Meeting DOE’s OMB Circular A-123 Requirements at Fermilab by g5211134

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									    Meeting DOE’s OMB Circular A-123
        Requirements at Fermilab
                   &
    Financial Management Assurance



                   Circular A-123:
          Management's Responsibility for
                   Internal Control
Appendix A (Internal Control over Financial Reporting)



                                                    C. Conger 4/28/09
              BACKGROUND

A-123:
• Defines management’s responsibility for internal
  control in federal agencies.
• Provides guidance to help management improve
  accountability and effectiveness of operations by
  maintaining effective internal controls, and assessing,
  correcting, and reporting on internal controls.
• Applies to Fermilab through DOE. The Lab’s financial
  information and internal controls affect DOE.
• First implemented in FY06.


                                                 C. Conger 4/28/09
          BACKGROUND (cont.)

Appendix A:

• Ensures the Federal Government is committed to
  safeguarding its assets and providing reliable financial
  information.
• Strengthens the requirements for methods
  management must use to assess, document, and
  report on internal control over financial reporting.
• Emphasizes the need for agencies to integrate and
  coordinate internal control assessments with other
  internal control related activities.
• Supports DOE’s requirement of quarterly reporting
  through DOE’s AART (A-123 Assessment & Reporting
  Tool).

                                                  C. Conger 4/28/09
A-123 Requirements

• Document risks & controls over financial reporting for
  processes affecting “material accounts”.
• Assess the design effectiveness of the controls, and
  document the assessment process.
• Test the controls as DOE A-123 schedule dictates (A-
  123 year is July 1 – June 30).
• Submit quarterly reports via the AART (A-123
  Assessment & Reporting Tool).
• Submit a Corrective Action Plan when deficiencies are
  identified by assessments and testing, and take
  corrective action.

                                                C. Conger 4/28/09
Fermilab A-123 Assessment Status
                              as of January 2009:
                                      Num ber of                   Num ber of    Num ber of
  Process                                Sub-          Num ber        Key       Outstanding
   Cycle            Process           Processes        of Risks     Controls       CAPs

 P2P - Procure to Pay
             Acquisition                           5          17           30                 0
             Payable Managem ent                   3          11           21                 0
             P2P Total:                            8          28           51                 0

 P2A - Project to Asset
              Property Mgt                         6          21           39                 0
              P2A Total:                           6          21           39                 0

 ERM - Enterprise Resource Mgt
             Benefits                           1              3            6                 0
             Hum an Resources                   6             14           20                 0
             Payroll                           13             24           48                 0
             ERM Total:                        20             41           74                 0

 B2C - Budget to Close
             Cost Mgt                           4              6            9                 0
             Funds Mgt                          2              2            2                 0
             General Ledger Mgt                11             21           28                 0
             B2C Total:                        17             29           39                 0

 EC - Entity Internal Controls
               Control Activities              13             25           30                 0
               Control Environm ent             7             11           15                 0
               Info. and Com m un.              3              5            9                 0
               Monitoring                       6              8           13                 0
               Risk Assessm ent                 3              3            6                 0
               EC Total:                       32             52           73                 0

 Grand Total:                                  83            171          276                 0

                                                                                                  C. Conger 4/28/09
      2009 A-123 Activities

• Document, assess, and test the Travel Process and
  Pro-Card Sub-Process.
• Cyclical testing of other Sub-Processes (approximately
  35 controls)
    Testing cycle is 3 years (maximum)
    Internal Audit conducts test work
• Migrate to new Financial Management Assurance
  (FMA) Tool – when???




                                                C. Conger 4/28/09
             2009 Milestones

•   January 2009 – 1st Qtr AART due DOE-CH - done
•   April 2009 – 2nd Qtr AART due DOE-CH - done
•   June 2009 – Complete 2009 testing
•   July 2009 – 3rd Qtr AART due DOE-CH
•   New FMA tool due?? When??

    What is FMA – “Financial Management Assurance?




                                                 C. Conger 4/28/09
    Build on A-123,
    Evolve to a Common Approach


                                                         Local
                                                           ….
                                                             SCIC
                                                               FFMIA
                                                                  A-123
                                      Leverage




                                          Capture Once
8                 February 19, 2009
    Certifications
       Key Corporate Certifications
         –   A-123, Appendix A (Controls over Financial Reporting)
         –   FMFIA, Section II (Financial Management Controls)
         –   FMFIA Section IV (Financial Management System Controls)
         –   FISMA (Information System Controls)
         –   FMS 2108, Year-end Closing Statement (Ending Balances)
         –   Statement of Costs Incurred and Claimed Certification (Contractor Cost)


       Other Certifications / Activities that can be supported
         –   Mgmt. Representation Letter Assurances (Financial Statements)
         –   Subsequent Events Calls (Financial statements)
         –   Support Cost Data Certification
         –   Financial Management System Certifications
         –   Biennnial Pricing Reviews
         –   Letter of Credit Certifications
         –   Erroneous Payment/Recovery Audit Activities
         –   Trial Balance Reconciliations
         –   …….

9                               February 19, 2009
     Evolution from A-123 to FMA
                   A-123                                                FMA
        A-123 only                                           All Key Certifications incl A-123
        Material Accounts focus                              Compliance and Risk based focus


        Standard Process Cycle / Process                     Standard Process Cycle / Process
        Local Sub-processes                                  Standard Sub-processes
        Local Risks                                          Standard Risks / Local Risks
        Inherent Risk (Impact / Likelihood)                  Exposure Risk / Control Effectiveness / Risk
                                                               Occurrence


        Control Sets                                         Controls / Standard Compliance Controls

        ……                                                   Name of System for Automated Controls

        PERCV                                                No PERCV

        Remediation / CAP                                    CAP References / No CAP Tracking in Release 1


        Detail data capture (Test info, Rationales,          Higher level data capture (delegated
         Documentation location....)                           responsibility to Field / Detail data capture
                                                               optional)




                       Targeted to year round use and certifications support
10
10                                     February 19, 2009
         FMA Tool as Evolution from AART




     Process     Risks   Risk             Controls   Risk      Evaluation
     Hierarchy           Assessment                  Factors   Dates (Last, Next)




11
11                        February 19, 2009
     Implementation Strategy & Timelines
        Strategy
         –   Migration timeline from AART to FMA is at the Site’s discretion during FY
             2009

         –   Until a Site has migrated to FMA they continue with the AART and
             current certification approaches

         –   Sites need to populate the FMA Tool with required data to support
             certifications

         –   Everyone will be operational on FMA by October 1, 2009




                 What we were told in December



12                            February 19, 2009
    FMA – What we know now

• Latest Info:
    Full rollout of FMA tool in May (previously October 1st)
    Office of Internal Review will send out tool, guidance, and
     timeline “soon” (next week), to be followed by training
     webinars.
    Will have to fill out both tools this year; no due date yet
    No automated way to migrate risks & controls from AART to
     new tool
    192 standard risks identified with ability to add local risks
    Risk definitions have changed in FMA; more robust risk
     analysis in new tool and testing cycles not as rigid
• To be continued . . .

                                                          C. Conger 4/28/09

								
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