Office of Justice Programs Annual Financial Statement, Fiscal Year 2006
Audit Report 07-21
Office of the Inspector General
This audit report contains the Annual Financial Statement of the Office of Justice Programs (OJP) for the fiscal years (FY) ended September 30, 2006, and September 30, 2005. Under the direction of the Office of the Inspector General (OIG), the audit was performed by KPMG LLP (KPMG) and resulted in an unqualified opinion for FY 2006. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and the results of operations. OJP also received an unqualified opinion on its FY 2005 financial statements (OIG Report No. 06-17).
In its FY 2006 Report on Internal Control, KPMG identified three reportable conditions, two of which were considered to be material weaknesses. All three reportable conditions are repeated from the FY 2003 restated report. The first material weakness relates to the general and application controls for electronic data processing. The auditors found weaknesses in all of the Government Accountability Office’s Federal Information System Controls Audit Manual areas: entity-wide security program, access controls, change controls, system software, service continuity, and application controls. The second material weakness relates to OJP’s process for estimating grant advances and payables. While the auditors found that OJP made significant improvement in addressing the prior year control finding, they noted that further improvement is still needed in OJP’s controls and methodology for quarterly estimating grant advance and payable amounts. The third reportable condition notes the need for improvements to the de-obligation and closeout process for grant undelivered orders.
In its Report on Compliance and Other Matters, KPMG reported that OJP’s financial management systems were not in compliance with the Federal Financial Management Improvement Act of 1996 (FFMIA) with regard to federal financial management systems requirements.
The OIG reviewed KPMG’s 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 OJP’s financial statements, conclusions about the effectiveness of internal control, conclusions on whether OJP’s financial management systems substantially complied with FFMIA, or conclusions on compliance with laws and regulations. KPMG is responsible for the attached auditor’s reports dated October 24, 2006, and the conclusions expressed in the reports. However, our review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards.
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