1. Commonwealth of Massachusetts Internal Control Questionnaire (ICQ) NASACT Managing Internal Control with Compliance Technology January 31, 2007

2. Agenda Commonwealth of Massachusetts Internal Control Law Awareness of Internal Controls Internal Control Questionnaire (ICQ) Comments / Questions

3. Commonwealth of Massachusetts 10 th Largest State Fortune 34 company 69,000 Employees $43.4 billion in Total Revenue* $42.8 billion in Total Expenses* * Source Data is Massachusetts 2005 CAFR

4. 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

5. Internal Control At A Glance Internal Control Legislation (1989) Internal Control Campaign & Awareness of Internal Controls (1990 – present) Procurement Reform (1996) Annual Internal Control Questionnaire (debuted in 2000) Implement New Accounting System (2004) Office of the Comptroller, Quality Assurance Bureau (2005)

6. Chapter 647 of the Acts of 1989 An 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

7. Awareness of Internal Controls Internal Control Plan Guide Instructor-lead Training Hands-on Workshops Review Internal Control Plans

8. Internal Control Questionnaire ICQ is a web-based application ASP script engine / SQL database Debuted in 2000 / Updated Annually Answers are Yes, No or Not Applicable FY2006 – 273 Questions in 12 Sections / Business Areas 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

9. ICQ Categories A. General Information B. Internal Control Plan C. Accounting & Fiscal Operations D. Budget E. Cash F. Procurement G. Monitoring & Reporting General Program Performance H. Payroll & Personnel I. Fixed Assets J. Revenue & Receivables K. Investment L. Administrative Controls Over Federal Funds M. Representations

10. ICQ Application

11. Department Access to ICQ

21. Administrator Access

26. 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 Implementation of new accounting system Assist agencies in evaluating and modifying Internal Controls

27. ICQ Responses Does the Department document Internal Controls? Has the Internal Control Plan been updated in the past year…?

28. Comments / Questions

29. Contact Information Julia P. Burns Director, Quality Assurance Bureau e-Mail: Julia.Burns@osc.state.ma.usJulia.Burns@osc.state.ma.us OSC: www.mass.gov/oscwww.mass.gov/osc