Some necessary and sufficient conditions are obtained for the controllability and observability of a networked system with linear time invariant (LTI) dynamics. The topology of this system is fixed but arbitrary, and every subsystem is permitted to have different dynamic input-output relations. These conditions essentially depend only on transmission zeros of every subsystem and the connection matrix among subsystems, which makes them attractive in the analysis and synthesis of a large scale networked system. As an application, these conditions are utilized to characterize systems whose steady state estimation accuracy with the distributed predictor developed in (Zhou, 2013) is equal to that of the lumped Kalman filter. Some necessary and sufficient conditions on system matrices are derived for this equivalence. It has been made clear that to guarantee this equivalence, the steady state update gain matrix of the Kalman filter must be block diagonal.

30 pages, 1 figure