United States Marshals Service
Annual Financial Statement
Fiscal Year 2001

Report No. 02-39
September 2002
Office of the Inspector General


The United States Marshals Service (USMS) is a component of the Department of Justice. Its mission is to protect the federal courts and ensure the effective operation of the federal judicial system. The USMS operations are organized into two major business lines: (1) detention and incarceration, and (2) protection of the federal judiciary and improvement of the justice system. In FY 2001, the USMS appropriation was $592.8 million, an 8.4 percent increase from the FY 2000 funding level of $546.5 million.

This audit report contains the Annual Financial Statement of the USMS for the fiscal years ended September 30, 2001 and 2000. Under the direction of the Office of the Inspector General (OIG), Urbach Kahn & Werlin LLP performed the audit, which resulted in an unqualified opinion. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and results of operating activity of the entity. The USMS also received an unqualified opinion for its FY 2000 financial statements (OIG Report 01-30).

During FY 2001, the USMS made improvements in its financial reporting process but weaknesses still existed. The auditors continue to report a material weakness in the USMS's information systems control environment. In assessing controls over the financial statements, the auditors identified systems control weaknesses with regard to entity-wide security program planning and management, access controls, application software development and change control, and service continuity.

The auditors also noted two reportable conditions related to the USMS internal control structure. First, the USMS accounting system is not adequate to record accrual accounting transactions in accordance with federal standards. Additionally, the auditors continue to report that improvements are needed in the financial statement preparation process.

In the Report on Compliance with Laws and Regulations, the auditors reported that the USMS's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996. The auditors found that the financial management systems did not meet federal financial systems requirements.