EXHIBIT
99

AUDIT
COMMITTEE REPORT

The Audit
Committee is appointed by the Board to assist the Board in monitoring:

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| |  | the
 integrity of the financial statements of Henry Bros. Electronics, Inc.,             
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| |  | the
 independent auditors qualifications and independence,                              
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| |  | the
 performance of the independent auditors of Henry Bros. Electronics, Inc., and       
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| |  | the
 compliance by Henry Bros. Electronics, Inc. with legal and regulatory
 requirements.

We meet with
management periodically to consider the adequacy of the internal controls of
Henry Bros. Electronics, Inc. and the objectivity of its financial reporting.
We discuss these matters with the independent auditors of Henry Bros.
Electronics, Inc. and with appropriate Company financial personnel.

We regularly
meet privately with the independent auditors who have unrestricted access to
the committee.

We select,
evaluate and, where appropriate, replace the independent auditor, and review
periodically their performance, fees and independence from management.

Each of the
Directors who serves on the committee is independent for purposes of the AMEX
listing standards. That is, the Board of Directors has determined that none of
Messrs. Sands, Ritorto and Power has a relationship with Henry Bros.
Electronics, Inc. that may interfere with his independence from Henry Bros.
Electronics, Inc. and its management.

The Board has
adopted a written charter setting out the audit related functions the committee
is to perform. The Board reviews the charter on an ongoing basis to assure that
the functions and duties of the Audit Committee will continue to conform to
such applicable SEC and stock exchange regulations as they may be amended or
modified in the future. The charter is available to shareholders on our
website, www.hbe-inc.com.

Management has
primary responsibility for the Companys financial statements and the overall
reporting process, including the Companys system of internal controls. The
independent auditors audit the annual financial statements prepared by
management, express an opinion as to whether those financial statements fairly
present the financial position, results of operations and cash flows of the
Company in conformity with accounting principles generally accepted in the
United States and discuss with us any issues they believe should be raised with
us. We monitor these processes, relying without independent verification on the
information provided to us and on the representations made by management and
the independent auditors.

This year, we
reviewed Henry Bros. Electronics, Inc.s audited financial statements as of and
for the year ended December 31, 2006, and met with both management and
Demetrius & Company, LLC, Henry Bros. Electronics, Inc.s independent
auditors, to discuss those financial statements. Management has represented to
us that the financial statements were prepared in accordance with accounting
principles generally accepted in the United States.

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We have
received from Demetrius & Company, LLC and discussed with them the written
disclosure and the letter required by Independence Standards Board Standard No.
1 (Independence Discussions with Audit Committees). These items relate to that
firms independence from the Company. We also discussed with Demetrius &
Company, LLC any matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).

Based on these
reviews and discussions, we recommended to the Board that the Companys audited
financial statements be included in Henry Bros. Electronics, Inc.s Annual
Report on Form 10-K for the year ended December 31, 2006.

AUDIT
COMMITTEE:

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|-----------------
|David Sands      
|                 
|Joseph P. Ritorto
|                 
|James W. Power   

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