Report of Independent Auditors' - Cover Letter

Memorandum header information

		NOV 6, 2006
MEMORANDUM FOR:		Jon W. Dudas Under Secretary of Commerce for Intellectual Property and     Director of the U.S. Patent and Trademark Office
FROM:		Johnnie E. Frazier
SUBJECT:		USPTO's FY 2006 Financial Statements Audit Report No. FSD-18003-7-0002

I am pleased to provide you with the attached audit report, which presents an unqualified opinion on the U.S. Patent and Trademark Office’s FY2006 financial statements. The audit results indicate that USPTO’s internal controls facilitate preparation of reliable financial and performance information. We commend USPTO for attaining an unqualified opinion for the 14th consecutive year and for meeting the fiscal year 2006 accelerated reporting deadline.

My office contracted with the independent public accounting firm of KPMG LLP (KPMG) to perform the audit of USPTO’s financial statements for the fiscal year ended September 30, 2006. The contract required that the audit be done in accordance with U.S. generally accepted government auditing standards and OMB Bulletin 06-03, Audit Requirements for Federal Financial Statements.

In its audit of the USPTO, KPMG found that:

• the financial statements were fairly presented, in all material respects and in conformity with U.S. generally accepted accounting principles;
• there were no material weaknesses in internal controls, as defined on page 2 of the audit report;
• there were no instances in which the USPTO’s financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996 and no instances of noncompliance with other laws and regulations tested.

My office defined the audit’s scope and oversaw its performance and delivery. We reviewed KPMG’s report and related documentation, and made inquiries of its representatives. Our review disclosed no instances where KPMG did not comply, in all material respects, with U.S. generally accepted government auditing standards.

However, our review cannot be construed as an audit in accordance with U.S. generally accepted government auditing standards. It was not intended to enable us to express, and we do not express, any opinion on USPTO’s financial statements, conclusions about the effectiveness of internal controls, or conclusions on compliance with laws and regulations. KPMG is solely responsible for the attached audit report dated November 6, 2006, and the conclusions expressed in the report.

If you wish to discuss the contents of this report, please call me on (202) 482-4661, or Elizabeth Barlow, Deputy Inspector General, on (202) 482-3516. We appreciate the cooperation and courtesies the USPTO extended to KPMG and my staff during the audit.

Attachment

cc:

Barry K. Hudson Chief Financial Officer U.S. Patent and Trademark Office Otto J. Wolff Chief Financial Officer and Assistant Secretary for Administration Department of Commerce

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