Commonwealth of Massachusetts

Internal Control Questionnaire (ICQ)

NASACT Managing Internal Control with Compliance Technology

January 31, 2007

Agenda

Commonwealth of Massachusetts

Internal Control Law

Awareness of Internal Controls

Internal Control Questionnaire (ICQ)

Comments / Questions

Commonwealth of Massachusetts 10th 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

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

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)

Chapter 647 of the Acts of 1989An Act to Improve Internal Controls at State Agencies

Internal Control Standards

Management’s 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

Awareness of Internal Controls Internal Control Plan Guide

Instructor-lead Training

Hands-on Workshops

Review Internal Control Plans

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, OSA’s Auditors and OSC’s Quality Assurance Bureau

ICQ Categories

A. General InformationB. Internal Control PlanC. Accounting & Fiscal OperationsD. BudgetE. CashF. ProcurementG. Monitoring & Reporting General Program PerformanceH. Payroll & PersonnelI. Fixed AssetsJ. Revenue & ReceivablesK. InvestmentL. Administrative Controls Over Federal FundsM. Representations

ICQ Application

Department Access to ICQ

Administrator Access

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

ICQ Responses

Does the Department document Internal Controls?

Has the Internal Control Plan been updated in the past year…?

98%

2%

YesNo

85%

15%YesNo

Comments / Questions

Contact Information

Julia P. Burns

Director, Quality Assurance Bureau

e-Mail: Julia.Burns@osc.state.ma.us

OSC: www.mass.gov/osc