![](media/image1.wmf){width="1.570138888888889in"
height="1.5159722222222223in"} **Handbook 1840.1 Rev-3**

> U.S. Department of Housing and Urban Development
>
> Office of the Chief Financial Officer

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> Departmental
>
> Staff

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**February 1999**

> **Departmental**
>
> **Management Control**
>
> **Program**

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1\. [This Transmits:]{.underline}

> Handbook 1840.1 REV-3, Departmental Management Control Program
> Handbook.

2\. [Explanation of Material Transmitted:]{.underline}

> This Handbook is a revision of the Departmental Management Control
> Handbook, 1840.1 REV-2, dated September 30, 1992. The previous
> Handbook has been updated to reflect current OMB terminology and
> guidance regarding implementation of the Federal Managers\' Financial
> Integrity Act of 1982 and its implementing Circulars[,
> A-123](http://www.whitehouse.gov/omb/circulars/a123/a123.html) and
> [A-127](http://www.whitehouse.gov/omb/circulars/a127/a127.html). It is
> not intended to provide hands-on procedures. The purpose of this
> handbook is to provide policy and general guidance for this program\'s
> implementation within the Department.

3\. [Significant Changes:]{.underline}

-   Revisions reflect HUD's current organization and related management
    responsibilities.

-   Reinforces a mandatory requirement that a Front-End Risk Assessment
    (FERA) be performed on any new program with a funding level totaling
    \$10 million or more and on any substantially revised program or
    administrative function where the revision results in an increase or
    loss that is greater than \$10 million and is equal to a change of 5
    percent in the budget line item. Also, reinforces that certain
    exhibits and a certification be submitted to the Chief Financial
    Officer documenting the results of the FERA review process.

-   Provides a risk assessment form that field and headquarters managers
    and supervisors will complete to provide reasonable assurance
    certification for the annual Federal Managers' Financial Integrity
    Act (FMFIA) process.

4\. [Cancellations:]{.underline}

> This Handbook cancels Handbook 1840.1 REV-2, Departmental Management
> Control Program Handbook dated September, 1992.

5.  [Filing Instructions:]{.underline}

> Remove: Insert:
>
> Handbook 1840.1 REV-2 Handbook 1840.1 REV-3
>
> dated April 1992 dated February 1999

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**FOREWORD**

**[SCOPE]{.underline}**

This manual provides policies, procedures and guidance for carrying out
an effective management control process within the Department. It is
organized in three parts:

-   Chapters 1 through 6 provide guidance for operation of the
    Department\'s Management Control Program. Under this program,
    managers will implement policies, procedures and controls to manage
    risks for existing programs and activities.

-   Chapter 7 provides an overview of risk based monitoring concepts for
    carrying out program oversight responsibilities.

-   Chapter 8 describes the process for conducting Front End Risk
    Assessments (FERAs) on new or substantially revised programs or
    administrative functions. FERAs are reviews by program management
    that document actions required to reduce potential risks.

**[POLICY]{.underline}**

Management control is an on-going process requiring managers to evaluate
their programs and establish appropriate controls to ensure that HUD
programs and activities are efficiently and effectively managed; protect
against fraud, waste and abuse; and follow applicable laws and
regulations. The Department will maximize its use of available resources
by incorporating risk management concepts and strategies in the conduct
of all programs and activities.

**[RESPONSIBILITY]{.underline}**

Implementation of the provisions contained in this handbook requires
involvement by managers at all levels of the Department. In managing
programs and activities, managers will:

-   Identify all risks that may prevent accomplishing program goals and
    objectives;

-   Assess the severity of the risks;

-   Implement policies and procedures for controlling the risks;

-   Allocate available program resources to effectively manage the risks
    in a timely manner; and

-   Provide objective and timely reporting on the status of the risks.