Message from the Chief Financial Officer

I am pleased to present the United States Patent and Trademark Office's fiscal year 2004 audited financial statements, which are an integral component of our PAR. This annual report to the American people highlights our fiscal stewardship, our significant accomplishments, and the challenges we face as we strive to transform this agency and to keep pace with our ever-increasing workloads.

While the USPTO as a whole is changing to adapt to the 21st century, we have maintained our focus on accountability and our steadfast commitment to excellence in financial reporting. I am proud to report that the USPTO was awarded a second consecutive Association of Government Accountants Certificate of Excellence in Accountability Reporting for our fiscal year 2003 PAR. I am equally proud of receiving an unqualified opinion on the USPTO's financial statements for a 12th consecutive year. This “clean” opinion continues to be issued together with no material weaknesses or reportable conditions in our internal control structure as reported by our independent auditors.

Having attained a routine, reliable process for preparing financial statements, I am committed to taking financial management at the USPTO to the next level. Our goal is to provide useful and timely information to reflect financial and program performance results compared to plans on a continuing basis. Our primary focus is to continue to improve data that will result in better decision-making, improve utilization of resources, and support the PMA for competitive sourcing, improved financial performance, budget and performance integration, expanded electronic government, and strategic management of human capital.

We are also improving our workspace as we relocate to our new corporate headquarters in Alexandria, Virginia. The first phase of this move was completed in February 2004, when 2,100 people were moved. The final move phase is in progress, and will be completed by the spring of 2005, with more than 8,000 USPTO employees and contractors working at the new location. Our move to an efficiently configured and consolidated USPTO campus will help us achieve our goals by providing, for example, state-of-the-art technology that will aid in delivering better quality, higher productivity, and more responsive service to our customers.

This past year we overcame a deficiency that the Inspector General (IG) had identified that information technology (IT) security was a critical management and performance challenge facing the USPTO, because all of our critical systems had not been certified and accredited. I am pleased to say that we have now completed our efforts for the certification and accreditation of all mission-critical and classified information systems, and the USPTO received unconditional (full) authority to operate these systems in the current year.

During fiscal year 2004, the USPTO enhanced its Management Control Review Program by initiating an annual management control certification process that will require accountable managers in each major process area to certify that controls are in place, were monitored on a regular basis, and operated effectively for the fiscal year. The Management Control Review Program also consists of in-depth control reviews performed on a rotating basis such that each major process area is reviewed at least once in a four-year period. The reviews completed this past year concluded that there were no material weaknesses in internal controls and the controls were found to be consistent with identified best practices in each area.

Results of these management control reviews, coupled with improved operating efficiencies, external audits, and other evaluations, allow me to provide reasonable assurance that the USPTO's systems of internal accounting and administrative control fully comply with the requirements of the FMFIA of 1982.

In fiscal year 2005, the Administration, the U.S. House of Representatives and the U.S. Senate have shown support for providing full access to our projected fee income. Full access to our fees in fiscal year 2005 will allow the USPTO to fully fund the 21st Century Strategic Plan initiatives to transform the USPTO into a quality-driven, highly productive, and efficient organization that will promote expansion of business opportunities, stimulate research and development, and expand U.S. business globally.

Ultimately, the success of the USPTO's efforts to reinvent and improve the agency relies heavily on our employees. Human capital is our key resource with the greatest impact on the quality of our products and services. Managing our human capital is a critical, ongoing strategic management challenge. In this regard, we will continue to develop, sustain, and deploy a highly competent USPTO workforce. This will be accomplished by monitoring our core human competencies in areas such as intellectual property examination and IT development and support, by recruiting the best available candidates for new and vacated positions, and by providing appropriate training to improve the skills integral to the USPTO's success.

Let me conclude by stating that all of our efforts are focused on improving the quality of services that we provide to all of our customers. This commitment to customer service is the cornerstone of the USPTO, upon which the success of our growth and financial management is built.

Jo-Anne Barnard
Chief Financial Officer and
Chief Administrative Officer

November 8, 2004