Southern Federal Power Program combined financial statements, September 30, 1997 and 1996 with independent auditors` report thereon and financial overview and program performance

The report presents the results of the independent certified public accountants` audit of the Southeastern Federal Power Program`s (SEFPP) combined financial statements of assets; Federal investment and liabilities; and the related combined statements of revenues, expenses and accumulated net revenues, and cash flows. The auditors` report on SEFPP`s internal control structure disclosed no new reportable conditions directed to the Southeastern Power Administration. However, the report did disclose a reportable condition directed to the Army Corps of Engineers (Corps). The reportable condition was regarding the conversion of the Corps` financial management system to a system that was not designed to properly account for the allocation of plant investment to multi-purpose projects. The Corps concurred with recommendations made to correct the deficiency. The auditors` report on SEFPP`s compliance with laws and regulations disclosed no new instances of noncompliance. A noncompliance related to not recovering workers` compensation benefits in power rates reported in prior years remains uncorrected. Based on KPMG`s unqualified opinion and the review of their audit work, the Office of Inspector General believes the financial statements fairly present the financial condition and results of operations of the SEFPP for the period under audit