This final audit report prepared by KPMG Peat Marwick, independent public accountants, presents the results of their audit of the Public Health Service's (PHS) Service and Supply Fund (Fund) financial statements for the Fiscal Year ended September 30, 1992. The independent auditors did not express an opinion on the Fund's statement of financial position because they were not able to satisfy themselves regarding the reported balances for all of the Fund's assets and equity and 65 percent of its liabilities. Also, the Fund did not perform certain internal control procedures and maintain adequate accounting records. These conditions also precluded the auditors from expressing an opinion on the Fund's statements of operations, cash flows, and budget and actual expenses. The report contains recommendations for significantly improving financial management of the Fund.