Working Capital Fund Annual Financial Statement, Fiscal Year 2006

Audit Report 07-16
January 2007
Office of the Inspector General


Table of Contents

This audit report contains the Annual Financial Statement of the Working Capital Fund (WCF) 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 WCF 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 entitys operations in conformity with accounting principles generally accepted in the United States. For FY 2005, the WCF also received an unqualified opinion on its financial statements (OIG Report No. 06-12).

The Independent Auditors Report on Internal Control identified two reportable conditions in FY 2006. The reportable conditions are related to improvement needed in controls over recording intragovernmental revenue and weaknesses in the information system controls environment. The weakness in the information system controls environment is a repeat condition that was first reported in FY 2004. While this is a repeat condition, the previous underlying issues have been adequately addressed, but new issues were identified. However, none of the reportable conditions are believed to be material weaknesses. The auditors reported no compliance issues for the WCF in FY 2006.

The OIG reviewed KPMGs reports 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 WCFs financial statements, conclusions about the effectiveness of internal control, conclusions on whether the WCFs 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 reports dated November 3, 2006, and the conclusions expressed in the reports. However, our review disclosed no instances where KMPG did not comply, in all material respects, with generally accepted government auditing standards.



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