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Working Capital Fund Annual Financial Statement
Fiscal Year 2002

Report No. 03-24
July 2003
Office of the Inspector General


The Working Capital Fund (WCF) is a revolving fund created primarily to provide certain administrative services to the Department on a centralized basis. The WCF is reimbursed by the Department's participating components for the cost of these services, which includes an amount for operating expenses of the fund. The WCF also serves as the custodian for amounts collected through civil debt litigation and has the authority to retain up to three percent of these collections. The WCF does not receive appropriated monies from Congress, but is allowed to receive unobligated prior year appropriations from other Department of Justice components. Amounts transferred to the WCF may be used by the Department for the acquisition or improvement of automated systems and capital equipment.

This audit report contains the financial statement of the WCF for the fiscal years ended September 30, 2002 and 2001. Under the direction of the Office of the Inspector General, the audit was performed by PricewaterhouseCoopers LLP. The audit resulted in an unqualified opinion on the FY 2002 financial statements. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and results of operations of the entity. For FY 2001, the WCF also received an unqualified opinion on its financial statements (OIG Report 02-24).

The Report on Internal Control identified one new material weakness in the WCF's accounting procedures for preparing its financial statements. Specifically, the auditors noted errors in the status of obligations, earned revenues not invoiced timely, inadequate documentation to support account balances, and the WCF property management system required redundant data entry. As a result, timely and accurate information is not available to management throughout the year, and there is a risk that the WCF will not meet the accelerated financial statement reporting deadlines in future years. The audit had reported no reportable conditions or material weaknesses for FY 2001.

In their Report on Compliance with Laws and Regulations, the auditors concluded that the WCF's financial management systems did not substantially comply with federal financial management systems requirements and applicable federal accounting standards as required by the FFMIA. No compliance issues had been reported for FY 2001.