Internal Control: Analysis of Joint Study on Estimating the Costs and Benefits of Rendering Opinions on Internal Control over Financial Reporting in the Federal Environment
Highlights
The Department of Homeland Security (DHS) Financial Accountability Act, Public Law Number 108-330, requires DHS management to provide an assertion on the internal control that applies to financial reporting for fiscal year 2005 and to obtain an auditor's opinion on the department's internal control over its financial reporting for fiscal year 2006. The act also directs the Chief Financial Officers (CFO) Council and the President's Council on Integrity and Efficiency (PCIE) to conduct a joint study, and report to the Congress and to the Comptroller General of the United States, on the potential costs and benefits of requiring agencies subject to the Chief Financial Officers Act of 1990 to obtain audit opinions of their internal control over financial reporting. The DHS Financial Accountability Act also requires that the Comptroller General of the United States review the joint study and report the results of this analysis to the Congress. In December 2005, we briefed available committee staff on our preliminary analysis of the joint study. This report provides further details on our review and on our views regarding a requirement for federal agencies to obtain audit opinions on their internal control over financial reporting.
Recommendations
Recommendations for Executive Action
Agency Affected | Recommendation | Status |
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Office of Management and Budget | To ensure that audit opinions on agency internal control over financial reporting are obtained at the proper time and for a reasonable cost, the Director, Office of Management and Budget, as a function of OMB's financial management leadership role, should develop specific criteria related to when an agency should initially be required to obtain an opinion on internal control over financial reporting. Such criteria should address the overarching goal of ongoing improvements in federal agency internal control and also consider the facts and circumstances of individual agencies and oversight needs. |
As of March 2012, this recommendation had not been implemented and is considered closed.
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Office of Management and Budget | To ensure that audit opinions on agency internal control over financial reporting are obtained at the proper time and for a reasonable cost, the Director, Office of Management and Budget, as a function of OMB's financial management leadership role, should consider establishing criteria whereby an agency would qualify for a multiyear cycle for obtaining an audit opinion on internal control over financial reporting, rather than an annual cycle. Such criteria should address the overarching goal of ongoing improvements in federal agency internal control and also consider the facts and circumstances of individual agencies and oversight needs. |
As of March 2012, this recommendation had not been implemented and is considered closed.
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