DOT FY'06 and FY'05 Consolidated Financial Statements
On November 15, as required by the Chief Financial Officer Act, we issued our audit of DOT's consolidated financial statements for FY 2006 and FY 2005. We concluded that DOT's consolidated financial statements are fairly presented and, in all material respects, in conformity with generally accepted accounting principles, with one exception. That exception concerns the FY 2006 Construction in Progress (CIP) account balance. KPMG LLP, under contract to us and under our supervision, audited the Federal Aviation Administration's (FAA) financial statements and rendered a qualified opinion because FAA was unable to provide sufficient evidence to support the accuracy and completeness of the CIP account balances. Because FAA's property, including CIP, represents about 95 percent of the Property, Plant and Equipment line item on the Department's consolidated balance sheet, the Department's consolidated financial statements must be similarly qualified. In addition, we identified seven reportable conditions, three instances of noncompliance with applicable laws and regulations, and two material internal control weaknesses-FAA's CIP processing and the Highway Trust Fund agencies' financial management, reporting, and oversight. The Department's complete Financial Statements are included in DOT's FY 2006 Performance and Accountability Report, which also contains a copy of our report beginning on page 253.