# Presentation: 541015

## Report Tile

**Financial Controls and Risk Management – Building a Roadmap Through Practical Lessons Learned**

- UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

## U.S. Office of Personnel Management (OPM)OPM at a Glance

**	****OPM:  **Our mission is to ensure the Federal Government has an effective civilian workforce.

## U.S. Office of Personnel Management (OPM)OPM at a Glance

**	****Organization:  **OPM operates from its headquarters in the Theodore Roosevelt Federal Office Building in Washington, DC.  OPM delivers a variety of products and services with the help of its 4,800 employees in the District of Columbia and in 16 locations across the country, and operating centers in Pittsburgh and Boyers, PA; Ft. Meade, MD; and Macon, GA.

## U.S. Office of Personnel Management (OPM)OPM at a Glance

- FY 2006 Total Assets and/or Liabilities and Net Position:  $749.7 Billion.
-   Retirement Program
-   Health Benefits Program
-   Life Insurance Program
-   Revolving Fund Programs
-   Salaries and Expenses
- FY 2006 Audit Opinion:  **Unqualified**, no material weaknesses.
- FY 2006 Assurance on Internal Controls over Financial Reporting:  **Unqualified**, no material weaknesses.

## A-123/Appendix A Challenges:  Effective Controls Over Financial Reporting

- Ensuring top management and program officials are full partners, and achieving the Agency mission in a cost-effective manner is the core goal of the financial management organization.
- Implementing a results-oriented financial management culture.
- Building an internal control foundation and infrastructure to carry the workload effectively.
- Ensuring risk management is a core component.
- Raising management awareness; training managers and staff.
- Expanding internal controls beyond financial management.

## Managing Internal Control Challenges: The OPM Approach

- Capital Investment Committee:  Chaired by the CFO, the Board includes the OPM Director, Deputy Director, and other key top executives.

**Ensuring top management and program officials are full partners, and that achieving the Agency mission cost effectively is the core goal of the financial management organization:**

## Managing Internal Control Challenges: The OPM Approach

- Senior Assessment Board for Internal Control over Financial Reporting:  Chaired by the CFO, the Board includes representatives of all key OPM program and institutional offices, and the Office of Inspector General in an advisory capacity.

## Managing Internal Control Challenges: The OPM Approach

- Financial Systems Modernization Steering Committee:  Chaired by the CFO, the Committee includes principal OCFO executives and senior representatives from all key OPM program and institutional offices.

## Managing Internal Control Challenges: The OPM Approach

- OCFO outreach to OPM offices:  Regular forums are conducted to cover reporting status, program requirements and performance, and to engage key customers in discussion of program and financial management issues.

## Managing Internal Control Challenges:  The OPM Approach

- The Agency’s strategic plan has been updated to link program goals with financial management objectives and internal controls over reporting.
- OPM’s implementation of A-123/Appendix A follows a disciplined program management approach:  identifying, tracking, achieving, and validating tasks.
- Key financial management outcomes, including internal controls, are specifically linked to individual executive, manager, and employee performance plans.
- The new Capital Investment Committee requires business case information for all new investments (i.e., not just capital asset investments).

**Implementing a results-oriented financial management culture:**

## Managing Internal Control Challenges:  The OPM Approach

- The OCFO Center for Internal Control and Risk Management (CICRM), with an interdisciplinary staff of audit, inspection, and evaluation specialists, serves as the CFO’s principal facilitator for improved internal control and risk management.

**Building an internal control foundation and infrastructure:**

## Managing Internal Control Challenges:  The OPM Approach

- Assessment Support Team:  Chaired by the Associate CFO/CICRM, the Team consists of representatives of key program, financial management, information technology, and procurement units.

## Managing Internal Control Challenges:  The OPM Approach

- OCFO maintains open communication and shares information with the Office of Inspector General and the external auditor to help ensure that audit follow-up is effective, timely, and tracked.

## Managing Internal Control Challenges:  The OPM Approach

- OCFO Audit Follow-up Tracking System (AFTS):  Developed to track OIG audit recommendations and OPM corrective actions, and to document A-123/Appendix testing and mediation actions.

## Managing Internal Control Challenges:  The OPM Approach

- The Center is working closely with other OPM offices to improve its overall directives management system and with the accounting, budget, and procurement staffs to update financial management policies, procedures, work instructions, and other controls.

## Managing Internal Control Challenges:  The OPM Approach

- Center for Internal Control and Risk Management maintains and routinely updates an Agency Risk Inventory, based on:
-   OIG
-   GAO audits
-   Self-assessments
-   Internal control and risk management reviews
- Based on the risk inventory, a High Risk Listing is reported monthly including the status of mitigation actions.
- The Center for Internal Control and Risk Management supports the OPM Financial Modernization Project Office with risk assessment and internal control services.

**Ensuring risk management is a core component:**

## Managing Internal Control Challenges:  The OPM Approach

- The Center for Internal Control and Risk Management briefs managers and employees on the benefits and requirements of internal control and risk management.
- The Center, in conjunction with the Senior Assessment Board and Assessment Support Team, developed a self-assessment tool that highlights risk assessment and mitigation efforts.
- The Center developed and implemented an introductory training focused on financial controls and risk management (almost 300 trained to date).
- Specialized training was developed and offered based on customer interest and need (e.g., information technology internal control and risk management class for designated security officers).
- Center managers and staff work closely with Agency customers to troubleshoot issues.

**Raising management awareness; training managers and staff:**

## Managing Internal Control Challenges:  The OPM Approach

- The CFO and Center for Internal Control and Risk Management have lead responsibilities for financial controls AND the facilitating Agency’s compliance with the Federal Managers’ Financial Integrity Act.  Risk and control activities are reported for all OPM operations, not just financial management.
- The Center conducts internal control reviews over program activities as well as financial management activities.
- The Center will provide staff support to the newly created Capital Investment Committee which will review and approve all significant investments.

**Expanding internal controls beyond financial management:**

## U.S. Office of Personnel Management (OPM)Contact Information

**David M. Cushing**
**Associate Chief Financial Officer for**
**Internal Control & Risk Management**
**202-606-4660**
**David.Cushing@opm.gov**