Offices, Boards and Divisions Annual Financial Statement
Fiscal Year 2002

Report No. 03-31
September 2003
Office of the Inspector General

Commentary and Summary

The Offices, Boards and Divisions (OBDs) is a reporting entity within the U.S. Department of Justice (DOJ). The OBDs consists of the U.S. Attorneys, U.S. Trustees, Office of Community Oriented Policing Services, Executive Office for Immigration Review, Legal Divisions, and general administration offices.

This audit report contains the Annual Financial Statement of the OBDs for the fiscal years ended September 30, 2002, and September 30, 2001. Under the direction of the Office of the Inspector General (OIG), PricewaterhouseCoopers LLP performed the audit, which resulted in an unqualified opinion on the FY 2002 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 OBDs also received an unqualified opinion on the FY 2001 financial statements (OIG Report Number 02-26).

The auditors' Report on Internal Control identified one material weakness and one reportable condition for FY 2002. In FY 2001, two reportable conditions were cited. The material weakness relates to long-standing deficiencies in the processing of financial transactions on the accrual basis of accounting. Among the issues reported were significant errors in the status of obligations, the lack of timely invoicing, and the use of non-current data to support amounts in the financial statements. Additionally, there is a lack of integration between the OBDs' financial management system and some of the OBDs' other information systems. As a result, these issues could challenge the OBDs' ability to meet the accelerated reporting deadlines imposed by the DOJ and the Office of Management and Budget in future years. The reportable condition relates to security weaknesses with U.S. Trustees' Fee Information and Collection System. These weaknesses could compromise the security and reliability of financial or program data.

In their FY 2002 Report on Compliance with Laws and Regulations, the auditors concluded that the OBDs' financial management system did not substantially comply with applicable federal accounting standards as required by the Federal Financial Management Improvement Act. No compliance issues had been previously reported for FY 2001.