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Internal Controls and Assurance Statement

Financial Management

Improved Financial Performance

Internal Controls – organization, policies, and procedures – are tools to help program and financial managers achieve results and safeguard the integrity of their programs.  Effective internal control provides assurance that significant weaknesses in the design or operation of internal control, that could adversely affect the agency’s ability to meet its objectives, would be prevented or detected in a timely manner.

USGS Internal Control Review Process

DOI issues Internal Control Review (ICR) guidance, including Departmental Functional Reviews (DFRs)

USGS sends data call to regional and discipline points-of-contact (POC) for reviews to be conducted during the fiscal year

Internal Control Coordinator (ICC) prepares the USGS Internal Control Review Plan (ICRP) in the DOI prescribed format

DOI reviews and concurs and (or) provides guidance to the bureaus’ ICRP

Throughout the year, the regions and disciplines conduct the reviews

USGS conducts mid-year updates to the ICRP and participates in the DOI mid-year ICAF meeting

Assurance Statement over the Financial Reporting Systems is prepared by Administrative Policy Services

POCs provide status of the reviews reflected on the ICRP for the Associate Directors and Regional Directors (ADs/RDs) annual assurance statement

ADs/RDs submit their annual assurance statement to the Director through the ICC

ICC prepares the bureau’s annual assurance statement based on the ADs/RDs annual assurance statement

DOI conducts year-end ICAF issue resolution meetings

Findings as a result of the reviews are entered and tracked in the Report Tracking System (RTS)

Internal Control Reviews and the Assurance Statements are mandated by OMB Circular A-123 (A-123); Management’s Responsibility for Internal Control to ensure that management develops and maintains effective internal control.  To conform to this mandate the Department’s Office of Financial Management conducts the Department’s Internal Control and Audit Follow-up (ICAF) Program.  The Department provides annual guidance, which includes the activities and timeframes necessary to comply with the Federal Financial Manager’s Act (FFMA) Federal Managers’ Financial Integrity Act (FMFIA), A-123, OMB Circular A-127, Financial Systems, and the OMB Circular A-50, Audit Follow-up.

The ICAF program focus is to ensure that the bureaus are:

Operating efficiently and effectively

Managing and protecting resources

Complying with laws and regulations

Sustaining effective controls over financial reporting,  and

Using reliable program and financial information for day-to-day decision making.

Review (science proposals and products)

The DOI Internal Control Review Guidance includes a new comprehensive approach and requires the Internal Control reviews to be scheduled by using a prescribed risk assessment process.   For each assessable unit we must assess the inherent risks to delivering mission and test that controls are in

place to prevent waste, fraud, abuse and/or catastrophic occurrence.

USGS Internal Control Reviews: Summary

Reviews are reported on the USGS ICRP, which consists of four components: (1) Program, (2) Information Technology, (3) Administrative, and (4) Operations.  USGS completed 200 reviews within these four components in FY 2009.  The FY 2010 review process is underway.   The Programs completed their risk assessments using the new Integrated Risk Rating Tool developed by the Department, and the 2010 Component Inventory has been developed and approved by the Department.  The program component review process is determined based on risk assessment.  All 2010 reviews will be completed per the Schedule of Events contained in the 2010 DOI Guidance.  The administrative/financial component reviews were selected based on risk assessment. The DFRs on property, acquisitions and information technology are also reported on the ICRP. The reviews conducted under the Operations component are conducted in accordance with their respective Departmental guidance.  Any findings are monitored in the RTS.

The FMFIA is an Act that was established in 1982, to amend the Accounting and Auditing Act of 1950, to require ongoing evaluations and reports of the adequacy of the systems of internal accounting and administrative control of each executive agency, and for other purposes.

U.S. Department of the InteriorFebruary 2010

U.S. Geological Survey

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