Report of Independent Auditors – Cover Letter

November 10, 2009

MEMORANDUM FOR:		David Kappos Under Secretary of Commerce for Intellectual Property and     Director of the U.S. Patent and Trademark Office
FROM:		Todd J. Zinser
SUBJECT:		FY 2009 Financial Statements Final Audit Report No. FSD-19650-0-0002

I am pleased to provide you with the attached audit report, which presents an unqualified opinion on the U.S. Patent and Trademark Office’s FY 2009 financial statements. The audit results indicate that USPTO has established an internal control structure that facilitates the preparation of reliable financial and performance information.

KPMG LLP, an independent public accounting firm, performed the audit of USPTO’s financial statements for the fiscal year ended September 30, 2009. The contract with KPMG 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 was one significant deficiency related to controls over general information technology, which was not considered a material weakness in internal control as defined in the audit report;
• there were no instances of material noncompliance with laws, regulations, and contracts; 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 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, regulations, and contracts. KPMG is solely responsible for the attached audit report dated November 5, 2009, and the conclusions expressed in the report.

An audit action plan is not required to address the significant deficiency reported by KPMG. However, we ask that you provide a plan addressing the related specific recommendations included in the separate, limited-distribution information technology general controls report (FSD-19650-0-0001) in accordance with Department Administrative Order 213-5, Audit Resolution and Follow-up.

If you wish to discuss the contents of this report, please call me at (202) 482-4661, or Dr. Brett M. Baker, assistant inspector general for audit, at (202) 482-2600.

We appreciate the cooperation and courtesies USPTO extended to KPMG and my staff during the audit.

Attachment

cc:

Mark J. Olechowski Acting Chief Financial Officer U.S. Patent and Trademark Office John F. Charles Acting Chief Financial Officer and Acting Assistant Secretary for Administration Department of Commerce

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