Independent Auditors’ Report on SBA’s FY 2019 Financial Statements

OIG contracted with the independent certified public accounting firm KPMG LLP (KPMG) to audit the U.S. Small Business Administration’s (SBA’s) consolidated financial statements as of and for the fiscal year ended September 30, 2019. This audit is an annual requirement of the Chief Financial Officers Act of 1990, as amended, and was conducted in accordance with generally accepted government auditing standards; the Office of Management and Budget Bulletin No. 19-03, Audit Requirements for Federal Financial Statements; and the U.S. Government Accountability Office’s Financial Audit Manual and Federal Information System Controls Audit Manual.

The attached independent auditors’ report presents an unmodified opinion on SBA’s consolidated financial statements for fiscal year 2019. Specifically, KPMG reported that

• the financial statements were fairly presented, in all material respects, in accordance with U.S. generally accepted accounting principles;
• there were no instances in which SBA’s financial management systems did not substantially comply with the Federal Financial Management Improvement Act of 1996 (FFMIA);
• there is one material weakness related to internal control over financial reporting where improvement is needed in SBA’s risk assessment processes;
• there is a significant deficiency related to disaster loan processing controls; and
• there is also a significant deficiency related to SBA’s information technology security controls, which has been identified in the past.

Details regarding KPMG’s conclusions are included in attachments I and II to this report. Within 30 days of this report, KPMG expects to issue a separate letter to SBA management regarding other, less significant matters that came to its attention during the audit.