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Handbook 09-27
April 2009

Chapter 3

Management Internal Control Program

To ensure compliance with funds management laws and regulations, the Department of Defense directs brigade commanders to implement and maintain a Management Internal Control Program (MICP). The resource manager (J8/C8/G8) supporting operations manages the MICP.

Management controls are the rules, methods, procedures, or devices designed to ensure programs operate as intended, identify and report areas needing improvement, and take timely corrective actions. Brigade commanders implement the MICP by scheduling, conducting, and documenting evaluations of management controls. Based on the results of these evaluations, brigade commanders must identify and correct any material weaknesses and submit an Annual Statement of Assurance (ASA) through their chain of command.

MICPs provide reasonable assurances that:

  • Obligations and costs comply with applicable laws.
  • Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation.
  • Revenues and expenditures are properly accounted for and recorded.
  • Programs are efficiently and effectively carried out according to applicable laws and management policies.

Personnel Responsibilities

The brigade commander is an assessable unit (AU) manager and will:

  • Appoint a management control administrator (MCA) and send the appointment letter to the senior headquarters' MCA.
  • Ensure the brigade MCA receives MICP training.
  • Develop and submit a management control plan (MCP) to the senior headquarters' MCA.
  • Conduct appropriate management control evaluations, document findings, and forward the documentation to the senior headquarters' MCA.
  • Submit an ASA for the AU.
  • Prepare and submit a Statement of Material Weakness for the AU, and, if necessary, to the senior headquarters' MCA.
  • Ensure management control is listed as an explicit responsibility under major performance objectives on his or her annual personnel evaluation support form.

An AU MCA will:

  • Administer the manager's internal control process and lead all unit management control activities.
  • Complete senior headquarters' priority assessments and forward compiled assessments to the senior headquarters' MCA no later than the published dates.

Management Control Plan and Annual Statement of Assurance

MCP

The MCP is a schedule of management control evaluations for each fiscal year. The schedule must clearly communicate areas for evaluation along with when and who will conduct the evaluation. During a period of turnover in which a transfer of authority will occur, the redeploying unit must conduct the evaluations.

The Army has an inventory of management control evaluations that must be conducted at least once every five years listed on its Website (<http://www.asafm.army.mil/fo/fod/mc/amcec/amcec.asp>). MCAs should determine which of these evaluations are applicable to the AU.

Command oversight processes such as staff assistance visits, internal and external audits, command inspections, and internal reviews are internal control evaluations.

MCAs should ask senior leaders which functions require evaluation. Managers should focus on unique processes critical to operations that are not already covered by the Army's inventory of evaluations. All leaders and managers perform management controls. These controls range from simple to complex and from locking a door at the end of the day to formal audits of financial records. When management controls are significant and recurring, managers should document them and place them on the MCP.

ASA

The ASA provides a broad assessment of management controls within the command or agency and identifies any material weaknesses in these management controls. The ASA consists of the following:

  • A cover memorandum signed by the brigade commander that includes the actual ASA and an unqualified statement ("I have reasonable assurance . . ..") or a qualified statement ("I have reasonable assurance except for . . .."). The brigade commander may use a cover memorandum to address significant issues or concerns that relate to the effectiveness of management controls.
  • A Department of the Army Form 11-2-R (Management Control Evaluation Certification Statement) provides a description of the management control process and the basis for determining reasonable assurance. The brigade commander should use this form to describe how he reached his determination of reasonable assurance.

When writing the ASA, the brigade commander must determine if there is:

  • Reasonable assurance, which is a satisfactory level of confidence that management controls are adequate and are operating as intended. Inherently, a management judgment and reasonable assurance recognize there are acceptable levels of risk that cannot be avoided because the cost of absolute control would exceed the derived benefits.
  • Management control weakness, which is the ineffectiveness or absence of management controls (for instance, management controls are not in place, are in place but not used, or are in place and used but are ineffective).
  • Material weakness, which is a management control weakness that warrants reporting to the next level of command for either its action or its awareness. A weakness considered material must meet two conditions. It must involve a deficiency in management controls (for example, management controls are not in place, not used, or are inadequate), and it must warrant the attention of the next level of command, either because it must take action or because it must be aware of the problem.

Potential material weakness factors include the following:

  • Actual or potential loss of resources.
  • Sensitivity of the resource involved.
  • Magnitude of funds, property, or other resources involved.
  • Frequency of actual and/or potential loss.
  • Current or probable media interest (adverse publicity).
  • Current or probable Congressional interest (adverse publicity).
  • Unreliable information causing unsound management decisions.
  • Diminished credibility or reputation of Army management.
  • Impaired fulfillment of the essential mission.
  • Violation of statutory or regulatory requirements.
  • Impact on information security.
  • Deprived the public of needed government services.

The senior headquarters' MCA will keep in contact with the AU's MCA to ensure he or she understands what is required throughout the fiscal year.

Management Control Core Actions and Milestones

Table 3-1 is a sample of MICP core actions and milestones. The brigade commander's higher headquarters will provide the actual management control core actions and milestones.

Target Month

Core Action

Responsible Activity

September

Ramp-up for new fiscal year; review procedures, plan execution, and define milestones

Brigade MCA

October

Provide draft MCP five-year plan for staff; obtain command input; conduct MCP training for all points of contact

Brigade MCA

November

Consolidate staff input into MCP five-year plan and publish final version; publish tasking memo for current year evaluations and time line

Brigade MCA

December-March

Conduct evaluations according to the MCP and submit documentation reports to the MCA for compilation and forwarding to the senior headquarters' MCA; review audits, inspection reports, and program evaluations to identify program, policy, or procedural weaknesses

Brigade MCA

April

Prepare draft ASA; update material weakness action plans

Brigade MCA

May

Complete and submit ASA to higher headquarters' MCA

Brigade MCA

Table 3-1


 

Last Reviewed: May 18, 2012

 
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