Federal Reports

Semiannual Report to Congress April 1, 2022 — September 30, 2022

The attached report presents the results of the independent certified public accountants’ audit of the Department of Energy’s consolidated financial statements as of September 30, 2022, and 2021, and the related consolidated statements of net cost, changes in net position, custodial activity, and combined statements of budgetary resources for the years then ended.To fulfill the Office of Inspector General’s (OIG) audit responsibilities, we contracted with the independent public accounting firm of KPMG LLP (KPMG) to conduct the audit, subject to our review. KPMG is responsible for expressing an opinion on the Department’s financial statements and reporting on applicable internal controls and compliance with laws and regulations. The OIG monitored audit progress and reviewed the audit report and related documentation. This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards. The OIG did not express an independent opinion on the Department’s financial statements.KPMG audited the consolidated financial statements of the Department as of September 30, 2022, and 2021, and the related consolidated statements of net cost, changes in net position, custodial activity, and combined statements of budgetary resources for the years then ended. KPMG concluded that these consolidated financial statements are presented fairly, in all material respects, in conformity with United States generally accepted accounting principles, and KPMG had issued an unmodified opinion based on its audits and the reports of other auditors for the years ended September 30, 2022, and 2021.As part of this audit, auditors also considered the Department’s internal controls over financial reporting and tested for compliance with certain provisions of laws, regulations, contracts, and grant agreements that could have a direct and material effect on the consolidated financial statements. The audit did not identify any deficiency in internal control over financial reporting that is considered a material weakness.

Tyler Deandre Johnson, a resident of Tampa, Florida, pleaded guilty on November 15, 2022, in the U.S. District Court, Middle District of Florida, to one count fraud and related activity in connection with access devices and one count aggravated identity theft. Johnson is a co-conspirator with Darius Lopez, another defendant in the case, who previously pleaded guilty to fraud and related activity in connection with access devices. This investigation is being conducted jointly with the GSA Office of Inspector General.

Results of the audit of the Commission’s financial statements forthe fiscal year ended September 30, 2022 and 2021

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.