As required by the Government Management Reform Act of 1994, we audited the U.S. Department of Energy's (Department) consolidated financial statements as of and for the years ended September 30, 1998 and 1997 to determine whether they presented fairly, in all material respects, the Department's financial position, net cost, changes in net position, budgetary resources, financing activities, and custodial activities in conformity with Federal accounting standards. As part of this Departmentwide effort, we examined internal controls, assessed compliance with applicable laws and regulations, and tested selected account balances at Headquarters and at a number of field activities. The results of our audit are included in Audit Report No. IG-FS-99-01 issued February 25, 1999. Additional management-level reports addressing local issues are being issued to field elements.