PROPOSED HEADQUARTERS NOTICE-INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROL DIRECTIVE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B01152R000400520038-8
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 16
• Document Creation Date: December 21, 2016
• Document Release Date: March 26, 2008
• Sequence Number: 38
• Publication Date: November 14, 1983
• Content Type: MEMO

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ROUTING AND ,.TRANSMITTAL SLIP
E0/DDA
jCoordination
REMARKS
Original will be copied for other addressees
after DDA has signed.
DO NOT use this form as a RECORD of approvals, concurrences, disposals,
clearances, and similar actions 11 1
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5041-102 OPTIONAL. FORM 41 (Rev. 7-76) Prescribed by GSA
FPMR t&1 CFR) 101-11.206
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Date
5 December 1983
TO:
1.
(Name, office symbol, room number,
building, Agency/Post)
Mr. Fitzwater
Initials.
Date
3.
4.
I13.
ction
File
Note and Return
Approval
For Clearance
Per Conversation
As Requested
For Correction
Prepare Reply
irculate
For Your Information
See Me
r-omment
Investigate
Signature
Coordination
Justi
REMARKS
from OF called to ask if you'
could announce at the DCI Staff Meeting tomorrow
that the DCI approved a paper on "Internal Accounting
and Administrative-Control Directive" that will
require each Deputy Director,to forward to the
Inspector General by 16 December, a certification
that says: (highlighted at paperclip). This is
as an alert to the DDs that this short deadline
requirement is forthcoming.
Karen
P.S. Office of, Finance is in the process of getting
the notice out-.
DO NOT use this form as a RECORD of approvals, concurrences, disposals,
clearances, and similar actions a
FROM: (Name, org. symbol, Agency/Post)
5041-102 OPTIONAL FORM 41 (Rev. 7-76).
Prescribed by GSA
_ _ FPYR (&I CFR) 101-11.206
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li ?
ROUTING AND RECORD SHEET ~~D~ ogi t
SUBJECT: (Optional) Proposed Headquarters Notice - Internal-Account- ng and 71 -5 `"- '
Administrative Control Directive
FROM: Director of Finance
Bld
1212 Ke
EXTENSION
NO.
Ref: 83-3040
g.
y
DATE
14 November 1983
TO: (Officer designation, room number, and
building)
DATE
OFFICER'S
COMMENTS (Number each comment to show from whom
RECEIVED
FORWARDED
INITIALS
to whom. Draw a line across column after each comment.)
DDA
7D18 Hqs.
1
Change in wording paragraph 5
of the memoranda and in paragraph
5d of the notice.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
FORM 61 p USE PREVIOUS
1_79 EDITIONS
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STAT
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? ADMINISI'RA`"IVE-INTERNAL USE *Y
MEMORANDUM FOR: Director of Central Intelligence
VIA: Deputy Director of Central Intelligence
Executive Director
Inspector General
General Counsel
Deputy Director for Administration
FROM: Allen R. Elkins
Director of Finance
14 NOV 1983
SUBJECT: proposed Headquarters Notice - Internal Accounting and
Administrative Control Directive
1. Attached is a recommended Headquarters Notice which would prescribe
Agency policies and standards for internal controls as required by the Federal
Managers' Financial Integrity Act of 1982 (PL 97-255, approved 8 September
1982). The intent of internal controls is to reasonably ensure effective
control over, and accountability for, assets and make certain of the
day-to-day involvement of Agency chains of command in the process of
appropriate authorization and approval, consistent with standards prescribed
by the Comptroller General.
2. As further required by the Act, the Director of Management and Budget
has established guidelines that the head of each Executive agency shall follow
in evaluating the internal control systems of the agency to decide whether the
systems are providing the necessary effective control and accountability for
assets. By 31 December of each year (beginning in 1983), the head of each
Executive agency, based on the foregoing evaluation, shall prepare a statement
on whether the internal control systems of the agency are in compliance with
the requirements of the Act. If the head of an agency decides the systems are
not in compliance, the statement shall include a report identifying any
material weakness in the systems and describing the plans and schedule for
correcting the weakness. All statements and reports will be signed by the
head of each Executive agency and submitted to the President and Congress.
3. Essentially, the Federal Managers' Financial Integrity Act is an
expansion of the Budget and Accounting Procedures Act of 1950. It is a
positive effort to transform the expectations of the 1950 Act into reality by
affixing personal responsibility and definition of requirements for reducing
fraud, improving management controls, and eliminating errors in the
administration of Government programs. This Agency is in substantial
compliance with the requirement for systems of internal controls through its
organizational structure and regulatory system. The assignment of individual
authorities and responsibilities to senior Agency officials for activities
within their organizations provide the on-going planning, direction, and
control mechanisms for evaluation of the effectiveness of our systems
throughout the Agency.
DD/A Register
3-30 6
ADMINISTRATIVE-INTERNAL USE ONLY
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? AMUNISTRATIVE-IN TERN L USE A
4. The OMB guidelines require a periodic review of the susceptibility of
a program or function to the occurrence of waste, loss, unauthorized use, or
misappropriation. Such reviews are known as vulnerability assessments and are
the mechanism with which an agency can determine the relative potential for
loss in programs and functions and schedule internal control reviews and
related action. Although not specifically addressed in the proposed notice,
it is intended that these assessments be accomplished by the Executive
Committee based on their own working knowledge of the programs and
administrative functions, their general impressions about the control
environment, and the effectiveness of existing controls. This can be done at
periodic sessions of the Committee called to review selected subjects such as
operational approval and regulatory systems, etc. The requirements for
vulnerability assessments are that: (1) the process and the major
considerations in determining the relative rankings are documented and (2) the
agency head will approve and defend their rankings.
5. In sum, publication of the proposed notice will formalize the
structure and methods of the Agency's internal control systems. It provides
for annual statements, assessing the operation of these controls, to be
prepared by the Directors of ICS and N'IFSO, Deputy Directors, Heads of
Independent Offices, and the Director of Finance. The statements will be
reviewed by the Inspector General and serve as the basis for your report to
the President and Congress. A proposed internal control statement has been
prepared as an attachment to the notice. As required by the Act, it includes
a statement concerning conformance of the Agency accounting system to the
principles, standards, and requirements of the Comptroller General.
6. Given your approval of this document and any revisions that may be
required, I will forward the final version to Regulations Control Division,
OIS, for processing and publication under your signature.
STAT
ADMINISTRATIVE-INTERNAL USE CNLY
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STAT
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This Notice Expires Only
Upon Publication of a Regulation
INTERNAL ACOWUNTINC3 AND ADMINISTRATIVE CONTROL DIRECTIVE
1. The purpose of this notice is to share with you my interest in and
commitment to the effective application of the Agency systems of internal
accounting and administrative controls and to carry out my responsibilities
under the Federal Managers' Financial Integrity Act of 1982. These
responsibilities include both those assigned to me as Director of Central
Intelligence and as head of the Central Intelligence Agency as well. Although
policy independent of the Agency, the National Intelligence Emergency Support
Office (NIESO) and the Intelligency Community Staff (ICS) receive overall
administrative and financial operations support from the Agency and are
governed by and derive their administrative authority from the statutes,
Executive Orders, directives, regulations and procedures applicable to the
Agency. This notice will be issued as a permanent regulation at the earliest
possible time. It is effective immediately.
2. The objectives of the Agency internal accounting and administrative
control systems are to provide management with reasonable, but not absolute
assurance that financial and other resources are safeguarded from unauthorized
use or disposition; that transactions and operations are appropriately
authorized and approved; that financial and statistical. reports and records are
timely, accurate and reliable; and that resources are efficiently and
effectively managed.
STAT
STAT
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? is
3. The President and the Congress have shown a keen interest in this
subject as evidenced by the enactment of the Federal Managers' Financial
Integrity Act of 1982 (PL 97-255, approved 8 September 1982). That Act
requires the Head of each executive department and agency to report annually to
the President and to the Congress on the effectiveness of the agency's systems
of internal accounting and administrative control.
4. The Central Intelligence Agency has a long and proud history of
effective management and adherence to law and policy. The nature of our
business requires that we have strong internal accounting and administrative
control systems and a high degree of disciplined compliance with those
systems. We therefore need to make only minor changes to comply with the Act.
5. The following paragraphs define internal controls, describe the
internal accounting and administrative control systems of this Agency and set
forth the policy and procedures by which control systems are to be reviewed and
reported by senior officials. These reports will culminate in corrective action
wherever necessary and will form the basis of my annual report to the President
and the Congress.
Internal Controls Defined
(1) Internal control is the plan of organization and all of the
methods and procedures the management of an entity adopts to
ensure that:
- activities are conducted in accordance with applicable
laws, regulations and policies;
- information is recorded and reported properly;
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- resources are safeguarded against loss due to errors and
deliberate acts of wrongdoing; and
- activities are carried out with due regard for economy,
efficiency and effectiveness.
(2) Internal controls do not require separate systems within an
entity. On the contrary, they should be an integral part of the
management system which is established to operate programs.
b. Agency Internal Accounting and Administrative Control Systems
(1) The Agency's organizational structure and the regulatory
system are essential components of its internal accounting and
administrative control systems. The DCI and DDCI assign
authority and responsibility to the Executive Director; the
Director of the Intelligence Community Staff; the Director of
NIESO; the Deputy Directors for Operations, Intelligence, Science
and Technology, and Administration; and the Heads of Independent
offices. These managers are responsible for activities within
their organizations and are expected to direct officials at
descending levels of management in the specific methods and
procedures to be used in discharging the responsibilities of the
lower level components. The internal control systems also have a
built-in series of checks and balances through the assignment of
specific Agency-wide functional responsibilities to such senior
Agency officials as the General Counsel and the Directors of
Personnel, Security, Finance and Logistics. These divisions of
responsibility provide a control over limited resources to ensure
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their proper use and help to identify any negligence,
carelessness and inefficiency which may occur. Performance
appraisals for employees having significant management
responsibility will contain appropriate comments on execution of
assigned internal control duties.
(2) The internal accounting and administrative control systems
are not limited to financial activities and resources but apply
with equal force and importance tp the acquisition and use of
personal services, property, and contractual services required
for the execution of program activities throughout the Agency.
(3) The internal accounting and administrative control systems
are further strengthened by:
(a) employees who, under the provisions
are responsible for reporting any instance in which
the employee has reason to believe that
- government funds are being obligated or expended
contrary to policies set forth in regulations;
- past, current, or proposed activities might be
construed to be illegal, improper, questionable, or not
authorized by applicable law, Presidential directive,
Executive order, or regulation;
instructions received in any way appear to be
illegal, improper, or questionable; or
- claims of employees or any other person are based on
fraud.
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(b) the independent review functions of the Office of
Inspector General to evaluate the effectiveness of internal
accounting and administrative controls and to conduct
inspections, audits and investigations of activities and
programs. The Inspector General also is responsible for ensuring
management follow-up of findings and recommendations.
c. Policy
It is the policy of the Central In.elligence Agency to operate a
system of internal accounting and administrative controls designed to
ensure that;
- activities and transactions are appropriately
authorized;
- activities are carried out efficiently and
effectively;
- resources are protected against fraud, misuse
and misappropriation;
- transactions are accurately and reliably
recorded and reported; and
- recorded accountability for assets is compared
with the existing assets at reasonable intervals
and appropriate action is taken with respect to
any differences.
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Within this policy is the express intention to be in reasonable
compliance with standards prescribed by the Comptroller General for
accounting, auditing, and internal accounting and administrative
control systems.
d. Procedures
(1) At the close of each fiscal year and no later than 30
November, the Directors of ICS and NIESO, Deputy Directors, and Heads
of Independent Offices will prepare a gtatement assessing the
operation of internal accounting and administrative controls within
their respective organizations during the fiscal year just ending.
The statements for ICS and NIESO will be submitted directly to the
DDCI through the Inspector General. The other statements will be
submitted to the Executive Director through the Inspector General.
Assuming no material weaknesses, all of the above statements will
include the following:
"To the best of my knowledge, the activities taking place during
FY within (appropriate organizational name) have been appropriately
approved and carried out in accordance with law and Agency
regulations. Obligations are valid and are supported in accordance
with Agency regulations. Expenditures have been properly approved.
Due care has been exercised to protect resources from misuse and
misappropriation. Activities have been managed in an efficient and
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effective manner. Internal accounting and administrative controls are
operational and effective." Exceptions are to be incorporated in the
statement together with an explanation of proposed corrective action.
(2) The Director of Finance will,file a statement as described
above and will include the following:
"To the best of my knowledge, during FY revenues and
expenditures applicable to operations for which the Agency is respons-
ible were accounted for, certified and recorded so that reliable
financial and statistical reports could be prepared and accountability
of assets maintained." Exceptions are to be incorporated in the
statement together with an explanation of proposed corrective action.
(3) The Inspector General will review these statements and
indicate concurrence or non-concurrence with their substance
based upon overall perception of the effectiveness of the
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internal accounting and administrative control system as demonstrated by
inspection and audit activities conducted during the year. The basis for any
exception will be'explained. In his report to the DCI, the Inspector General
will provide relevant comments and recommendations regarding changes,
enforcement of controls, and compliance with Comptroller General standards.
The Inspector General will send the appropriate statements to the Executive
Director and DDCI for their review and recommendations to me. My report to the
President and the Congress will include NIESO and ICS and be issued no later
than December 31 as required by law.
William J. Casey
Director of Central Intelligence
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Proposed Internal Control Statement
(assuming no substantive weaknesses)
As required by the Federal Managers' Financial Integrity Act of 1982, this
is to inform you that for the year ended September 30, 19--, reviews of the
results of application of the systems of internal accounting and administrative
controls for the Agency, National Intelligence Emergency Suppport Office
(NIESO), and Intelligence Community Staff (ICS) satisfy me that those controls
provide reasonable assurance that
- obligations and costs comply with applicable law;
- assets are safeguarded against waste, loss, unauthorized use, and
misappropriation; and
- revenues and expenditures applicable to operations are recorded
and accounted for properly so that accounts and reliable financial
and statistical reports may be prepared and accountability of the
assets may be maintained.
This is also to inform you that Comptroller General principles, standards
and related requirements for accounting systems have been and continue to be
used as the guidelines against which the Agency accounting system has been
developed and is being maintained.
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