Federal Prison Industries, Inc. Annual Financial Statement
Fiscal Year 2002

Report No. 03-30
September 2003
Office of the Inspector General

Executive Summary

Federal Prison Industries (commonly referred to as FPI or by its trade name UNICOR) is a wholly-owned government corporation established by Congress on June 23, 1934. Its mission is to employ and provide job skills training to the greatest practicable number of inmates confined within the Federal Bureau of Prisons; contribute to the safety and security of our Nation's federal correctional facilities by keeping inmates constructively occupied; produce market-priced quality goods for sale to the Federal Government; operate in a self-sustaining manner; and minimize FPI's impact on private business and labor.

Our audit of the financial statements resulted in an unqualified opinion, meaning that the financial statements present fairly, in all material respects, the financial position and results of operation for the entity. In the Independent Auditors' Report on Internal Controls the auditors identified one material weakness and one reportable condition. The material weakness states that FPI's information security program management and controls require improvement. The reportable condition states improvements are needed in FPI's development and implementation of accounting policies to ensure financial statements are prepared in accordance with generally accepted accounting principles.