November 19, 2014

Western Federal Power System's Fiscal Year 2013 Financial Statement Audit

We contracted with the independent public accounting firm of KPMG, LLP (KPMG) to conduct the audit of the Western Federal Power System's (Western) combined balance sheets and report on Western's financial statements and reporting on applicable internal controls and compliance with laws and regulations. KPMG concluded that the combined financial statements present fairly, in all material respects, the respective financial position of Western as of September 30, 2013 and 2012, and the results of its operations and its cash flow for the years then ended, in conformity with United States generally accepted accounting principles.

The audit identified two deficiencies in internal control over financial reporting: a material weakness over Accounting for the Allocation of Accumulated Depreciation and a significant deficiency over information technology. Western management concurred with the findings and recommendations and agreed to take the necessary corrective actions.

Topic: Management & Administration