Federal Prison Industries, Inc.
Annual Financial Statement, Fiscal Year 2004
Audit Report 05-09
Office of the Inspector General
This audit report contains the Annual Financial Statement of the Federal Prison Industries, Inc. (FPI) for the fiscal years (FYs) ended September 30, 2004 and September 30, 2003. Under the direction of the Office of the Inspector General (OIG), PricewaterhouseCoopers LLP (PWC) performed the audit, which resulted in an unqualified opinion on the FY 2004 financial statements. An unqualified opinion means the financial statements present fairly, in all material respects, the financial position and results of the operating activity of the entity. The FPI FY 2003 financial statements also received an unqualified opinion (OIG Report No. 04-30).
The FPI corrected several vulnerabilities in their information security program during FY 2004 and also implemented new financial reporting control measures that allowed them to easily meet the Departmentís financial reporting submission deadlines. Specifically, the FPI addressed several audit recommendations regarding access to and monitoring of their financial system, and compliance with federal standards for system design and security. However, some significant weaknesses that FPI must address related to the technical and security design, and implementation of their core financial management system still remain. The one reportable condition in the Report of Independent Auditors on Internal Control discusses these weaknesses. There were no issues reported in the Report on Compliance and Other Matters.
The OIG reviewed PwCís report and related documentation and made necessary inquiries of its representatives. Our review, as differentiated from an audit in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, an opinion on FPIís financial statements, conclusions about the effectiveness of internal control, conclusions on whether FPIís financial management systems substantially complied with FFMIA, or conclusions on compliance with laws and regulations. PwC is responsible for the attached auditorsí report dated October 22, 2004 and the conclusions expressed in the report. However, our review disclosed no instances where PwC did not comply, in all material respects, with generally accepted government auditing standards.