investment will pay long-term dividends and preserve these historic buildings for decades to come.

Despite missing our energy target this year, sustainable practices are transforming our work in large and small ways by allowing us to reduce energy consumption and conserve natural resources. We improved our chilled water production efficiency with the installation of new chillers and an expanded free cooling system as part of the Refrigeration Plant Revitalization program. AOC’s collective efforts were recognized by the Association of Energy Engineers with its Regional Energy Award for Accomplishments on Developing, Organizing, Managing and Implementing an Outstanding Corporate Energy Management Program.

We also addressed our curatorial mission with multiple projects including significant progress on the restoration of walls and ceilings throughout the Capitol’s Brumidi Corridors. On the Capitol Grounds, two historic bronze fountain basins and six large lanterns designed under Frederick Law Olmsted were thoroughly restored and modernized. AOC also welcomed the newest statue to the National Statuary Hall Collection, Iowa’s Norman Borlaug, celebrating his life’s work and impact on global hunger.

Throughout the year, we made great strides working smarter and leaner by undertaking a number of cost savings measures. We developed a marketing assessment, purchasing strategy and acquisition plan for natural gas at the Capitol Power Plant and that work is expected to yield significant cost savings. Other efforts to work lean include continued overtime management, consolidated network servers and renegotiated contract leases and finance rates.

In addition, AOC continued to look for prudent shared services opportunities. For example, in FY 2014 AOC implemented the initial phase of its migration to a new Human Resources Information System and continued to plan for the hosting of its financial systems by the Library of Congress.

Management Opportunities and Challenges

Despite these successes, AOC still sees challenges and opportunities for improvement. Foremost among these is the $1.3 billion backlog of deferred maintenance, capital renewal, security, life-safety, accessibility and environmental projects. Budget constraints necessitated difficult programmatic decisions and careful prioritization. While the reassignment of capital renewal work to future years has reduced the immediate funding strain, it creates a trade-off of greater risk of building and system failure and, most likely, higher future replacement costs.

Providing first-class service to our customers and executing numerous large-scale and highly visible multi-year construction projects is a formidable challenge given resource constraints and funding demands. We are addressing this challenge by developing effective strategies that manage risk and through transparent communications with Congress and the American public.

The AOC Inspector General identified management opportunities and performance challenges which present opportunities for organizational improvement. We are aware of these issues and are committed to addressing them as efficiently as possible. In FY 2014, we worked hard to address the challenges identified by the Inspector General in previous years. As a result, the Inspector General eliminated the policy enforcement challenge and a portion of the procurement challenge.

Conclusion

This fiscal year, AOC received an unmodified (clean) audit opinion on its FY 2014 financial statements—our 10th consecutive year with a clean opinion. In addition, for the second consecutive year, no material weaknesses were noted by our independent auditors. Although three significant deficiencies were identified, management has begun strengthening its processes and controls to address these audit issues. We are proud of these achievements and remain vigilant about sustaining our progress and addressing the audit findings. Work on documenting and testing of our Internal Control Program continues and we are focusing on ways to offset the risks to the organization. This report exemplifies the transparency and accountability that is at the core of AOC’s mission and I provide my assurance that the financial and performance data presented herein are complete, reliable and accurate.

I am proud of this report and the accomplishments AOC’s staff has made. Our employees are our greatest resource and each employee’s contribution is vital to our success. We appreciate the support of Congress and the American people as, together, we make the investments necessary to preserve and maintain our national treasures.

Sincerely,

Stephen T. Ayers, FAIA, LEED AP

Architect of the Capitol

December 3, 2014