We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall general purpose financial statement presentation. We believe that our audit and the reports of other auditors provides a reasonable basis for our opinion.

In our opinion, based on our audit and the reports of other auditors, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Government at June 30, 1999, and the results of its operations and the cash flows of its proprietary fund types and nonexpendable trust funds for the year then ended in conformity with generally accepted accounting principles. Also, in our opinion, the combining and individual fund and account group financial statements and schedules, present fairly, in all material respects, the financial position of each of the individual funds and account groups of the Government at June 30, 1999, and the results of operations of such funds and the cash flows of individual proprietary and nonexpendable trust funds for the year then ended in conformity with generally accepted accounting principles.

The year 2000 supplementary information on pages A-86 through A-89 is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board, and we did not audit and do not express an opinion on such information. Further, we were unable to apply to the information certain procedures prescribed by professional standards because of the unprecedented nature of the year 2000 issue and its effects, and the fact that authoritative measurement criteria regarding the status of remediation efforts have not been established. In addition, we do not provide assurance that the Government is or will become year 2000 compliant, that the Government's year 2000 remediation efforts will be successful in whole or in part, or that parties with which the Government does business are or will become year 2000 compliant.

Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements and on the combining and individual fund and account group financial statements and schedules taken as a whole. The accompanying financial information listed as supplemental schedules in the foregoing table of contents (pages L-2 through L45) is presented for the purpose of additional analysis and is not a required part of the financial statements of the Government. The supplemental schedules are also the responsibility of the management of the Government. Such additional information has been subjected to the auditing procedures applied in our audit of the general purpose, combining, and individual fund and account group financial statements and schedules and, in our opinion, based upon our audit and the reports of other auditors, is fairly stated in all material respects when considered in relation to the financial statements of each of the respective individual funds and account groups taken as a whole. - ~ ,

In accordance with Government Auditing Standards, we have also issued our report dated October 31, 1999, on our consideration of the Government' s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants.

The statistical data on pages M-2 through M-32 are presented for the purpose of additional analysis and is not a required part of the general purpose financial statements of the Government. Such additional information has not been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, accordingly, we express no opinion on it.