ARMY

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ARMY MANAGEMENT CONTROL PROGRAM
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Terminal Learning Objective
Action Condition Standard
Identify the Principles of the Management Control
Program. Given AR 11-2. IAW AR 11-2.
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Management Controls in Todays Army
We cant afford to have any resources wasted or
lost because effective controls arent in place
or being followed, or because our stewardship
fails to engender trust in Congress or the
American people. Joe R. Reeder, Former Under
Secretary of the Army We must improve our
stewardship, how we safeguard our physical
assets, how we control sensitive items, how we
account for and report our financial assets-and
we must invest our time and energy to do it
now. General Gordon R. Sullivan, former Chief
of Staff
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Reasonable Assurance

• A satisfactory level of confidence given the
  consideration of costs, benefits, and risk.
• Some sensitive resources for which the costs of
  control cannot be an issue.
• For most resources, the Army cannot afford or
  attain 100 assurance.
• The determination of reasonable assurance is a
  day to day judgment.

100 EFFECTIVENESS OF COTROLS
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Management Controls in Todays Army

• The army is required to
• Establish effective management controls.
• Evaluate them periodically.
• Submit a broad annual assessment.
• Report, track, and correct material weaknesses.

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Management Control Categories

• Administrative controls
• Ensure adherence to laws, regulations, and
  policies.
• Accounting controls
• Safeguards financial and other assets from
  unauthorized use.
• Ensures reports and records are reliable and
  accurate.

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Laws Directives

• Accounting and Auditing Act of 1950
• Federal Manager's Financial Integrity Act of 1982
• OMB Circular A-123
• AR 11-2, Management Control
• Comptroller General Standards for Internal
  Control

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Federal Managers Financial Integrity Act (FMFIA)
Amends the Accounting and Auditing Act

• The Comptroller General will prescribe Management
  Control Standards.
• Audit Findings will be promptly resolved.
• OMB will establish management control review
  guidelines.
• Agency heads will prepare annual management
  control compliance statement.
• Agency heads will report on conformance of
  administrative and accounting control systems
  with Comptroller General principles, standards,
  and requirements.

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OMB Circular A-123

• Implementing vehicle for integrity act.
• Prescribes policies and standards for executive
  agencies in establishing, maintaining, and
  evaluating management controls.

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Comptroller General Standards

• Control Environment
• Risk Assessment
• Control Activities
• Information Communications
• Monitoring

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Control Environment

• Managers and employees are to maintain and
  demonstrate a positive and supportive attitude
  towards management control at all times.

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Risk Assessment

• Internal control should provide for an assessment
  of the risks the Army faces from both external
  and internal sources.

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Control Activities

• Unique to each agency.
• Examples include
• Top level reviews of actual performance.
• Reviews by management at functional or activity
  level.
• Management of human capital.
• Controls over information processing.
• Physical control over vulnerable assets.
• Establishment and review of performance measures
  and indicators.

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Control Activities (cont.)

• Examples (cont.)
• Segregation of duties.
• Proper execution of transactions and events.
• Accurate and timely recording of transactions and
  events.
• Access restrictions to and accountability for
  resources and records.
• Appropriate documentation of transactions and
  internal control.
• General control and application control for
  information systems.

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Information Communications

• Information must be recorded and communicated
• To those who need it.
• When and how they need it.
• Enables them to carry out their internal control
  and other responsibilities.

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Monitoring

• Internal control monitoring should
• Assess the quality of performance over time.
• Ensure that the findings of audits and other
  reviews are promptly resolved.

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Responsibilities

• Secretary of the Army
• ASA (FMC)
• DASA (FO)
• Director of Management, Control, and Evaluation
• HQDA Functional Proponents
• Auditor General

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Responsibilities

• Inspector General
• Senior Management Council
• Reporting Organizations
• Assessable Unit Managers
• All Commanders/Managers

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HQDA Functional Proponents

• Identify "KEY" management controls.
• Develop/approve evaluation checklist/method
  include in governing Army regulations.
• Review/approve management control corrective
  action plans.
• Report material weaknesses and corrective action
  plans to ASA (FMC).

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Management Control Implementation

• Policy
• Evaluation
• Reporting

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Evaluations

• Conducted at all levels
• Five-year plan
• Covers all functional areas
• Identifies regulations, references, checklists
• Uses existing evaluations (such as Command Supply
  Discipline Program) avoids special evaluations

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Reporting

• Annual statement
• Assessable unit managers/commanders
• Provides overall assessment of management control
  and weaknesses
• Forms basis for SecArmys annual statement

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Terminal Learning Objective
Action Condition Standard
Identify the Principles of the Management Control
Program. Given AR 11-2. IAW AR 11-2.