Working Capital Fund Annual Financial Statement
Fiscal Year 2005

Audit Report 06-12
February 2006
Office of the Inspector General

Commentary and Summary

This audit report contains the Annual Financial Statement of the Working Capital Fund (WCF) for the fiscal years (FY) ended September 30, 2005, and September 30, 2004. Under the direction of the Office of the Inspector General (OIG), KPMG LLP (KPMG) performed the WCF audit. The audit resulted in an unqualified opinion on the FY 2005 financial statements. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and the results of the entity’s operations. For FY 2004, the WCF also received an unqualified opinion on its financial statements (OIG Report No. 05-05).

The Independent Auditors’ Report on Internal Control over Financial Reporting identified two reportable conditions in FY 2005. The reportable conditions are related to improvement needed in certain accrual accounting functions and weaknesses in the information system controls environment. None of the reportable conditions are believed to be material weaknesses. The auditors reported no compliance issues for the WCF in FY 2005.

The OIG reviewed KPMG’s 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 the WCF’s financial statements, conclusions about the effectiveness of internal control, conclusions on whether the WCF’s financial management systems substantially complied with the Federal Financial Management Improvement Act of 1996, or conclusions on compliance with laws and regulations. KPMG is responsible for the attached auditors’ report dated October 26, 2005, and the conclusions expressed in the report. However, our review disclosed no instances where KMPG did not comply, in all material respects, with generally accepted government auditing standards.