Certification of Internal Controls Over the Payment Process Presented by OSC: Linda Herald, CIA, CGAP; Casey Horton; Bernard J. McHugh, CPA, CISA; Joseph Motzer; Holly Reilly, CPA, CIA; Christina Teator, CPA, CFE Special Guest: Jennifer O’Neill New York State Archives

Agenda Requirement Background 2017 Results 2018 Requirement

Overview of Requirement State Finance Law Section 110 Certification or approval of vouchers shall be made by the head of the department, or by those designated by the head of the department to do so. The heads of the commissions, divisions and offices within the executive department shall be treated as department heads.

Overview of Requirement NYCRR Title 2, Chapter I, Part 6.6 Agency head must submit an internal controls certification to OSC certifying their agency has established such a system of internal control over the payment process. Maintain adequate internal controls over the payment process to support the validity of the agency claim certification for processing payments. Required certification annually or upon change of the agency head.  

Importance of Controls over Payment Processes Support certification of payments as being just, true and correct. Reduce improper payments.

Annual Requirement Certification Form due on or before April 30th: BSEInternalControlCert@osc.state.ny.us Agency head required to submit the annual certification. Agency head may also be required to assess the internal controls for one or more particular areas each year. Maintain documentation to support assessment of controls over the payment process.

Certification Resources Guide to Financial Operations (GFO) XII.4.D contains: Frequently Asked Questions Internal Control Assessment Programs

2017 Requirement Certify internal controls over the payment process Assess controls over receiving

2017 Results 74 % Satisfactory 25% Satisfactory with Weaknesses 1% Unsatisfactory Sample Testing Satisfactory Satisfactory with Weaknesses

Best Practices One certification form submitted per BU Documentation to consider maintaining: Methodology to support sample size Testing steps Summary of testing results Recommendations For corrective action plans: Control weaknesses identified Corrective action plan/compensating control Implementation date

2018 Requirement Certify internal controls over the payment process. Assess controls over obtaining and retaining records to support payments. Form due on or before April 30, 2018. Provide back-up documentation as requested from OSC.

2018 Requirement Objective: To ensure the agency obtained and retained sufficient, appropriate original source documentation to support claims for payment.

2018 Requirement Determine if the agency has adequate processes to obtain sufficient, appropriate evidence to provide reasonable assurance vendor performance complied with deliverables. Determine if the agency ensures protection, authenticity, reliability, integrity, and usability of imaged records. Determine if the agency maintained the supporting documentation for the time frames consistent with State records retention laws.

2018 Requirement GFO New York State Archives XII.4.D Certification of Internal Controls over the Payment Process Evidence and Record Retention Audit Program XIV.9 Statewide Financial System Imaging and Attachment Guidance XII.3 Record Retention – Accounts Payable Vouchers and Land Claims XIII.3 Record Retention – Travel and Expense New York State Archives Digital Imaging Guidelines Managing Records Guidance

2019 Requirement Procurement Card Purchases Contracts Requiring Electronic Payments

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Contact Us BSEInternalControlCert@osc.state.ny.us