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Report of Independent Auditors
Board of TrusteesUniversity of Puerto RicoWe have audited the accompanying financial statements of the business-type activities and theaggregate discretely presented component units of the University of Puerto Rico (the University), acomponent unit of the Commonwealth of Puerto Rico, as of and for the years ended June 30, 2007 and2006, which collectively comprise the University’s financial statements, as listed in the table of contents. These financial statements are the responsibility of the University’s management. Our responsibility is to express opinions on these financial statements based on our audits. We did not auditthe financial statements of Servicios Médicos Universitarios, Inc. (the Hospital) and DesarrollosUniversitarios, Inc. (the Company), which represent 100% of the aggregate discretely presentedcomponent units, as of and for the years ended June 30, 2007 and 2006 and March 31, 2007 and 2006,respectively. Those financial statements were audited by other auditors whose reports thereon have been furnished to us. The Hospital’s report included an explanatory paragraph stating that it hasexperienced recurring losses since it commenced operations and has a net capital deficiency that raisesubstantial doubt about its ability to continue as a going concern. Our opinion, insofar as it relates toamounts included for the Hospital and the Company, is solely based on the reports of the other auditors.We conducted our audits in accordance with auditing standards generally accepted in the United Statesand the standards applicable to financial audits contained in
Government Auditing Standards,
issued bythe Comptroller General of the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. We were not engaged to perform an audit of the University’s internal control over financial reporting. Our audit included 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 University’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basisfor our opinions.In our opinion, based on our audits and the reports of other auditors, the financial statements referred toabove present fairly, in all material respects, the respective financial position of the University of PuertoRico and the aggregate discretely presented component units of the University of Puerto Rico as of June 30, 2007 and 2006, and the respective changes in financial position and cash flows thereon for theyears then ended in conformity with accounting principles generally accepted in the United States.As discussed in Note 13 to the financial statements, the Hospital has experienced recurring losses sinceit commenced operations and has a net capital deficiency that raise substantial doubt about its ability tocontinue as a going concern.