INDEPENDENT AUDITORS’ REPORT

Board of County Commissioners

Harnett County, North Carolina

We have audited the accompanying general purpose financial statements of Harnett County, North Carolina, as of and for the year ended June 30, 2001, as listed in the table of contents. These general purpose financial statements are the responsibility of Harnett County's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.

We conducted our audit 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 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 provides a reasonable basis for our opinion.

In our opinion, based on our audit, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of Harnett County, North Carolina, as of June 30, 2001, and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the general purpose financial statements, Harnett County adopted GASB Statement No. 33, “Accounting and Financial Reporting for Non-exchange Transactions.”

In accordance with Government Auditing Standards, we have also issued our report dated October 12, 2001, on our consideration of Harnett County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Governmental Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

Board of County Commissioners

Harnett County, North Carolina

Page 2

Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of Harnett County, North Carolina, taken as a whole. The combining individual fund and account group statements and schedules, as well as the accompanying schedule of expenditures of federal and state awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations and the State Single Audit Implementation Act, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole.

We did not audit the data included in the introductory and statistical sections of this report and, accordingly, we express no opinion on such data.

Fayetteville, North Carolina

October 12, 2001