1. Commonwealth of Massachusetts Internal Control Questionnaire (ICQ) NSAA / NASC Joint Middle Management Conference Des Moines, IA April 17, 2007

2. Agenda Commonwealth of Massachusetts Internal Control Law Awareness of Internal Controls Internal Control Questionnaire (ICQ) Comments / Questions

3. Commonwealth of Massachusetts 10 th Largest State Fortune 34 company 83,000 Employees / 69,000 Full Time Equivalents $43.4 billion in Total Revenue* $42.8 billion in Total Expenses* * Source Data is Massachusetts 2005 CAFR

4. 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

5. Internal Control Partnership Office of the State Auditor Independent Constitutional Office Independent Audits Issue 250 – 300 audit reports annually Use Generally Accepted Government Auditing Standards Include a review of the departments internal control plan in all audits Office of the State Comptroller Independent agency within the Executive Branch Quality Assurance Bureau Departmental Quality Assurance Reviews include a review of internal control plans Internal Control Guide Annual Internal Control Questionnaire

6. PARTNERS in Sound Financial Management P eople A ccountability R esponsibility T rust N egotiation E fficiency R isk Assessment & Mitigation S olutions

7. Internal Control Implementation At a Glance Internal Control Legislation (1989) Awareness of Internal Controls (1990 – present) Procurement Reform (1996) Annual Internal Control Questionnaire (2000) Implement New Accounting System (2004) Office of the Comptroller, Quality Assurance Bureau (2005)

8. Chapter 647 of the Acts of 1989 An Act to Improve Internal Controls at State Agencies Internal Control Standards Managements 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 Internal control guidance provided by the OSC

9. Awareness of Internal Controls Internal Control Guide Instructor-lead Training Hands-on Workshops, as requested Review / Audit Internal Control Plans

10. Internal Control Questionnaire ICQ is a web-based application ASP script engine / SQL database Debuted in 2000 / Updated Annually FY2006 – 273 Questions in 12 Sections / Business Areas Answers are Yes, No or Not Applicable Department representations are incorporated into the ICQ Department Head Internal Control Officer Chief Fiscal Officer Answers are available to the Independent Auditors, OSAs Auditors and OSCs Quality Assurance Bureau

11. ICQ Categories A. General Information B. Internal Control Plan C. Accounting & Fiscal Operations D. Budget E. Cash F. Procurement G. Monitoring & Reporting General Program Performance H. Payroll & Personnel I. Fixed Assets J. Revenue & Receivables K. Investment L. Administrative Controls Over Federal Funds M. Representations

12. ICQ Application

13. Department Access to ICQ

28. ICQ Application

29. Administrator Access to the ICQ

40. 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 Assist agencies in evaluating and modifying Internal Controls

41. ICQ Responses Does the Department document Internal Controls? Has the Internal Control Plan been updated in the past year…?

42. Whats New for FY2007? Questions on… Ethics & Compliance Management Philosophy & Operating Style Risk Assessment Modified the application to meet new Commonwealth standards. Prompt to change password.

43. New for FY2007 ICQ

44. Comments / Questions

45. Contact Information Julia P. Burns Director, Quality Assurance Bureau e-Mail: Julia.Burns@osc.state.ma.usJulia.Burns@osc.state.ma.us OSC: www.mass.gov/oscwww.mass.gov/osc