Peggy Johnson

1
CHECK IT Campaign Overall Managers Internal
Control Program Update

• Peggy Johnson
• DoD Managers Internal Control Program Manager
• Office of the Under Secretary of Defense
  (Comptroller)

2
Managers Internal Control Program CHECK IT
Awareness Campaign

• Campaign purpose -- Raise awareness on the
  importance of effective internal
  management controls
• Target all DoD Personnel
• Campaign overall message WE COUNT ON YOU TO DO
  THE JOB RIGHT!
• Core Messages
• The Departments mission cannot be accomplished
  by warfighters alone
• Everyone has a job to do, and every job is
  important
• Internal Management Controls ensure that what
  should happen, does happen every day, but they
  must be in place, effective, and used
• Slogan CHECK IT. WHAT GETS CHECKED, GETS DONE!

3
Year - Long Campaign Monthly Focus Areas
Jul 28, 2006 Deputy Secretary of Defense
Kickoff Ceremony Aug 2006 Financial Focus Sep
2006 Acquisition Focus Oct 2006 Military
Operations Focus Nov 2006 Personnel Focus --
(Still in progress) Dec 2006 Information
Technology Focus -- (Ongoing) Jan 2007
Logistics Focus Feb 2007 Medical Focus Mar
2007 Finance and Accounting Focus Apr
2007 Safety Focus May 2007 Military Operations
Focus June 2007 Intelligence / Security Focus
4
Federal Managers Financial Integrity Act
(FMFIA)

• FMFIA states that Agency Heads will
• Establish an effective system of internal
  controls
• Assess the effectiveness of internal controls
• Annually report assurance (Section 2 and Section
  4)
• Identify material weaknesses
• Describe plan and schedule for correcting

• OMB Circular A-123 Federal Agency
  requirements for FMFIA
• Managers Internal Control Program -- DoD
  policy for FMFIA and OMB A-123
• DoD Instruction 5010.40, Managers Internal
  Control Program Procedures
• FY 2007 Guidance for the Preparation of the
  Statement of Assurance
• Part I FMFIA / OMB A-123 Overall Guidance
• Part II FMFIA / OMB A-123 (Appendix A)
  Guidance
• Part III FY 2007 Statement of Assurance
  Scorecard Criteria

5
DoD Component Heads That Submit Statement of
Assurance to Secretary of Defense

• Secretaries of the Military Departments
• (Includes Army, Navy / Marine Corps,
  and Air Force)
• Office of Secretary of Defense (OSD)
• (Prepared by Director of
  Administration and Management and includes all
  OSD
• Principal Staff Assistants and DoD
  Field Activities)
• Chairman of the Joint Chiefs of Staff
• Commanders of the Combatant Commands
• (Includes EUCOM, TRANSCOM,
  NORAD/NORTHCOM, PACOM, SOUTHCOM,
• JFCOM, CENTCOM, SOCOM, STRATCOM)
• Inspector General, Department of Defense
• Directors of the DoD Agencies
• (Includes Defense Advanced Research
  Projects Agency (DARPA), Defense
• Business Transformation Agency
  (DBTA), Defense Commissary Agency
• (DeCA), Defense Contract Audit Agency
  (DCAA), Defense Contract
• Management Agency (DCMA), Defense Finance
  and Accounting Service
• (DFAS), Defense Information Systems
  Agency (DISA), Defense Intelligence
• Agency (DIA), Defense Logistics
  Agency (DLA), Defense Security Cooperation
• Agency (DSCA), Defense Security
  Service (DSS), Defense Threat Reduction
• Agency (DTRA), Missile Defense Agency
  (MDA), National Defense University

6
DoD Managers Internal Control ProgramPartnership
Pyramid
LEADERSHIP
PROGRAM EXECUTION
Secretary of Defense
DoD Managers Internal Control (MIC) Program
Manager
DoD Senior Assessment Team (Appendix A)
DoD Appendix A Program Manager
DoD Component MIC Program Manager
DoD Component Heads
Assessable Unit Managers MIC Program Manager
Assessable Unit Managers
Sub-Assessable Unit Managers MIC Program Manager
Sub-Assessable Unit Managers
Sub-Assessable Unit Managers MIC Program Manager
Sub-Assessable Unit Managers
Assessable Units Organizational reporting
units. Each DoD Component must report 100 of
assessable units.
7
Internal Management Controls

• Mechanisms, techniques, or processes that help
  ensure mission objectives are met
• Do not guarantee success but help lessen RISK
• Three objectives of internal controls
• Effective and efficient operations
• Reliable financial reporting
• Compliance with applicable laws and regulations

8
Internal Controls Can Help Prevent Fraud!!
9
Not Just a Financial Requirement -- Internal
Controls Are the Responsibility of Military
Leaders
Ranger Training
Four died
Hypothermia
Ineffective Internal Controls on Safety
10
And You Thought I Have A Desk Job!!
Managers Internal Control Program Training,
Multi-National Forces Iraq Baghdad, Iraq,
Feb 6 15, 2006
11
Managers Internal Control ProgramValue to
Military in War Zone

• The Managers Internal Control Program helps
• Save lives
• Tighten up processes to ensure mission success
• Provide analytical approach to assess
  effectiveness
• Conduct more efficient processes
• Create an atmosphere of reliability,
• credibility and confidence
• Produce more positive work environment
• Organizations can survive an audit
• Standardize so that problems will come to light
• Improve operations and force protection
• Deter fraud / waste / abuse

Provided by members of Multi-National Forces
Iraq, February 2006
12
DoD Managers' Internal Control Program
FMFIA Overall Process
OMB A-123


Supply
Mfg, Maint, Repair
Property Mgmt
Force Readiness
Commo, Intel Secur
Contract Admin
Info Tech
Procurement
Personnel Org
Major System Acq
Comptroller RM
RDTE
Security Assist
DoD Senior Assessment Team
Support Svcs
FMFIA Over Financial Reporting
Appendix A
13
One Program -- Two Distinct Processes
14
Components Required to Conduct BothFMFIA Overall
FMFIA Financial Reporting Processes

• Department of Army / United States Army Corps of
  Engineers
• Department of Navy / Marine Corps
• Department of Air Force
• United States Special Operations Command
• Defense Advance Research Projects Agency
• Defense Commissary Agency
• Defense Contract Audit Agency
• Defense Finance and Accounting Service
• Defense Information Systems Agency
• Defense Intelligence Agency
• Defense Logistics Agency
• Defense Security Service
• Defense Threat Reduction Agency
• Missile Defense Agency
• National Geospatial-Intelligence Agency
• National Reconnaissance Office (Certain
  information)
• National Security Agency / Central Security
  Service
• Office of the Secretary of Defense (Under
  Secretaries of Defense (Comptroller) for Defense
  wide compilation and (Acquisition, Technology
  and Logistics), Medicare Eligible Retirement
  Health Care Fund, Military Retirement Trust Fund,
  Chemical Biological and Defense Health Program,
  and Defense Health Program (Service Medical
  Activity and Tricare Management Activity))

15
Managers Internal Control Program Managers
Help Leadership

• Set strategy
• Develop plans
• Determine risk
• Develop controls
• Test controls
• Document
• Develop corrective
• action plans
• Write Statement
• of Assurance

• Train
• Clarify guidelines
• Assign Assessable
• Unit Managers (AUM)
• for 100
• Communicate internal
• control awareness

Very Important Job!!
16
DoD Components Reporting Directly to Secretary of
Defense
Secretary of Defense
Joint Staff
18 DoD Agencies 1 DARPA 2 DBTA 3 DCAA 4
DeCA 5 DCMA 6 DFAS 7 DIA 8 DISA
9 DLA 10 DSCA 11 DSS 12 DTRA 13 MDA
14 NDU 15 NGA 16 NSA 17 PFPA
18 USUHS
9 Combatant Cmds 1 NORTHCOM 2 SOCOM
3 SOUTHCOM 4 JFCOM
5 STRATCOM 6 TRANSCOM 7
PACOM 8 CENTCOM 9 EUCOM

3 Military Depts 1 Army 2 Navy/MC 3 AF
OSD Overall (DAM) includes All Principal
Staff Assistants and Field Activities
DOD FR Appendix A
IG, DoD
34 DoD Components
17
DAM Proposed Realignment of DoD Components
Secretary of Defense
Joint Staff
IG, DoD
15 Principal Staff Assistants (with Defense
Agencies and Field Activities enmeshed in PSAs
program) 1 USD (ATL) 2 USD (P) 3 USD (C)
4 USD (PR) 5 USD (I) 6 ASD (NII) 7
ASD (LA) 8 ASD (PA) 9 GC 10 DOTE 11
ASD (IO) 12 DAM 13 D, FT 14 D, NA 15 D,
PAE
9 Combatant Cmds 1 NORTHCOM 2 SOCOM
3 SOUTHCOM 4 JFCOM
5 STRATCOM 6 TRANSCOM 7
PACOM 8 CENTCOM 9 EUCOM

3 Military Depts 1 Army 2 Navy/MC 3 AF
1 DARPA 2 DBTA 3 DCAA 4 DeCA 5
DCMA 6 DFAS 7 DIA 8 DISA 9 DLA 10
DSCA 11 DSS 12 DTRA 13 MDA 14 NDU 15
NGA 16 NSA 17 PFPA 18 USUHS
DOD FR

• Proposed by DAM
• Only affects OSD MIC Program
• Not effective in FY 2007
• Not decided -- Being coordinated for
  consideration
• If implemented
• PSAs must continue to report all previously
• reported Agency weaknesses
• PSAs would report assurance of Agency
• overall and financial reporting weaknesses

18
Statement of Assurance ScorecardPurpose

• Communicate leaderships priorities
• Encourage consistent performance across the
  Department
• Award exceptional performance
• Motivate poor performers

WHITE (5), PURPLE (4) and BLUE (3)
Exceptional Extra Credit GREEN (2)
Acceptable, AMBER (1) Poor, RED (-1)
Unacceptable BLACK (-10) Jeopardizes Entire
DoD Process
19
FY 2007 Statement of Assurance Maximum Scores
per Criteria
20
FY 2007 Statement of Assurance Minimum Scores
per Criteria
21
Summary

• Establishing effective controls helps prevent
• Fraud, waste or abuse
• Accidents
• Unauthorized access to information or systems
• Mission failure
• Negative publicity
• Pilferage
• Effective internal controls help leaders become
  more confident (assured) that things are
  happening as they should