scope:

PURPOSE. This Instruction establishes policy that identifies assessable organizational elements and requires that these assessable organizational elements report to the Commandant an explicit level of assurance over the effectiveness and efficiency of control activities under their supervision and direction. Each assessable organizational element is responsible for providing a condensed statement of assurance (SOA) over internal controls over operations (ICOOP) and compliance with laws and regulations. This instruction preserves responsibility within the Office of Internal Controls for coordinating, documenting and reporting on internal controls over financial reporting (ICOFR). This Instruction supports compliance with References (a) through (d), and directs Coast Guard managers to establish, maintain, review, and improve internal controls through active involvement in annual assessments that support the Commandant's Annual Internal Control Assurance Statement in the areas noted below:

a. Section 2 of Reference (a) requires an annual statement on whether there is reasonable assurance that the Agency's internal controls are achieving their intended objectives, and a report on the material weaknesses in the Agency's controls.

b. Section 4 of Reference (a) requires an annual statement on whether the Agency's financial management systems conform with government-wide requirements as identified in Reference (c).

c. Per Reference (a), this Instruction establishes policy to ensure that the following objectives are met:

(1) Resources are effectively and efficiently managed and applicable laws, regulations, and policies are complied with;

(2) Financial and all other resources are safeguarded from unauthorized use or disposition;

(3) Financial transactions are executed in accordance with authorizations;

(4) Records and reports are reliable (accurate and timely information is obtained, maintained, reported, and used for decision making);

(5) Financial systems conform to government-wide standards and appropriate internal controls are applied to all system inputs, processing and outputs; and

(6) Processes are managed to effectively and efficiently meet the objectives of operations, and program performance is measured and assessed.

d. Reference (d) requires an assessment of the completeness and reliability of the Agency's performance and financial data used in the Annual Financial Report.