August 9, 2022

The Southwestern Federal Power System’s Fiscal Year 2021 Combined Financial Statements Audit

To fulfill the Office of Inspector General’s audit responsibilities, we contracted with the independent public accounting firm of KPMG LLP (KPMG) to conduct the audit, subject to our review.

The attached report presents the results of the independent certified public accountants’ audit of the Southwestern Federal Power System’s combined balance sheets, as of September 30, 2021, and 2020, and the related combined statements of revenues and expenses, changes in capitalization, and cash flows for the years then ended.

KPMG is responsible for expressing an opinion on the Southwestern Federal Power System’s financial statements and reporting on applicable internal controls and compliance with laws and regulations.  The Office of Inspector General monitored audit progress and reviewed the audit report and related documentation.  This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards.

KPMG concluded that the combined financial statements present fairly, in all material respects, the financial position of the Southwestern Federal Power System as of September 30, 2021, and 2020, and the results of its operations and cash flows for the year then ended in accordance with United States generally accepted accounting principles.

As part of this audit, auditors also considered the Southwestern Federal Power System’s internal controls over financial reporting and tested for compliance with certain provisions of laws, regulations, contracts, and grant agreements that could have a direct and material effect on the combined financial statements.  The audit did not identify any deficiency in internal controls over financial reporting that is considered a material weakness.  The results of the auditors’ review disclosed no instances of noncompliance or other matters required to be reported under Government Auditing Standards.