Commonwealth of Massachusetts

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Commonwealth of Massachusetts

• Internal Control Questionnaire (ICQ)

NSAA / NASC Joint Middle Management
Conference Des Moines, IA April 17, 2007
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Agenda

• Commonwealth of Massachusetts
• Internal Control Law
• Awareness of Internal Controls
• Internal Control Questionnaire (ICQ)
• Comments / Questions

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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

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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

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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 departments 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

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PARTNERSin Sound Financial Management

• People
• Accountability
• Responsibility
• Trust
• Negotiation
• Efficiency
• Risk Assessment Mitigation
• Solutions

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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)

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

• Internal Control Standards
• Managements 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

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Awareness of Internal Controls

• Internal Control Guide
• Instructor-lead Training
• Hands-on Workshops, as requested
• Review / Audit Internal Control Plans

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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, OSAs Auditors and OSCs Quality
  Assurance Bureau

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ICQ Categories

• General Information
• Internal Control Plan
• Accounting Fiscal Operations
• Budget
• Cash
• Procurement
• Monitoring Reporting General Program
  Performance
• Payroll Personnel
• Fixed Assets
• Revenue Receivables
• Investment
• Administrative Controls Over Federal Funds
• Representations

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ICQ Application
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Department Access to ICQ
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Department Access to ICQ
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ICQ Application
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Administrator Access to the ICQ
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Administrator Access to the ICQ
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Administrator Access to the ICQ
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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

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ICQ Responses

• Does the Department document Internal Controls?
• Has the Internal Control Plan been updated in the
  past year?

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Whats 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.

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New for FY2007 ICQ
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Comments / Questions
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Contact Information

• Julia P. Burns
• Director, Quality Assurance Bureau
• e-Mail Julia.Burns_at_osc.state.ma.us
• OSC www.mass.gov/osc