GAO Report: Effective Internal Control is Key to Improving Accountability
GAO highlights six issues important to successful implementation of the revised Circular, specifically, the need for
- supplemental guidance and implementation tools;
- vigilance over the broader range of controls covering program objectives;
- strong support from managers throughout the agency, and at all levels;
- risk-based assessments and an appropriate balance between the costs and benefits of controls;
- management testing of controls in operation to assess if they are designed adequately and operating effectively; and
- management accountability for control breakdowns.
Internal control represents an organization’s plans, methods, and procedures used to meet its missions, goals, and objectives and serves as the first line of defense in safeguarding assets and preventing and detecting errors, fraud, waste, abuse, and mismanagement. Internal control provides reasonable assurance that an organizations’ objectives are achieved through
(1) effective and efficient operations,
(2) reliable financial reporting, and
(3) compliance with laws and regulations.
Congress has long recognized the importance of internal control, beginning with the Budget and Accounting Procedures Act of 1950, which placed primary responsibility for establishing and maintaining internal control squarely on the shoulders of management.
You may review the entire report at www.gao.gov/new.items/d05321t.pdf