Report of Independent Auditors - Cover Letter

November 10, 2008

MEMORANDUM FOR:		Jon W. Dudas Under Secretary of Commerce for Intellectual Property and     Director of the U.S. Patent and Trademark Office
FROM:		Todd J. Zinser
SUBJECT:		FY 2008 Financial Statements Final Audit Report No. FSD-19049-9-0002

I am pleased to provide you with the attached audit report required by the Chief Financial Officers Act of 1990, as amended, which presents an unqualified opinion on the U.S. Patent and Trademark Office’s FY 2008 financial statements. The audit results indicate that the Department has established an internal control structure that facilitates the preparation of reliable financial and performance information.

The independent public accounting firm of KPMG LLP performed the audit of USPTO’s financial statements for the fiscal year ended September 30, 2008. The contract required that the audit be performed in accordance with U.S. generally accepted government auditing standards and Office of Management and Budget Bulletin 07-04, Audit Requirements for Federal Financial Statements, as amended.

In its audit of 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 two significant deficiencies related to controls over general information technology and receipts accounting segregation of duties, which were not considered material weaknesses in internal controls as defined in the audit report; and
• 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.

My office oversaw the audit’s 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 7, 2008, and the conclusions expressed in the report.

In accordance with Department Administrative Order 213-5, Audit Resolution and Follow-up, please provide us with an audit action plan that addresses the report recommendation related to receipts accounting segregation of duties within 60 days of the date of this memorandum. The plan is not required to address the significant deficiency related to financial management system weaknesses. Instead, we ask that you provide an audit action plan addressing the related specific recommendations included in the separate, limited-distribution information technology general controls report (FSD-19049-9-0001).

If you wish to discuss the contents of this report, please call me on (202) 482-4661, or Judith J. Gordon, Assistant Inspector General for Audit and Evaluation, on (202) 482-2754. We appreciate the cooperation and courtesies 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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