Audit Report 7-04: GFRS for Fiscal Year 2005
Date Issued: Friday, November 17, 2006
Report Number: 7-04

On November 17, 2006, the OIG issued the Independent Public Accountant or IPA’s report on special-purpose financial statements in Audit Report 7-04, GFRS for Fiscal Year 2005.  The auditor found that the special purpose financial statements presented fairly in all material respects, the financial position of the SBA as of September 30, 2006, and the results of operations, and changes in net position for the period then ended in conformity with generally accepted accounting principles.  The IPA’s audit of the consolidated financial statement of the SBA as of and for the year ended September 30, 2006, disclosed the following reportable conditions:  (1) improvement needed surrounding controls over the financial reporting process, which they consider to be a material weakness; (2) improvement needed in management’s information technology security controls, and (3) improvement needed in budgetary controls surrounding obligations.  The IPA also noted two instances of noncompliance, specifically, that the SBA (1) is not in full compliance with the Federal Information Security management Act, and (2) financial management systems are not in substantial compliance with the Federal Financial management Improvement Act of 1996.