Note 1: Summary of Significant Accounting Policies

A. Reporting Entity

The Architect of the Capitol (AOC) is an agency within the legislative branch of the federal government. Initially authorized by Congress to provide “suitable buildings and accommodations for the Congress of the United States,” its role has expanded to include responsibility for the maintenance, operation, development, and preservation of the AOC Capitol Building (CB); AOC Capitol Grounds (CG); AOC Capitol Police Buildings, Grounds, and Security (CPBGS); AOC House Office Buildings (HOB); AOC Library Buildings and Grounds (LBG); AOC Senate Office Buildings (SOB); AOC Supreme Court Buildings and Grounds (SCBG); AOC Utilities and Capitol Power Plant (CPP); U.S. Botanic Garden (USBG); and U.S. Capitol Visitor Center (CVC).

AOC is also responsible for:

• supporting Congress during official national events (e.g., Presidential Inaugural Ceremonies) held at the Capitol or on the Capitol Grounds

• providing steam and chilled water to the Supreme Court, Thurgood Marshall Federal Judiciary Building (TMFJB), Union Station, and the Folger Shakespeare Library, and steam-only to the Government Printing Office (GPO) and the Postal Square building, and

• providing visitor guide services at the CVC and USBG

Non-entity assets are those held by AOC but unavailable for use in its operations. Activities that give rise to non- entity assets include:

• steam and chilled water collections over the annual Congressional cap

• rent collections from the Monocle Restaurant

• flag-flying fees, and

• provision of palm trees for rent by the USBG

Upon receipt, funds for these activities are not available for AOC use. At year-end, all collections are transferred to Treasury and the only non-entity assets remaining are Accounts Receivable related to these activities.

B. Basis of Accounting and Presentation

As a legislative branch agency of the federal government, AOC is not required to follow the accounting stan- dards promulgated by the Federal Accounting Standards Advisory Board (FASAB). AOC has not formally adopted the Government Management and Reform Act of 1994, the Federal Managers’ Financial Integrity Act, the Federal Financial Management Improvement Act of 1996, or the Government Performance and Results Modernization Act

of 2010, as these apply only to executive branch agencies. Nonetheless, AOC refers to these acts as a general guide for best practices and incorporates them into its financial management practices, as appropriate.

AOC’s financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) as promulgated by FASAB. The American Institute of Certified Public Accountants (AICPA) recognizes FASAB standards as GAAP for federal reporting entities. These principles differ from budgetary reporting principles. The differences relate primarily to the capitalization and depreciation of property and equipment as well as the recognition of other long-term assets and liabilities. AOC has adopted GAAP for financial reporting in a manner consistent with other federal agencies.

In FY 2013, AOC recorded a liability to recognize the estimated clean-up costs related to friable and nonfriable asbestos. These costs are deemed probable and reasonably estimable, and are recognized to be consistent with Statement of Federal Accounting Standards (SFFAS) No. 5, SFFAS No. 6, and FASAB Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, which was effective for periods beginning after September 30, 2012. Upon adoption, this FASAB requirement was reported as a change in accounting principle, as required.

C. Fund Balance with Treasury AOC maintains most available fund balances with the U.S. Department of Treasury (Treasury). The Fund Balance with Treasury (FBWT) account represents the unexpended balances of appropriation accounts, trust accounts, and revolving funds. Cash receipts and disbursements are processed by Treasury, and AOC’s records are reconciled with those accounts on a regular basis. In addition to the FBWT, AOC also has other cash deposits and investments as described in Notes 3 and 4, respectively.

D. Accounts Receivable Accounts Receivable includes reimbursement for supplying certain AOC and non-AOC entities on Capitol Hill with steam and chilled water to heat and cool their facilities (see Note 5). Per annual appropriation, AOC provides steam and chilled water to the Folger Library, Union Station, the Supreme Court and TMFJB, as well as steam-only to the GPO and the Postal Square building. AOC is legislatively provided the authority to collect a pre-determined amount to recover the cost of supplying these services and record these amounts as offsetting collections. Any amount collected over the pre-determined amount is credited to Treasury’s Miscellaneous Receipt Fund and is a non-entity asset. In addition, receivables may arise from food service commissions from operations at the CVC restaurant and from employee payroll overpayments as well as rent collections from the Monocle Restaurant. AOC may