The Chief Financial Officers Act of 1990, as amended, requires an annual independent audit and report on the U.S. Small Business Administration’s (SBA’s) consolidated financial statements. SBA OIG contracted with the independent certified public accounting firm KPMG LLP to conduct an audit of SBA’s consolidated balance sheets as of September 30, 2022 and 2021, and the related notes to these statements. Our contract with KPMG required that the audit be performed in accordance with auditing standards generally accepted in the United States of America, Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin No. 22-01, Audit Requirements for Federal Financial Statements. In the audit, KPMG reported significant matters for which they were unable to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on SBA’s balance sheet as of September 30, 2022. Accordingly, KPMG issued a disclaimer of opinion on the consolidated balance sheets as of September 30, 2022 and 2021. The basis for the disclaimer was that due to inadequate processes and controls, SBA was unable to provide adequate evidential matter in support of a significant number of transactions and account balances related to the Paycheck Protection Program, Economic Injury Disaster Loan program, the Restaurant Revitalization Fund, and Shuttered Venue Operators Grant program. As a result, KPMG was unable to determine whether any adjustments might have been necessary with respect to the following: • Credit Program Receivables and Related Foreclosed Property, Net • Other than Intragovernmental Advances and Prepayments • Downward Reestimate Payable to Treasury • Loan Guarantee Liabilities For the period ended September 30, 2022, KPMG identified six material weaknesses and two significant deficiencies in internal control over financial reporting. Appendixes I and II of this report describe details of KPMG’s conclusions about the material weaknesses and significant deficiencies. Appendix III describes instances of noncompliance with applicable laws or other matters required to be reported under Government Auditing Standards or OMB Bulletin No. 22-01.
Tuesday, November 15, 2022
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