Financial Controls and Risk Management Building a Roadmap Through Practical Lessons Learned

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Nov 9, 2013 (3 years and 7 months ago)

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Financial Controls and Risk
Management


Building a Roadmap
Through Practical Lessons Learned


UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

2

U.S. Office of Personnel Management (OPM)

OPM at a Glance


OPM:
Our mission is to ensure the
Federal Government has an effective
civilian workforce.

3

U.S. Office of Personnel Management (OPM)

OPM at a Glance


Organization:
OPM operates from its headquarters
in the Theodore Roosevelt Federal Office Building in
Washington, DC. OPM delivers a variety of products
and services with the help of its 4,800 employees in
the District of Columbia and in 16 locations across the
country, and operating centers in Pittsburgh and
Boyers, PA; Ft. Meade, MD; and Macon, GA.

4

U.S. Office of Personnel Management (OPM)

OPM at a Glance


FY 2006 Total Assets and/or Liabilities and Net Position:
$749.7 Billion.



Retirement Program



Health Benefits Program



Life Insurance Program



Revolving Fund Programs



Salaries and Expenses


FY 2006 Audit Opinion:
Unqualified
, no material
weaknesses.


FY 2006 Assurance on Internal Controls over Financial
Reporting:
Unqualified
, no material weaknesses.

5

A
-
123/Appendix A Challenges:

Effective Controls Over Financial Reporting


Ensuring top management and program officials are full partners,
and achieving the Agency mission in a cost
-
effective manner is
the core goal of the financial management organization.


Implementing a results
-
oriented financial management culture.


Building an internal control foundation and infrastructure to carry
the workload effectively.


Ensuring risk management is a core component.


Raising management awareness; training managers and staff.


Expanding internal controls beyond financial management.

6

Managing Internal Control Challenges:

The OPM Approach


Capital Investment Committee: Chaired by the CFO,
the Board includes the OPM Director, Deputy
Director, and other key top executives.

Ensuring top management and program
officials are full partners, and that achieving the
Agency mission cost effectively is the core goal
of the financial management organization:


7

Managing Internal Control Challenges:

The OPM Approach


Senior Assessment Board for Internal Control over
Financial Reporting: Chaired by the CFO, the Board
includes representatives of all key OPM program and
institutional offices, and the Office of Inspector
General in an advisory capacity.

8

Managing Internal Control Challenges:

The OPM Approach


Financial Systems Modernization Steering
Committee: Chaired by the CFO, the Committee
includes principal OCFO executives and senior
representatives from all key OPM program and
institutional offices.

9

Managing Internal Control Challenges:

The OPM Approach


OCFO outreach to OPM offices: Regular forums are
conducted to cover reporting status, program
requirements and performance, and to engage key
customers in discussion of program and financial
management issues.

10

Managing Internal Control Challenges:

The OPM Approach


The Agency’s strategic plan has been updated to link program goals
with financial management objectives and internal controls over
reporting.


OPM’s implementation of A
-
123/Appendix A follows a disciplined
program management approach: identifying, tracking, achieving, and
validating tasks.


Key financial management outcomes, including internal controls, are
specifically linked to individual executive, manager, and employee
performance plans.


The new Capital Investment Committee requires business case
information for all new investments (i.e., not just capital asset
investments).

Implementing a results
-
oriented financial management culture:

11

Managing Internal Control Challenges:

The OPM Approach


The OCFO Center for Internal Control and Risk
Management (CICRM), with an interdisciplinary staff of
audit, inspection, and evaluation specialists, serves as
the CFO’s principal facilitator for improved internal
control and risk management.


Building an internal control foundation and
infrastructure:


12

Managing Internal Control Challenges:

The OPM Approach


Assessment Support Team: Chaired by the Associate
CFO/CICRM, the Team consists of representatives of
key program, financial management, information
technology, and procurement units.

13

Managing Internal Control Challenges:

The OPM Approach


OCFO maintains open communication and shares
information with the Office of Inspector General and
the external auditor to help ensure that audit follow
-
up
is effective, timely, and tracked.

14

Managing Internal Control Challenges:

The OPM Approach


OCFO Audit Follow
-
up Tracking System (AFTS):
Developed to track OIG audit recommendations and
OPM corrective actions, and to document A
-
123/Appendix testing and mediation actions.

15

Managing Internal Control Challenges:

The OPM Approach


The Center is working closely with other OPM offices
to improve its overall directives management system
and with the accounting, budget, and procurement
staffs to update financial management policies,
procedures, work instructions, and other controls.

16

Managing Internal Control Challenges:

The OPM Approach


Center for Internal Control and Risk Management maintains and
routinely updates an Agency Risk Inventory, based on:



OIG



GAO audits



Self
-
assessments



Internal control and risk management reviews


Based on the risk inventory, a High Risk Listing is reported monthly
including the status of mitigation actions.


The Center for Internal Control and Risk Management supports the
OPM Financial Modernization Project Office with risk assessment and
internal control services.

Ensuring risk management is a core component:


17

Managing Internal Control Challenges:

The OPM Approach


The Center for Internal Control and Risk Management briefs managers
and employees on the benefits and requirements of internal control and
risk management.


The Center, in conjunction with the Senior Assessment Board and
Assessment Support Team, developed a self
-
assessment tool that
highlights risk assessment and mitigation efforts.


The Center developed and implemented an introductory training focused
on financial controls and risk management (almost 300 trained to date).


Specialized training was developed and offered based on customer
interest and need (e.g., information technology internal control and risk
management class for designated security officers).


Center managers and staff work closely with Agency customers to
troubleshoot issues.

Raising management awareness; training managers and staff:

18

Managing Internal Control Challenges:

The OPM Approach


The CFO and Center for Internal Control and Risk Management have lead
responsibilities for financial controls AND the facilitating Agency’s
compliance with the Federal Managers’ Financial Integrity Act. Risk and
control activities are reported for all OPM operations, not just financial
management.


The Center conducts internal control reviews over program activities as
well as financial management activities.


The Center will provide staff support to the newly created Capital
Investment Committee which will review and approve all significant
investments.

Expanding internal controls beyond financial management:

19

U.S. Office of Personnel Management (OPM)

Contact Information


David M. Cushing

Associate Chief Financial Officer for

Internal Control & Risk Management

202
-
606
-
4660

David.Cushing@opm.gov