The Southwestern Federal Power System’s Fiscal Year 2025 Combined Financial Statements Audit

September 25, 2026

The Southwestern Federal Power System’s Fiscal Year 2025 Combined Financial Statements Audit

This audit was performed by the independent public accounting firm of KPMG LLP (KPMG) on behalf of the Department of Energy Office of Inspector General.

The audit’s objective was to obtain reasonable assurance about whether the financial statements, as a whole, were free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that included an opinion.

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 audited the combined balance sheets of the Department’s Southwestern Federal Power Systems (SWFPS) as of September 30, 2025, and 2024, and the related combined statements of changes in capitalization, revenues and expenses, and cash flows for the years then ended, and the related notes to the combined financial statements.

KPMG concluded that the financial statements present fairly, in all material respects, the financial position of SWFPS as of September 30, 2025, and 2024, and the results of its operations and its cash flows for the years then ended, in accordance with U.S. generally accepted accounting principles. KPMG also considered SWFPS’ internal control over financial reporting as part of its review and continued to identify a significant deficiency over entity-level controls related to the lack of formal policies, procedures, or documented responsibilities used to generate SWFPS’ financial statements. KPMG tested for compliance with certain provisions of laws, regulations, contracts, and grant agreements that could have a direct material effect on the financial statements. The results of the auditors’ review disclosed no instances of noncompliance or other matters required to be reported under Government Auditing Standards, applicable Office of Management and Budget guidance, or the Federal Financial Management Improvement Act of 1996.

The Office of Inspector General issued Notices of Findings and Recommendations to management throughout the audit. All findings and recommendations will be detailed in a separate management letter that will be provided to the Southwestern Power Administration. There are no formal recommendations that need to be tracked in the Departmental Audit Report Tracking System. An additional response is not required.