Management and Internal Control Program
FEDERAL MANAGERS’ FINANCIAL INTEGRITY ACT SECTION 2
The Federal Managers’ Financial Integrity Act (FMFIA) requires agencies to establish internal control and financial systems that provide reasonable assurance that the three objectives of internal control are achieved:
FMFIA requires that the head of the agency, based on evaluation, provide an annual Statement of Assurance on whether the agency has met these requirements. Office of Management and Budget (OMB) Circular A-123, Management’s Responsibility for Internal Control, implements the FMFIA and defines management’s responsibility for internal control in federal agencies. FMFIA also requires agencies to establish internal controls over their programs, financial reporting, and financial management systems. GSA internal control reviews are conducted for agency program components to ensure that all significant risks are identified, tested, evaluated, and mitigated timely and effectively. These reviews also ensure that audit findings are addressed in a timely and effective manner and corrective action plans are implemented. GSA provides assurance on the effectiveness of the FY 2011 internal controls over operations, management systems, and financial reporting with consideration to all internal and external reviews of the agency. A “Summary of Financial Statement Audit and Management Assurances” table is under the Assurance and Management Challenges section of this page.
In FY 2011, GSA continued to strengthen management practices and internal controls to assure the integrity of its programs, operations, and business and financial management systems. This effort included an increased focus on risk management and risk analysis for all programs. GSA successfully completed all requirements of OMB Circular A-123; the Office of Federal Procurement Policy (OFPP)Memorandum Conducting Acquisition Assessments under OMB Circular A-123; the FMFIA; OMB Circular A-127, Financial Management Systems; the Federal Financial Management Improvement Act (FFMIA); and the Federal Information Security Management Act (FISMA) as the foundation of effective management operations and internal controls.
In FY 2011, GSA management continued to emphasize the coordination and leveraging of programmatic internal control reviews, financial reporting and system control reviews, acquisition assessment reviews, programmatic risk assessments, and management reviews of the American Recovery and Reinvestment Act (Recovery Act) internal controls and awards. The Recovery Act authorized the Public Buildings Service to invest $5.6 billion in federal building projects. This includes $4.5 billion to transform federal facilities into high-performance green buildings, $750 million to renovate and construct new federal offices and courthouses, and $300 million to construct and renovate border stations. As a result of the Recovery Act funding, GSA implemented risk assessments and internal control methodologies to ensure that Recovery Act funds were awarded and distributed in a manner that was prompt, fair, reasonable, and transparent to the public. These coordinated, risk-based review efforts achieved benefits by leveraging existing core competencies, reducing duplicative reviews, increasing compliance with all applicable laws and regulations, and reducing the internal control review burden on all GSA programs and organizational components.
In FY 2011, the Procurement Management Review (PMR) team collaborated with the Office of the Chief Financial Officer to jointly conduct financial and acquisition reviews in several regions. A portion of these PMR reviews assessed the specific control deficiencies identified by GSA external auditors. Upon completion, all results were presented to management through the GSA Management Control and Oversight Committee as the basis for determining the state of management assurances. Any identified control deficiencies were tracked through a database application and monitored for timely and accurate implementation of corrective actions.
Overall, the Internal Control Program at GSA is functioning soundly and GSA can provide reasonable assurance that internal controls over financial reporting are operating effectively and that there are no material weaknesses relating to the design or operation of internal controls over financial reporting.