20060 INTERNAL CONTROL REPORTING
(Revised 03/08)
Pursuant to the FISMA (GS 13405), the head of each state entity shall, on a biennial basis but no later than December 31 of each odd-numbered year, conduct an internal review and prepare a report on the adequacy of their entity's system's of internal accounting and administrative control in accordance with the guide prepared by the DOF. The report, including the entity's response to the review recommendations, shall identify any material inadequacy or material weakness in an entity's systems of internal accounting and administrative control that prevents the head of the entity from stating that the entity's systems comply with the FISMA. The submission should consist of a transmittal letter, the review report on internal accounting and administrative control, and management's response to the review report.
For entities that report to an Agency Secretary, the transmittal letter should be addressed and sent to the Agency Secretary. The entity should forward copies of the transmital letter and review report to the Legislature, the State Auditor, the Governor, the Director of the Department of Finance, and the State Library.
For entities that do not report to an Agency Secretary, the transmittal letter should be addressed and sent to the Director of the Department of Finance. The entity should forward copies of the transmittal letter and review report to the Legislature, the State Auditor, the Governor, and the State Library.
Within 30 days after the report is submitted, the entity will provide to the Director of the Department of Finance a plan and schedule for correcting the identified inadequancies and weaknesses in the review report. The plan will be updated and submitted every six months until all corrections are completed.
The state entity head must investigate any allegation that an employee provided false or misleading information in connection with the evaluation of an entity's system of internal control or in connection with the preparation of the biennial report. The state entity head must submit a report on all the allegations made and the actions taken to resolve them to the Director of the Department of Finance within 90 days from receiving the allegation.
All internal control reviews are to be completed in accordance with the guide prepared by the DOF. Internal audit units will conduct these reviews in accordance with appropriate standards as required by GC 13886.5. The review will examine internal accounting control and fiscal compliance practices in use at the time of the review. The transmittal letter and guide can be obtained from the OSAE, or electronically at the OSAE web page at http://www.dof.ca.gov/osae/.
In conjunction with the audits performed by internal audit units, OSAE is available to assist entity heads in evaluating their internal control reporting responsibilities.
