Office of Justice Programs
Annual Financial Statement
Fiscal Year 1999
Report No. 00-14
June 22, 2000
Office of the Inspector General
As the granting arm of the Department of Justice, the Office of Justice Programs' (OJP) mission is to provide federal leadership in developing the nation's capacity to prevent and control crime, improve the criminal and juvenile justice systems, increase knowledge about crime and related issues, and assist crime victims by establishing and supporting various programs aimed at improving the overall effectiveness of the criminal justice system.
This audit report contains the Annual Financial Statement of the OJP for the fiscal year ended September 30, 1999. The audit was performed by KPMG LLP and resulted in an unqualified opinion. An unqualified opinion means that the financial statements present fairly, in all material respects, the financial position and results of operations of the entity. For FY 1998, the OJP received an unqualified opinion on its balance sheet and a disclaimer of opinion on the other financial statements (OIG Report 99-17).
The OJP continued improving in its ability to meet federal financial reporting requirements as evidenced by its unqualified opinion. However, there are areas that still warrant management's attention, including a material weakness on the grant accrual process. The grant accrual process has been historically problematic for OJP and was previously cited as a material weakness in its FY 1996 and FY 1997 financial statement audits. The current audit found that OJP did not have controls in place to ensure data integrity during the accrual process which prevented them from producing accurate year-end estimates of grant related account balances in a timely matter. The auditors' report on internal controls also includes reportable conditions on financial reporting deficiencies, lack of intragovernmental reconciliation policies and procedures, Crime Victims Fund accounting, inappropriate recording of allocation transfer, and electronic data processing general controls.
In its Report on Compliance with Laws and Regulations, the auditors reported that the OJP's financial management systems did not substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996. The auditors specifically cited issues included in the grant accrual material weakness as causing this noncompliance.
Similar to the prior year, OJP's Annual Financial Statement consists of a balance sheet, statement of net cost, statement of changes in net position, statement of budgetary resources, and statement of financing. However, comparative financial statements were not required this year and are therefore not presented.