Federal Bureau of Prisons
Annual Financial Statement
Fiscal Year 2000
Report No. 01-25
Office of the Inspector General
The Federal Bureau of Prisons (BOP) financial reporting component is comprised of the BOP appropriated activities and the BOP Commissary Trust Fund (Commissary). The BOP is charged with overseeing the operations of the prison system. Its mission is to protect society by confining offenders in the controlled environments of prisons and community based facilities. The commissary provides inmates with access to products and services not provided by the BOP. At fiscal year-end the BOP confined approximately 145,125 offenders in 97 institutions and contract facilities throughout the United States.
This audit report contains the Annual Financial Statement (AFS) of the BOP for the fiscal year ended September 30, 2000. Under the direction of the Office of the Inspector General (OIG), Cotton and Company, LLP issued an unqualified opinion on the BOP FY 2000 financial statements. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and results of operations of the entity. The BOP also received an unqualified opinion on its FY 1999 financial statements (OIG Report No. 00-20). Comparative financial statements are not required this year and are therefore not presented.
The FY 2000 Auditor's Report on Internal Control includes three reportable conditions. The first reportable condition states that the BOP needs additional quality control steps to improve the financial statement preparation process. The auditors identified several financial statement adjustments that were incorrect and required subsequent reversal. They also identified material errors in draft versions of the Statement of Financing. The second reportable condition addresses distinguishing between accounts payable and undelivered orders at year-end. This finding is similar but different from the reportable condition contained in the FY 1999 AFS Report. This year's reportable condition addresses three specific types of transactions that need additional internal controls in order to ensure accurate classification between accounts payables and undelivered orders. The third reportable condition relates to a lack of sufficient security controls over the BOP accounting system, Financial Management Information System (FMIS). This reportable condition and related recommendation will be addressed to the Justice Management Division, which has primary responsibility over FMIS. Accordingly, the BOP is not required to provide comments to this reportable condition.