12825D FFIEC Draft audit report 3 7

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Financial Statements December 31, 2005 and 2004 (With Independent Auditors’ Report Thereon) KPMG LLP 2001 M Street, NW Washington, DC 20036 Independent Auditors’ Report on Financial Statements To the Federal Financial Institutions Examination Council: We have audited the accompanying balance sheets of the Federal Financial Institutions Examination Council (the Council) as of December 31, 2005 and 2004, and the related statements of revenues and expenses and changes in cumulative results of operations, and cash flows for the years then ended. These financial statements are the responsibility of the Council’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal ...