feinstein plans to introduce legislation that would ensure all Senate restaurant employees keep their job and benefits.

“Many of these restaurant workers have been here for 20 or more years,” he said. “They’ve been an important part of the Senate family, and we felt it was imperative to ensure that the benefits they’ve been receiving wouldn’t be cut off.”

Contract negotiations could take months, Gantman said. Improvements to Senate food services are expected to focus not just on money matters; better-tasting food and environmental initiatives such as the composting system introduced in January in the House could come to the Senate side, Gantman said.

“We’re looking at all those things, and that will be part of the discussions,” he said.

While the GAO audit appears to be the final nail in the coffin for Senate Restaurants, the report did feature some good news: Senators, former Senators and top chamber officials have been a little better at paying their customer accounts.

In fiscal 2007, Senate Restaurants billed $50,914 to patrons, and 94.9 percent of patrons paid within 30 days, amounting to $48,340. Of the remaining accounts, 4.5 percent, worth $2,286, were paid within 60 days, and 0.6 percent, worth $288, were paid within 90 days. No accounts were due over 90 days.

That’s a slight improvement from fiscal 2006, when $68,357 was billed to patrons. According to the report, only 90.2 percent of patrons paid their bill within 30 days, worth $61,357. About 4.6 percent paid within 60 days, amounting to $3,137, and 4.6 paid within 90 days, worth $3,116. About 0.6 percent had not paid within 90 days, worth $434.