Management
Integrity: Controls, Compliance, and Challenges
The Federal
Managers Financial Integrity Act of 1982 (FMFIA) requires an annual
review of the adequacy of NSF program and activity management controls.
The NSF Management Controls Committee (MCC), chaired by the Chief Financial
Officer, is responsible for oversight and for reporting of the Foundations
management and internal control program to the NSF Director on an annual
basis.
The MCC requires
that individual offices provide assurance statements each year on the
FMFIA reviews within their own organizations on program and activity management
controls. Individual assurance statements from each of NSFs Assistant
Directors and Staff Office Directors serve as the primary basis for NSFs
assurance that management controls are adequate, (Section 2 of FMFIA)
and that NSF systems are in compliance with all applicable laws and administrative
requirements, including OMB Circulars A-123 (Management Accountability
and Control) and A-127 (Financial Management Systems) and Section 4 of
FMFIA. The MCC asserted to the NSF Director that agency management controls
and financial management systems taken as whole provide reasonable assurance
that the objectives of FMFIA were achieved for FY 2000. The MCC also provided
reasonable assurance that the NSF systems that are being used to compile
information for NSFs annual GPRA Performance Report have been evaluated
and provide adequate controls. It was also determined that agency assets
were properly safeguarded.
Through an independent
assessment conducted during the annual CFO Act audit, NSF internal accounting
systems were found to be compliant with the Federal Financial Management
Improvement Act of 1996 (FFMIA). During the FY 2000 certification process,
the MCC did not identify any material weaknesses as defined by OMB guidance.
The MCC evaluated the progress made on one repeat reportable condition
in the FY 1999 financial statement audit related to the recording and
accountability of property, plant, and equipment maintained by a NSF contractor.
The MCC identified that credible progress to correct this reportable condition
had been made in FY 2000. An independent assessment made during this years
annual CFO audit confirmed this condition has been resolved. The MCC reported
several management challenges identified through the FMFIA assessment
process which do not impact the internal controls of the Foundation, but
warrant attention of senior management in order to maintain the long-term
effectiveness of operations at NSF. These challenges include data and
systems management activities, program management support to include training
and outreach, recruitment and retention of staff, and access security
to systems. The MCC will address these issues, most of which require long-term
attention.
IGs
Statement of Management and Performance Challenges
As required
by the Reports Consolidation Act of 2000, this report includes a statement
by the Inspector General (IG) addressing NSFs most serious management
and performance challenges. This statement can be found in the section,
Other Reporting Requirements. The IGs list of management
and performance challenges addresses four primary areas: System and Data
Management; Program Management; Staffing and Human Resource Management;
and Security and Controls. As noted in the IGs statement, these
management challenges have been acknowledged and are being addressed by
NSF management. Following
the IGs statement is the Directors response.
The
Directors Statement of Assurance for FY 2000
Consistent
with the provisions of the Reports Consolidation Act of 2000, and
with the approval of the Office of Management and Budget, NSF has
included the results of the management evaluations required by the
Federal Managers Financial Integrity Act (FMFIA) for the period
ending September 30, 2000 into the annual Accountability Report.
Based on internal
management evaluations, and in conjunction with results of independent
financial statement audits, NSF can provide reasonable assurance
that the objectives of Section 2 of FMFIA (internal controls) and
Section 4 of FMFIA (financial management systems) have been achieved.
NSF can also state that it is in substantial compliance with the
Federal Financial Management Improvement Act (FFMIA) as well.
The NSF Management
Controls Committee (MCC), under the chairmanship of the agencys
Chief Financial Officer, provides continued senior executive attention
to management control issues. The Office of the Inspector General,
represented as an advisory member of the MCC, continues to provide
useful and constructive suggestions for improving the agencys
management controls and financial management policies and practices.
I am confident
that NSFs significant accomplishments in the achievement of
FMFIA objectives will continue and that level of assurance will
be provided for FY 2000 and beyond.
Rita R. Colwell
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