Management Letter: Internal Control Weaknesses SWFPS FY2024 Audit
Summary
The DOE Office of Inspector General issued Management Letter DOE-OIG-26-30 identifying internal control weaknesses during the Southwestern Federal Power System's fiscal year 2024 combined financial statements audit. KPMG LLP performed the audit on behalf of the OIG. Five findings and 17 recommendations were issued to Southwestern Power Administration addressing deficiencies in entity-level controls, post-retirement benefits, workers' compensation, personal protective equipment, and operation and maintenance expenses. Management concurred with all findings and described corrective actions taken or planned.
What changed
The DOE Office of Inspector General identified deficiencies in Southwestern Power Administration's internal controls over financial reporting during the FY2024 audit. The audit, conducted by KPMG LLP, found issues across five areas: entity-level controls, post-retirement benefits, workers' compensation, personal protective equipment, and operation and maintenance expenses. Five findings with 17 accompanying recommendations were formally issued to management.
Federal power administration entities should review the management letter to assess whether similar internal control weaknesses exist within their own operations. While management has concurred with findings and outlined corrective actions, compliance teams should use this audit as a benchmark for evaluating entity-level financial controls, benefits administration, and expense management processes.
What to do next
- Review and address the 5 internal control findings
- Implement corrective actions for the 17 recommendations
- Monitor progress on post-retirement benefits, workers' compensation, PPE, and O&M control deficiencies
Archived snapshot
Apr 14, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Management Letter: DOE-OIG-26-30
Internal Control Weaknesses Identified During the Southwestern Federal Power System’s Fiscal Year 2024 Combined Financial Statements Audit
April 13, 2026
April 8, 2026
Internal Control Weaknesses Identified During the Southwestern Federal Power System’s Fiscal Year 2024 Combined Financial Statements Audit
The Office of Inspector General engaged the independent public accounting firm of KPMG LLP (KPMG) to conduct the fiscal year 2024 combined financial statements audit of the Southwestern Federal Power System (SWFPS), subject to our review. As part of this audit, KPMG considered SWFPS’ internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing its opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of SWFPS’ internal control.
KPMG performed the audit in accordance with generally accepted government auditing standards.
During the audit, KPMG identified certain deficiencies in SWFPS’ internal control related to entity level controls, post-retirement benefits, workers’ compensation, personal protective equipment, and operation and maintenance expenses that are included in the attached management letter.
The attached letter contains 5 findings and 17 recommendations that were issued to Southwestern Power Administration during The Southwestern Federal Power System’s Fiscal Year 2024 Combined Financial Statements Audit. Management concurred with the findings and recommendations and had taken or planned to take corrective actions. Management’s responses are included with each finding.
- DOE-OIG-26-30.pdf (2.01 MB)
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