As commanders and managers, we strive to achieve the command’s missions and goals. We must also provide accountability for our operations.
In order to succeed, we must continually assess and evaluate the internal control structure for which we are in charge. This is to assure commanders that the internal control structure of the organization is well designed and operated, providing reasonable assurances that the unit’s missions are being achieved. In particular, commanders and managers must continue to examine their internal controls to determine unit performance, how it may be improved and the degree to which it helps identify and address major risks for fraud, waste, abuse and mismanagement.
The first standard of internal control is the control environment. Commanders, managers and all employees should create an environment throughout the command that sets a positive and supportive attitude toward internal controls and reliable administration.
Secondly, commander’s internal control standards must address risk assessments. A prerequisite to risk assessment is establishing clear, consistent command goals and objectives at the command level down to the direct mission level. Once the mission is received, commanders and managers must identify the inherent risks that could impede efficient and effective mission accomplishment.
An effective internal control program should provide commanders with an assessment of risks the unit faces from internal and external sources. Once risks are identified, they should be analyzed for their possible second and third order of effect. Commanders then must devise approaches for risk management and determine internal control actions that lessen risks and achieve the mission, assure effective operations, provide reliable financial reporting and comply with applicable laws and regulations.
The third internal control standard addresses control activities. These are the policies, procedures, techniques and mechanisms that give commanders and managers reasonable assurance that command directives designed to lessen those risks identified are carried out. A commander’s internal control program is an integral part of unit planning, implementation and process review. It is essential that proper stewardship and accountability for government resources achieve effective and efficient program results. In assessing the adequacy of internal controls, a commander or manager must consider whether the proper control activities are established, adequate and operating effectively.
It is vital that internal control activities occur at all levels and functions of the command to be completely effective. These include a wide range of diverse activities such as approvals, authorizations, verifications, reconciliations, performance reviews, Command Supply Discipline Program (CSDP), Organizational Inspection Program (OIP) and security activities.
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