Federal Prison Industries, Inc. Annual Management Report - Fiscal Year 2008

Audit Report 09-11
January 2009
Office of the Inspector General

Commentary and Summary

This audit report contains the Annual Management Report of the Federal Prison Industries, Inc. (FPI) for the fiscal years (FY) ended September 30, 2008, and September 30, 2007. In accordance with the Government Corporation Control Act, as amended (31 U.S.C. §9105), and under the direction of the Office of the Inspector General (OIG), KPMG LLP performed the audit in accordance with U.S. generally accepted government auditing standards, which resulted in an unqualified opinion on the FY 2008 and 2007 financial statements. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and results of the entity’s operations in conformity with U.S. generally accepted accounting principles.

KPMG LLP also issued reports on internal control over financial reporting, and on compliance and other matters. The auditors identified one significant deficiency in the Independent Auditors’ Report on Internal Control over Financial Reporting. The significant deficiency relates to vulnerabilities identified in the FPI’s financial management system general controls environment. Specifically, improvements are needed in the FPI’s access controls, segregation of duties, and system software general controls. No instances of non-compliance with laws and regulations or other matters were identified during the audit.

The OIG reviewed KPMG LLP’s reports and related documentation and made necessary inquires 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 the FPI’s financial statements, conclusions about the effectiveness of internal control, conclusions on whether the FPI’s financial management systems substantially complied with the Federal Financial Management Integrity Act of 1996, or conclusions on compliance with laws and regulations. KPMG LLP is responsible for the attached auditors’ reports dated November 8, 2008, and the conclusions expressed in the reports. However, our review disclosed no instances where KPMG LLP did not comply, in all material respects, with U.S. generally accepted government auditing standards.


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