HENRY
BROS. ELECTRONICS, INC. AND SUBSIDIARIES




EXHIBIT
99




AUDIT
COMMITTEE REPORT




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




·
            the
      integrity of the financial statements of Henry Bros. Electronics,
      Inc.,


·
            the
      independent auditor’s qualifications and
  independence,


·
            the
      performance of the independent auditors of Henry Bros. Electronics, Inc.,
      and


·
            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
NASDAQ listing standards. That is, the Board of Directors has determined that
none of Messrs. Sands, Power and Rockwell 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.




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HENRY
BROS. ELECTRONICS, INC. AND SUBSIDIARIES




This
year, we reviewed Henry Bros. Electronics, Inc.’s audited financial statements
as of and for the year ended December 31, 2008, and met with both management and
Amper, Politziner & Mattia, LLP, 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.




We have
received from Amper, Politziner and Mattia, LLP 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
Amper, Politziner and Mattia, LLP 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, 2008.




AUDIT
COMMITTEE:


David
Sands (Chair)


James W.
Power


Richard
D. Rockwell




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