Commonwealth of Massachusetts Internal Control Questionnaire (ICQ) NSAA / NASC Joint Middle Management Conference Des Moines, IA April 17, 2007.

Commonwealth of Massachusetts

Internal Control Questionnaire (ICQ)

NSAA / NASC Joint Middle Management Conference

Des Moines, IA

April 17, 2007

Agenda

Commonwealth of Massachusetts

Internal Control Law

Awareness of Internal Controls

Internal Control Questionnaire (ICQ)

Comments / Questions

Commonwealth of Massachusetts

10th Largest State

Fortune 34 company

83,000 Employees / 69,000 Full Time Equivalents

$43.4 billion in Total Revenue*

$42.8 billion in Total Expenses*

* Source Data is Massachusetts 2005 CAFR

Massachusetts State Agencies Executive Branch

125 State Agencies 12 Independent Agencies

Constitutional Offices (4) Legislative Branch (2) Judicial Branch

7 Departments

Other 22 Authorities and Quasi-

Public Agencies

Internal Control Partnership

Office of the State Auditor

Independent Constitutional Office

Independent Audits

Issue 250 – 300 audit reports annually

Use Generally Accepted Government Auditing Standards

Include a review of the department’s internal control plan in all audits

Office of the State Comptroller

Independent agency within the Executive Branch

Quality Assurance Bureau

Departmental Quality Assurance Reviews include a review of internal control plans

Internal Control Guide

Annual Internal Control Questionnaire

PARTNERSin Sound Financial Management People

Accountability

Responsibility

Trust

Negotiation

Efficiency

Risk Assessment & Mitigation

Solutions

Internal Control ImplementationAt a Glance Internal Control Legislation

(1989)

Awareness of Internal Controls (1990 – present)

Procurement Reform (1996)

Annual Internal Control Questionnaire (2000)

Implement New Accounting System (2004)

Office of the Comptroller, Quality Assurance Bureau (2005)

Chapter 647 of the Acts of 1989An Act to Improve Internal Controls at State Agencies

Internal Control Standards Management’s Responsibility

Internal Control Officer is to be equivalent in title to assistant or deputy to the department head and ensure: Written documentation of internal accounting and administrative

control system is on file for review by Office of the State Auditor (OSA), Office of the Comptroller (OSC) and Administration & Finance (ANF)

Internal control structure is evaluated annually or as conditions warrant.

Audit recommendations are promptly evaluated and corrective action is taken by management.

Reporting all unaccounted for variances, losses, and theft of funds or property to the OSA

Internal control guidance provided by the OSC

Awareness of Internal Controls Internal Control Guide

Instructor-lead Training

Hands-on Workshops, as requested

Review / Audit Internal Control Plans

Internal Control Questionnaire ICQ is a web-based application

ASP script engine / SQL database

Debuted in 2000 / Updated Annually

FY2006 – 273 Questions in 12 Sections / Business Areas

Answers are Yes, No or Not Applicable

Department representations are incorporated into the ICQ Department Head

Internal Control Officer

Chief Fiscal Officer

Answers are available to the Independent Auditors, OSA’s Auditors and OSC’s Quality Assurance Bureau

ICQ Categories

A. General InformationB. Internal Control PlanC. Accounting & Fiscal OperationsD. BudgetE. CashF. ProcurementG. Monitoring & Reporting General Program PerformanceH. Payroll & PersonnelI. Fixed AssetsJ. Revenue & ReceivablesK. InvestmentL. Administrative Controls Over Federal FundsM. Representations

ICQ Application

Department Access to ICQ

Department Access to ICQ

ICQ Application

Administrator Access to the ICQ

Administrator Access to the ICQ

Administrator Access to the ICQ

ICQ Responses

Analysis of responses – manual

Follow-up with departments

One of the tools used to evaluate internal controls Statewide Single Audit

Audits / Quality Assurance Reviews

Risk Assessment

Statewide Statistics

Assist agencies in evaluating and modifying Internal Controls

ICQ Responses

Does the Department document Internal Controls?

Has the Internal Control Plan been updated in the past year…?

98%

2%

YesNo

85%

15%YesNo

What’s New for FY2007?

Questions on…

Ethics & Compliance

Management Philosophy & Operating Style

Risk Assessment

Modified the application to meet new Commonwealth standards.

Prompt to change password.

New for FY2007 ICQ

Comments / Questions

Contact Information

Julia P. Burns

Director, Quality Assurance Bureau

e-Mail: [email protected]

OSC: www.mass.gov/osc