ML20214F196
| ML20214F196 | |
| Person / Time | |
|---|---|
| Issue date: | 05/13/1987 |
| From: | Hiller L NRC |
| To: | Connelly S, Parler W, Taylor J NRC OFFICE OF INSPECTOR & AUDITOR (OIA), NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO), NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| References | |
| NUDOCS 8705220444 | |
| Download: ML20214F196 (8) | |
Text
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Y pa nee UNITED STATES NUCLEAR REZULATORY COMMISSION D E'7 M y/ [ [m 17 a
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MEMORANDUM FOR:
Sharon R. Connelly, Director, OIA William C. Parler, General Counsel James M. Taylor, Deputy Executive Director for Regional Operations James G. Keppler, Director, SP John M. Montgomery, Director, OC James Lieberman, Director OE Paul E. Bird, Director, OP William G. Mcdonald, Director, ARM Edward L. Jordan, Director, AE00 William B. Kerr, Director, SDBU/CR Thomas E. Murley, Director, NRR Hugh L. Thompson, Director, NMSS Eric S. Beckjord, Director, RES William T. Russell, Regional Administrator, Region I Jy Nelson Grace, Regional Administrator, Region II vA. Bert Davis, Regional Administrator, Region III Robert D. Martin, Regional Administrator, Region IV John B. Martin, Regional Administrator, Region V FROM:
Lee Hiller, Chairman Internal Control Committee
SUBJECT:
INTERNAL CONTROL COMMITTEE FOR 1987 We are planning the Internal Control Committee (ICC) program for 1987.
By separate memorandum, I have asked the major offices to designate a representa-tive to the ICC so that the Committee membership will correspond with the recent NRC reorganization.
The purpose of this memorandum is to request all offices to designate an internal control coordinator who will work with the ICC staff.
Accordingly, please name your representative on the attached form (Attachment 1) and return it to Gordon Fowler, mail stop 12109 MNBB, by May 22, 1987.
To assist you in making your selection, I have attached NRC Manual Chapter 0801, " Internal Controls." (Section 034 lists the responsibilities of the offices for internal controls.)
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V Lee Hiller, Chairman Internal Control Committee Attachments (2):
As stated p 10 W gd g 52 g 4 07o5:3
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Designation of Internal Control Coordinator for the (Office Name)
(Name of Designee)
(Telephone Number)
(Mail Stop)
(Signature of Of fice Director / Regional Administrator)
Title / Office Date i
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U.S. NUCLEAR REGULATORY COMMISSION NRC MANUAL Volume: 0000 General Administration Part :
0800 Management Principles and Techniques RM CH APTER 0801 INTERNAL CONTROLS i
0801-01 COVERAGE This chapter sets forth the policies and activities to be followed by the NRC in establishing, maintaining, improving as necessary, and reviewing internal controls for the Agency's programs and activities to comply with the Federal Managers' Financial Integrity Act of 1982 (P.L.97-255) and OMB Circular A-123, " Internal Control Systems."
i The scope of required reviews and Agency actions required by the Federal Managers' Financial Integrity Act encompasses all programmatic and administra-tive functions of the Agency with the exception of policy making activities.
Internal control is a prerequisite management tool and activities prescribed by this chapter are Intended to increase the awareness of and involvement by Agency managers and staff in this area.
0801-02 OBJECTIVES 021 To provide management with reasonable assurance that assets and resources are safeguarded against waste, loss, unauthorized use or misappro-priation; transactions are executed in accordance with authorization; finan-cial and statistical records and reports are reliable; applicable laws, regula-tions and policies are adhered to; and resources are efficiently and effec-tively managed.
The objectives of internal control apply to all program and administrative activities.
i 022 To involve all levels of NRC management in assuring the adequacy of internal controls.
4 023 To ensure that new programs incorporate effective systems of internal control.
i 024 To ensure that systems of internal control are evaluated on an ongoing basis.
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N RC-0801-03 INTERNAL CONTROLS 4
0801-03 RESPONSIBILITIES AND AUTHORITIES
.031 The Executive Director for Operations, as the designated agency official:
a..
establishes maintains a system of internal control within NRC for its activities and. programs, including the determination that the systems are 3
functioning as prescribed and are modified, as appropriate, as conditions change.
b.
reports to the Chairman, NRC, the status of the Agency's compliance with the Federal Managers' Financial integrity Act and OMB Circular A-123, and recommends to the Chairman the Agency's report to be sent to the Presi-dont and the Congress as required, at the end of each calendar year.
032 The Internal Control Committee (ICC) is chaired by the Deputy i
Controller / Deputy Olrector, Office of Resource Management, and is composed of representatives from the following NRC offices:
Office of Administration l-Director, Division of Contracts, Member Director, Division of Technical Information and l
Document Control, Member l
e Director, Program Support Staff, Member Office of Inspection and Enforcement j
Director, Program Support and Analysis Staff, Member Office of Nuclear Material Safety and Safeguards I
Director, Planning and Program Analysis Staff, Member Office of Nuclear Reactor Regulation Director, Planning and Program Analysis Staff, Member Office of Nuclear Regulatory Research Director, Policy, Planning and Control Staff, Member Office of Resource Management Deputy Director, Division of Accounting and Finance, Member Deputy Director, Division of Automated Information Services, Member Office of the Executive Director for Operations Executive Coordinator for Regional Operations, l
Member i
Regional Office Division of Resource Management and Administration, i
Member (to be appointed annually on a rotational basis l
by the EDO)
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1,NTERNAL CONTROLS-N RC-0801-033 Also participating, with the ICC, as observers, are:
OfTIce of Inspector and Auditor, to provide technical assistance.
Office of the Executive Legal Director, to provide appropriate legal assistance as necessary.
The International Control Committee:
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a.
recommends to the EDO guidelines and procedures for Agency l
compliance with the Federal Managers' Financial Integrity Act and OM8, Circular A-123.
I b.
reviews ' and recommends appropriate assessable units; reviews the methods for conducting vulnerability assessments and evaluates results of these i.-
assessments; evaluates internal control reviews performed by the offices or the Office of inspector and Auditor; consolidates responses from the offices and prepares an internal control report summarizing Agency activities for EDO j
review.
L c.
prepares the initial report for the Agency to respond annually to the Federal Managers' Financial integrity Act.
033 ' The Director, Office of inspector and Auditor (Ol A):
l a.
annually advises the Chairman and Commissioners whether the Agency's internal control evaluation process has been conducted in accord-ance with the requirements of the Federal Managers' Financial Integrity Act j
of 1982.
I b,
conducts internal control reviews as necessary to support its evaluation as stated above, at the request of the Commission, or of the ICC.
c.
attends all ICC meetings to provide technical assistance in the Agency's effort to evaluate and improve internal controls.
This assistance is in addition to the reviews of internal control documentation and systems under-l-
taken at OI A's initiative or at the request of the Commission or the ICC, and the reports issued as a result of these reviews.
d.
provides to the Chairman, ICC, copies of all Ol A and GAO audit reports.
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e.
provides to the Chairman, ICC, copies of appropriate Ol A Investiga-tive reports.
f.
follows up annually on the recommendations made to the Chairman, ICC, in prior years, as part of Ol A's annual reviews as stated above.
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i-Acoroved:
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- NRC-0801-034 INTERNAL CONTROLS i
t 034 Directors o'f Offices and Recional Administrators:
a.
ensure the development, implementation and maintenance of internal controls within their respective activities and programs to prevent or deter l
the loss or abuse of public assets.
b.
ensure that supervisors are both knowledgeable of the internal controls in their units and, as part of their routine duties, monitor the internal control systems to ensure that they are operating as designated and are achieving the planned results.
c.
notify the -Chairman, ICC, when significant changes of existing internal controls take place and when significant' new internal controls are being developed.
i d.
ensura. that the vulnerability assessments, interral control reviews l
and supporting data pertaining to NRC activities and programs' under their jurisdiction subject to the internal controls are provided to tne ICC.
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promptly evaluate findings and recommendations reported by auditors;
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determine proper action in response to audit findings and recommendations; o
and complete, within established time frames, all actions that correct or otherwise resolve the matters brought to management's attention.
f.
designate an office internal control coordinator responsible for ques-tions regarding internal controls in their own offices and to support manage-l ment and organizational internal control activities.
0801-04 DEFINITIONS i
j 041 Internal Control.
The plan of organization, methods and procedures adopted by NRC to provide the reasonable assurance that obligations and costs i
are in compliance with applicable law; the safeguarding of funds, property, and other assets against waste, loss, unauthorized use, or misappropriation; and the proper recording and accounting for revenues, expenditures and assets applicable to agency operations to permit the preparation of accounts and reliable financial and statistical reports.
042 Internal Control Documentation.
Written
- policies, organization charts, procedural write-ups, manuals, memoranda, flow charts, decision tables, completed questionnaires, software, and related written materials used to describe the ' internal control methods and measures, to communicate responsi-i bilities and authorities for operating such methods and measures, and to serve as a reference for persons reviewing the internal controls and their function-ing.
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043 Internal Control Review.
A detailed examination of a system of f
l Internal control to determine whether adequate control measures exist and are implemented to prevent or detect the occurrence of potential risks in a cost effective manner.
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y INTERNAL CONTROLS N R C-0801-044 044 Internal _ Control System.
The sum of NRC's methods and measures used to achieve the objectives of internal control.
An internal control system should not'be a separate system, but an integral part of the systems used to operate the programs and functions performed.
045 Vulnerability Assessment.
A review of the susceptibility of a program or function to waste, loss, unauthorized use or misappropriation.
0801-05 BASIC REQUIREMENTS 051 Appilcability.
This chapter applies to and shall be followed by all NRC offices.
052 Standards of internal Control.
The following list of standards shall be adhered to in all NRC systems of internal control:
a.
Documentation -- Internal control systems and all transactions and other significant events are to be clearly documented, and the documentation is to be readily available for examination.
b.
Recording of Transaction and Events
' Transactions and other events are to be promptly and properly classified, c.
Executive of Transactions and Events -- Independent evidence is to be maintained that authorizations are issued by persons acting within the scope of their authority and that the transactions conform with the terms of the authorizations.
d.
Separation of Duties -- Key duties such as authorizing, approving, recording transactions, issuing or receiving assets, making payments, and reviewing and auditing shall be assigned to separate individuals to minimize the risk of loss to the Government, internal control depends largely on the elimination of opportunities to conceal errors or irregularities.
This, in turn, depends on the assignment of work so that no one individual controls all phases of an activity or transaction, thereby creating a situation that permits error or irregularities to go undetected.
e.
Supervision -- Quallfled and continuous supervision is to be provided to ensure that approved procedures are follewed.
Lines of personal responsibility and accountability are to be clearly established.
f.
Access to and Accountability for Resources Direct and indirect access to resource documents and records is to be limited to authorized Individuals, and accountability ter the custody and' use of resources is to be assigned and maintained.
Periodic comparison shall be made of the resources with the recorded accountability to determine whether the two agree.
The frequency of the comparison shall be a function of the vulnerability of the asset.
.i N RC-0401-053 INTERNAL CONTROL.S g.
Competent Personnel -- Reasonable care shall be taken to ensure that key persOnner have high standards of integrity and are competent, by education, training or experience to accomplish their assigned duties, as well as understand the importance of developing and implementing good internal controls.
h.
Reasonable Assurance Internal control systems are to provide reasonable assurance that the objectives of the systems will be accomplished.
This standard recognizes that the cost of internal control should not exceed the benefits derived therefrom, and that the benefits consist of reductions in the risks of falling to achieve the stated control objectives.
053 References, s.
The Federal Managers' Financial Integrity Act of 1982 (P.L. 97 255) requires the adherence to internal accounting and administrative control standards prescribed by the Comptroller General; conduct of an annual evaluation by each executive agency of these systems; and submittal of an annual statement by the head of each executive agency to the President and the Congress on the status of the Agency's system of internal control, b.
Guidelines for the Evaluation and improvement of and Reporting on Internal Control Systems in the Federal Government, OMS,
December 1982.
c.
The Accounting and Auditing Act of 1950 requires the head of each agency to establish and maintain adequate systems of internal controls.
i d.
The Antideficiency Act, 31 U.S.C.1514, requires that agency sys-tems for the control of funds be approved by the Director of OMS.
e.
OMB Circular No. A-123 (Revised 8/16/83), " internal Control Sys-tems,"
requires that agencies establish,
- maintain, evaluate, improve and report on internal control in their program and admin-letrative activities.
f.
NRC Management Directives.
t g.
Charters of internal NRC review groups:
l Senior Contract Review Board (SCRB), April 28, 1983 Waste Management Review Group (WMRG), March 31, 1979 Human Factors Review Group, February 23, 1983 Contract Review Board, March 3,1977 (Procedures).
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