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Working Capital Fund Annual Financial Statement
Fiscal Year 1998

Report No. 99-18
June 1999
Office of the Inspector General


The Working Capital Fund (WCF) is a revolving fund authorized to finance, on a break-even basis, administrative services provided by the Justice Management Division (JMD) to the Offices, Boards, Divisions and Bureaus of the Department of Justice (DOJ) and to other Federal agencies. These services are generally commercial functions, such as data processing, publications, building services, financial operations, personnel services, telecommunications, property management, and space management. The WCF is also authorized to receive transfers of unobligated balances of appropriations from other DOJ components. These transfers may be used to fund the acquisition of capital equipment, develop and implement law enforcement or litigation related automated data processing systems, and improve and implement the DOJ's financial management and payroll/personnel systems. The Congress must be notified of the DOJ's intention to use these funds.

This audit report contains the Annual Financial Statement of the WCF for the fiscal year ended September 30, 1998. This audit was performed by Brown & Company CPAs, PLLC, and resulted in an unqualified opinion on the FY 1998 balance sheet, statement of net cost, statement of changes in net position, statement of budgetary resources, statement of financing and statement of custodial activity. The WCF previously received an unqualified opinion on its FY 1997 statement of financial position and the related statement of operations and changes in net position.

The independent auditor's report on internal control identified one reportable condition concerning an unreconciled Treasury account. This issue was previously reported as a reportable condition in the FY 1997 financial statement audit of the WCF (Office of the Inspector General Report No. 98-08A) and management projects final resolution of this issue during Fiscal Year 1999. The auditee has documented progress towards resolving the unreconciled Treasury account.

The WCF noted as part of "Management's Overview" that 23 of the 39 mission critical systems are Year 2000 compliant and the WCF is at minimal risk. The Office of the Inspector General is unable to provide any assurance as to whether all mission critical systems will be compliant or that the WCF is at minimal risk.