Independent Auditors’ Report on SBA's FY 2018 Financial Statements

We contracted with the independent certified public accounting firm KPMG LLP (KPMG) to audit the U.S. Small Business Administration’s (SBA’s) consolidated financial statements for fiscal year (FY) 2018, ending September 30, 2018. This audit is an annual requirement of the Chief Financial Officers Act of 1990 and was conducted in accordance with generally accepted government auditing standards; the Office of Management and Budget Bulletin No. 19-01, Audit Requirements for Federal Financial Statements; and the U.S. Government Accountability Office’s Financial Audit Manual and Federal Information System Controls Audit Manual. The independent auditors’ report presents an unmodified opinion on SBA’s consolidated financial statements for FY 2018. Specifically, KPMG reported that

• the financial statements were fairly presented, in all material respects, in accordance with U.S. generally accepted accounting principles;
• there were no material weaknesses in internal control;
• there were no instances in which SBA’s financial management systems did not substantially comply with the Federal Financial Management Improvement Act of 1996; and
• there is a significant deficiency related to SBA’s information technology security controls, which has been identified in the past.

Details regarding KPMG’s conclusions are included in Attachment I to this report. KPMG made nine recommendations to strengthen controls over SBA’s information technology security environment. The Agency agreed to implement the recommendations.