World Surveillance Group Inc (fka WSGI)

[followinsnsr]

Jetmek, you'r right Dohan & Co. did make comments about material controls:
For the year ended December 31, 2003, the Company's independent auditors, Dohan
and Company, CPA's, P.A. ("Dohan") advised management and the Board of Directors
by a letter dated March 30, 2004, that in connection with its audit of the
Company's consolidated financial statements for the year ended December 31,
2003, it noted certain matters involving internal control and its operation that
it considered to be a material weakness under standards established by the
American Institute of Certified Public Accountants. Reportable conditions are
matters coming to an independent auditors' attention that, in their judgment,
relate to significant deficiencies in the design or operation of internal
control and could adversely affect the organization's ability to record,
process, summarize, and report financial data consistent with the assertions of
management in the financial statements. Further, a material weakness is a
reportable condition in which the design or operation of one or more internal
control components does not reduce to a relatively low level the risk that
errors or fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period by
employees in the normal course of performing their assigned functions. Dohan
advised management and the Board of Directors that it considered the following
to constitute material weaknesses in internal control and operations: (i) the
Company's failure to adequately staff its finance group to effectively control
the increased level of transaction activity, address the complex accounting
matters and manage the increased financial reporting complexities and (ii) the
Company's current monthly close process does not mitigate the risk that material
errors could occur in the books, records and financial statements, and does not
ensure that those errors would be detected in a timely manner by the Company's
employees in the normal course of performing their assigned functions. Dohan
noted that these matters were considered by them during its audit and did not
modify the opinion expressed in its independent auditor's report dated March 30,
2004.

As noted above, the Company has made and is continuing to make changes in its
controls and procedures, including its internal control over financial
reporting, aimed at enhancing their effectiveness and ensuring that the
Company's systems evolve with, and meet the needs of, the Company's business. As
further noted above, the Company is also continually striving to improve its
management and operational efficiency and the Company expects that its efforts
in that regard will from time to time directly or indirectly affect the
Company's controls and procedures, including its internal control over financial
reporting. Toward these ends, the Company has added two more employees to its
accounting staff and has increased the utilization of its outside accounting
consultants.

Changes in Internal Control Over Financial Reporting

As the Company moves successfully forward along its various product lines, new
people have joined the Company while others have been assigned new and expanding
responsibilities. In addition to establishing up-to-date financial controls
throughout the Company to reflect this new organization and expanding market
development, GlobeTel has updated various standards and compliance measures to
reflect its emerging global presence.



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This includes a strict adherence to the Foreign Corrupt Practices act, an
updated and enhanced Code of Conduct and Business Ethics as well as its
Corporate Governance Statement. As an integral component of the financial
controls foundation, GlobeTel has established a Financial Reporting and Controls
Committee that addresses all financial control issues on an on-going basis and
makes its recommendations directly to the CEO. This Committee, headed by the
CFO, includes information technology (IT), both internal as well as external
procedures for all security and integrity issues, and their relationship to
enhancing the overall financial reporting, controls and back-up systems as
needed.

There have been no other significant changes in the Company's internal controls,
other than the improvements discussed above, or in other factors that could
significantly affect internal controls subsequent to the date of the evaluation.

http://investor.globetel.net/phoenix.zhtml?c=67726&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd...