Consolidated Financial Statements

In response to requirements established by the Government Management Reform Act of 1994, the Office of Inspector General engages the independent public accounting for of KMPG LLP to audit the Department of Energy's Fiscal Year (FY) 2006 consolidated balance sheet. The contractor was engages to audit only the balance sheet because a material weakness in financila control and reporting resulted in a disclaimer of opinion on the FY 2005 Audit of the Department's Consolidated Financial Statements.

Report o the Department of Energy's Fiscal Year 2005 Consolidated Financial Statements, OAS-FS-06-01

The Government Management Reform Act of 1994 requires that the Department of
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the Idaho
Operations Office (Idaho) and its then management and operating contractor for the Idaho
National Engineering and Environmental Laboratory (INEEL), Lockheed Martin Idaho
Technologies Company (Lockheed).1

The Government Management Reform Act of 1994 requires that the Department of
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the
Richland Operations Office (Richland); Office of River Protection (ORP); CH2M Hill Hanford
Group, Incorporated (CH2M Hill); Bechtel Hanford, Incorporated (Bechtel); and Fluor Hanford,
Incorporated (Fluor) and its subcontractors.
The audit disclosed an error, as of September 30, 1999, in the Environmental Liabilities
account. Richland's Environmental Liabilities account was understated because the cost estimates
for closure of single shell tank farms had not been updated to reflect current engineering estimates.
We recommended that Richland adjust the Environmental Liabilities account and that
management review other project cost estimates to determine if estimates were based on the best
available data. Management concurred with the recommendations and implemented corrective
actions.