OMB A-123 Update CRT April 20, 2015 Mike Wetklow Office of Federal Financial Management Office of Management and Budget

Internal Controls 1981/1982/1983 – OMB Issued Circular No. A-123, Internal Control Systems and Internal Control Guidelines Federal Managers Financial Integrity Act   1986 – OMB Required Management Control Plans to guide efforts 1995 – OMB updated A-123, Management Accountability and Control to reflect GPRA, CFO Act, IG Act 2004 – OMB updated A-123, Management’s Responsibility for Internal Control and added Appendix A, Internal Control Over Financial Reporting OMB’s vision for 2015 Update – transform and evolve existing internal control compliance frameworks so that it creates a more value added, integrated, risk based, and less burdensome set of requirements for agencies. The revised guidance will: Clarify technical terminology to help program managers better understand and implement internal controls Introduce ERM concepts as defined by the COSO framework Replace “check the box” compliance approach with risk management-based approaches to support agency missions Streamline assurance statement reporting Build on successful implementation of internal controls over financial reporting Be put out for comment in Spring 2015 with an implementation date of 2016

ERM and Internal Controls A-123 Future State Governance ERM Internal Controls A-123 Current State Internal Controls Source: COSO

ERM and Internal Controls Source: COSO

Streamlining Assurance Statements

Additional Considerations Corrective Actions Service Organizations Internal Controls in Disaster Situations Fraud Internal Controls over Financial Assistance (i.e., Grants) Appendix A