OMB Circular A-123 Lessons Learned: Strategies for Sustained Compliance and Outlook for the Future

1
OMB Circular A-123 Lessons Learned Strategies
for Sustained Compliance and Outlook for the
Future

• Presented by
• Frank Petersen, Director Office of Quality
  Assurance, National Aeronautics and Space
  Administration

2
OMB NASA A-123-A Multi-Year Approach

• NASA instituted a multi-year approach to fully
  implement the requirements of A-123, Appendix A
• Year 1 assessment focused on significant
  financial statement line items
• Year 2 focuses on a restructured approach to
  cover key cycles and sub processes while
  continuing to building upon the foundation
  established in year 1

3
Year 1 Laying the Ground Work

• Instituted a Top Down approach
• Established the Senior Assessment Team to oversee
  A-123 implementation across NASA
• Identified significant financial statement line
  items for documentation and testing
• Developed a comprehensive methodology for
  implementing the A-123 requirements over 3 years

4
Year 1 Lessons Learned

• Focus efforts on core requirements to optimize
  resources
• Leverage existing documentation and resources to
  produce process narratives and flow charts
  (optional)
• Develop high level standard processes across
  financial management
• Build universal ownership into the process for
  implementing a system of sound financial
  controls

5
Year 2 Building Upon the Foundation

• Continue to promote effective Agency-wide
  internal control management
• Senior Assessment Team improving methodology for
  fully integrated approach to internal control
• Preparing comprehensive internal control guidance
  for programmatic, financial, and institutional
• Ensuring a uniform process for gathering
  supporting documentation and evidence for the
  Annual Statement of Assurance

6
Year 2 Building Upon the Foundation

• Incorporate FY 06 Key controls into Center CFOs
  individual development plans
• Develop Financial Management Internal Control
  Framework (ongoing initiative)
• Define agency level standard business processes
• Develop standard control objectives and control
  activities
• Establish financial management training program
• Establish high level generic Key controls model

7
Strategies for Sustained Compliance

• Make internal control management common business
  practice
• Leverage resources across the Agency
• Establish an agency-wide internal control
  training program
• Overcome barriers to sound financial management
  practices through
• Universal buy-in from top to bottom
• Shared responsibility
• Comprehensive communication
• Sound monitoring practices
• Risk based approach

8
Embed Effective Internal Control Management into
the Culture

• Continue to build synergy and coalitions agency
  wide Involve stakeholders in the process
• Ensure controls are adequate, unobtrusive,
  withstand scrutiny, safeguard assets, and
  address
• Quantitative and Qualitative issues
• Continue growth and development of uniform system
  of internal control

9
Outlook for the Future

• Benefits for Today, Tomorrow, and Beyond
• Integrated enterprise system confluence of
  business processes and accounting information
  creates greater
• Need for sound internal control
• Understanding of non-financial business process
  impacts on the general ledger
• Increased reliance on information obtained to
  make management decisions

10
Outlook for the Future (cont.)

• Movement toward shared services and standard
  business processes across the organization
  creates need for solid internal control structure
• Inside and outside of shared service environment
• Stakeholder monitoring and risk assessment
• Third party checks and balances
• Exception processing controls