scope:

PURPOSE. This Instruction provides guidance and information related to meeting the requirements of the Federal Managers' Financial Integrity Act (FMFIA) as interpreted by Office of Management and Budget (OMB) Circular A-123, revised. The content of this Instruction is intended to direct Coast Guard managers regarding their responsibility to establish, maintain, review, and improve internal controls through active involvement in annual assessments that support the Commandant's Annual Assurance Statements in areas noted below.

Internal Controls Over Financial Reporting (ICOFR) - A statement of reasonable assurance with respect to the effectiveness of internal controls for financial reporting reliability and compliance with applicable financial laws and regulations. This assurance requires an assessment of the effectiveness of key controls in each of the ICOFR Key Process areas shown in enclosure (1).

FMFIA Section 2 - A statement of reasonable assurance with respect to the effectiveness of internal controls for program operations. This assurance requires an assessment of internal controls related to program effectiveness and efficiency and compliance with applicable laws and regulations.

FMFIA Section 4 - A statement of reasonable assurance with respect to compliance with federal requirements over financial and mixed systems. This assurance requires an assessment of the level of compliance with specific financial management system requirements identified in references (c) and (d).

Reports Consolidation Act - A statement of reasonable assurance with respect to the reliability of performance information reported for inclusion in the Department of Homeland Security's (DHS) annual Performance and Accountability Report (PAR) as noted in reference (g). This assurance requires an assessment of the processes by which the Coast Guard reports performance and mission cost information in the PAR.

Each of these assessments will include an identification of Material Weaknesses and other Reportable Conditions or non-conformances to be included in the Coast Guard's annual assurance statement to the DHS. Further definition of these conditions is provided in enclosure (3).