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.

As required by the Government Management Reform Act of 1994, we audited the
U.S. Department of Energy's (Department) consolidated financial statements as of and for
the years ended September 30, 1998 and 1997 to determine whether they presented fairly,
in all material respects, the Department's financial position, net cost, changes in net
position, budgetary resources, financing activities, and custodial activities in conformity
with Federal accounting standards. As part of this Departmentwide effort, we examined
internal controls, assessed compliance with applicable laws and regulations, and tested
selected account balances at Headquarters and at a number of field activities. The results of our audit are included in Audit Report No. IG-FS-99-01 issued February 25, 1999. Additional management-level reports addressing local issues are being issued to field elements.