Federal Research

In reviewing the audit of SEMATECH's 1992 financial statements, GAO found no indication the Price Waterhouse's report on the internal control structure or its report on compliance with laws and regulations cannot be relied on. SEMATECH is a U.S. semiconductor manufacturer-Defense Department (DOD) consortium that seeks to advance semiconductor manufacturing technology. In January 1993, DOD began providing advance payments to SEMATECH on a monthly instead of a quarterly basis. This procedure, adopted in response to an earlier GAO recommendation, appears to provide enough working capital funds while minimizing the amount of unexpended government funds that SEMATECH holds.

GAO found that: (1) there is no indication that the auditor's opinion on SEMATECH's 1992 financial statements, its report on the internal control structure, or its report on compliance with laws and regulations cannot be relied upon; (2) the financial statements fairly presented SEMATECH's financial position in conformance with generally accepted accounting principles; (3) in January 1993, the Department of Defense began providing advance payments to SEMATECH on a monthly basis; and (4) this procedure provides SEMATECH with sufficient working capital funds while minimizing the amount of unexpended government funds that SEMATECH holds.