Audit Report 13-04: Audit of SBA’s FY 2012 Financial Statements
Date Issued: Wednesday, November 14, 2012
Report Number: 13-04

The OIG contracted with the independent public accounting firm, KPMG LLP (KPMG), to audit the U.S. Small Business Administration’s consolidated financial statements as of September 30, 2012, and for the years then ended.  The contract required that the audits be conducted in accordance with Generally Accepted Government Auditing Standards; the Office of Management and Budget Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended; and the U.S. Government Accountability Office’s Financial Audit Manual and Federal Information System Controls Audit Manual.  This audit is an annual requirement of the Chief Financial Officers Act of 1990.

The auditor’s report includes an opinion on SBA’s financial statements, internal control over financial reporting, and compliance and other matters that have a direct and material effect on the financial statements.  The auditor issued an unqualified opinion on SBA’s fiscal year 2012 consolidated financial statements.  In summary, the auditor found that:

The financial statements were fairly presented, in all material aspects, in conformity with U.S. generally accepted accounting principles.

  • There were no material weaknesses in internal control.
  • There is a significant deficiency related to SBA’s information technology security controls, which is a repeat condition.
  • There is one instance of noncompliance with laws and regulations related to the Debt Collection Improvement Act of 1996, which is also a repeat condition.

The report also includes one other matter related to possible violations of the Federal Acquisition Regulation’s documentation retention requirements.  Details regarding the auditor’s conclusions are included in the “Compliance and Other Matters” section of the Independent Auditors’ Report.  Within 30 days of this report, the auditor expects to issue a separate letter to management regarding other less significant matters that came to its attention during the audit.

The OIG provided a draft of the auditor’s report to SBA’s Chief Financial Officer (CFO) who concurred with its findings and recommendations and agreed to implement the 24 recommendations.  The CFO is pleased that the SBA has again received an unqualified audit opinion and believes these results accurately reflect the quality of the Agency’s financial statements and its improved accounting, budgeting, and reporting processes.