This audit report contains the Annual Financial Statement of the Offices, Boards and Divisions (OBDs) for the fiscal years (FY) ended September 30, 2006, and September 30, 2005. Under the direction of the Office of the Inspector General (OIG), KPMG LLP (KPMG) performed the OBDs audit. The audit resulted in an unqualified opinion on the FY 2006 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 2005, the OBDs also received an unqualified opinion on its financial statements (OIG Report No. 06-05).

The Independent Auditors’ Report on Internal Control identified one reportable condition. This reportable condition concerns weaknesses in the information system controls environment and is a repeat condition that has been reported since FY 2004. While this is a repeat condition, the previous underlying issues have been adequately addressed, but new issues were identified. The auditors reported no compliance issues for the OBDs in FY 2006.

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 OBDs’ financial statements, conclusions about the effectiveness of internal control, conclusions on whether the OBDs’ 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 November 6, 2006, and the conclusions expressed in the report. However, our review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards.