Filed by sedaredgar.com - U.S. Geothermal Inc. - Exhibit 10.41






Report of Independent Registered Public Accounting Firm


To the Board of Directors and 
Stockholders of U.S.
Geothermal Inc. 

We have audited U.S. Geothermal Inc.’s internal control over
financial reporting as of March 31, 2008, based on criteria established in
Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). U.S. Geothermal
Inc.’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility
is to express an opinion on the company’s internal control over financial
reporting based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in
all material respects. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audit also included performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides
a reasonable basis for our opinion. 

A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit the preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements. 

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. 

A material weakness is a control deficiency, or combination of
control deficiencies, in internal control over financial reporting, such that
there is a reasonable possibility that a material misstatement of the company’s
annual or interim financial statement will not be prevented or detected on a
timely basis. The following material weakness has been identified and included
in management’s assessment: 

Stock Option Valuation

Controls over the stock option valuation process have not been
appropriately designed. Controls within the process rely heavily on both the
expertise of a single individual, and a third-party-administered option
valuation tool. Management has not implemented appropriate internal procedures
to ensure that the data provided by the system is reliable, including
appropriate monitoring and review procedures for data being entered into and
utilized by the system in the valuation of stock options. Documentation of the
verification of model assumptions and data utilized by the model, such as stock
price, did not exist. As a result, errors in the valuation of stock options were
not detected by the Company’s controls and an adjustment was identified by the
auditors.

This material weakness was considered in determining the
nature, timing, and extent of audit tests applied in our audit of the 2008
financial statements, and this report does not affect our report dated June 9,
2008, on those financial statements. 




In our opinion, because of the effect of the material weakness
described above on the achievement of the objectives of the control criteria,
U.S. Geothermal Inc. has not maintained effective internal control over
financial reporting as of March 31, 2008, based on criteria established in
Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the balance sheets
and the related statements of income, stockholders’ equity and comprehensive
income, and cash flows of U.S. Geothermal Inc., and our report dated June 9,
2008, expressed an unqualified opinion. 

 


Williams & Webster, P.S. 
Spokane, Washington

June 9, 2008