Audit Report: DOE-OIG-18-02

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October 13, 2017

Southwestern Federal Power System’s Fiscal Year 2016 Financial Statement Audit

This report presents the results of the independent certified public accountants’ audit of the Southwestern Federal Power System’s (SWFPS) combined balance sheets, as of September 30, 2016 and 2015, and the related combined statements of changes in capitalization, revenues and expenses, and cash flows for the years then ended.

To fulfill the Office of Inspector General’s audit responsibilities, we contracted with the independent public accounting firm of KPMG LLP to conduct the audit, subject to our review.  KPMG LLP concluded that the combined financial statements present fairly, in all material respects, the respective financial position of SWFPS as of September 30, 2016 and 2015, and the results of its operations and its cash flow for the years then ended, in conformity with United States generally accepted accounting principles.

As part of this review, the auditors also considered SWFPS’s internal control 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 determination of financial statement amounts.  The audit identified the following significant deficiency in internal control over financial reporting:

• An internal control deficiency over accrued expenses was identified where goods and services were not properly accrued for.

Topic: Management & Administration