Report of Independent Auditors - Cover Letter

November 6, 2007

MEMORANDUM FOR:		Jon W. Dudas Under Secretary of Commerce for Intellectual Property and     Director of the U.S. Patent and Trademark Office
FROM:		Elizabeth T. Barlow Acting Inspector General
SUBJECT:		USPTO's FY 2007 Financial Statements Audit Report No. FSD-18531-8-0002

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 2007 financial statements. The audit results indicate that USPTO’s internal controls facilitate the preparation of reliable financial and performance information. We commend USPTO for attaining an unqualified opinion for the 15th consecutive year.

The independent public accounting firm of KPMG LLP performed the audit of USPTO’s financial statements for the fiscal year ended September 30, 2007. The contract required that the audit be done 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.

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 no material weaknesses in internal controls, as defined in the independent auditors’ report;
• there were no instances in which the USPTO’s financial management systems did no substantially comply with the requirements of the Federal Financial Management Improvement Act of 1996;
• there was one potential violation of the Anti-Deficiency Act and the Patent and Trademark Fee Fairness Act of 1999 during FY 2005 that is being reviewed by the Department of Commerce’s Office of General Counsel. However, a conclusion has not yet been reached.

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 6, 2007, 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 John Seeba, Assistant Inspector General for Auditing, on (202) 482-5910. 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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