LETTER TO WILLIAM J. CASEY FROM JACK BROOKS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000400540013-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 17
• Document Creation Date: December 21, 2016
• Document Release Date: October 23, 2008
• Sequence Number: 13
• Publication Date: August 7, 1984
• Content Type: LETTER

MAJORITY MEMBERS
IACK BROOKS. TEX. CHAIRMAN
)ON FUOUA. FLA.
IOHN CONYERS. JR.. MICH.
CARDISS COLLINS. ILL.
GLENN ENGLISH. OKLA
51.11017 H LEVITAS. GA.
HENRY A WAKMAN, CALIF.
IED WEISS. N Y.
MIKE SYNAR. OKLA
STEPHEN L NE AL N.C.
DOUG BARNARD. JR.. GA
BARNEY FRANK. MASS.
IOM LANTOS. CALIF.
RONALD D COLEMAN. TEX.
ROBERT E WISE. JR., W. VA.
BARBARA BOXER. CALIF.
SANDER M. LEVIN. MICH.
BUDDY M.CKAY. FLA.
MEL LEVINE. CALIF.
MAJOR R. OWENS. N.Y.
EDOLPHUS TOWNS. N.Y.
JOHN M. SPRATT. JR- S.C.
JOE KOLTER. PA.
BEN EADREICH. AL.A.
GERALD 0. XLECZXA WIS.
Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7 / ,0
Confirezs of the 'United states
1iouze of '1Reprezcntatiues
COMMITTEE ON GOVERNMENT OPERATIONS
2157 RAYBURN HOUSE OFFICE BUILDING
WASHINGTON, D.C. 20515
Honorable William J. Casey
Director
Central Intelligence Agency
Washington, D.C. 20505
MINORIIY LII MREHS
FRANK IIDRION, N Y
JOHN N ERLENBORN. ILL.
THOMAS N KINDNESS. OHIO
ROBERT S WALKER. PA.
LYLE WILLIAMS. 01410
WILLIAM F CLINGER. JR. PA
RAYMOND J tA!GRAI H. N Y.
JUUU !;41GG NH
DAN BURTON, INO
JOHN R MCP. CRNAN. JR.. MAINE
7L) k4 LEWIS. F1 A
Al FRI II A (AI I MCCANDI [SS. CAL IF
LARAI' E CRAIG IDAHO
DAN SCHAEFER; COLO
MAJORITY-225-5051
MINORITY-225-5074
Executive Regibtry
84
?
IEGISEMIVE llA SUH
Enclosed is a copy of the report approved by the Committee on Government operations
entitled "First-Year Implementation of the Federal Managers' Financial Integrity Act."
The report is a result of the Legislation and National Security Subcommittee's
review and may 22, 1984 hearing concerning the Federal government's efforts to implement
the Act. It provides the Committee's views regarding Federal agencies' progress made
and problems encountered during the first year. Also discussed are potential obstacles
to the Act's full implementation.
The report contains recommendations requiring action by your agency to help assure
that the Act is fully implemented so that the maximum possible improvement in the
management of Federal programs and operations can be achieved. Agency heads are required
to take actions to assure that all programs and functions are covered, assure that all
material weaknesses are properly recorded and reported, complete the evaluation process,
and correct internal control and accounting system weaknesses.
I would appreciate your advising the Committee within 30 days as to the actions
you have taken or plan to take in response to the report's recommendations. Arldi.tional
copies of the report are available if you desire to distribute the Committee's views to
managers throughout your agency.
With best wishes, I am,
/ Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
 Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
? ?
Union Calendar No. 536
98th Congress, 2d Session - - - - - - - - - - - House Report 98-9:37
FIRST-YEAR IMPLEMENTATION OF THE FEDERAL
MANAGERS' FINANCIAL INTEGRITY ACT
FORTY-THIRD REPORT
COMMITTEE ON GOVERNMENT
OPERATIONS
AuGusr 2, 1984.-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
(1,8. GOVERNMENT FRINTINO oyFICP
WASHINGTON : 1984
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 Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
CONTENTS
P"e
1. Summary ................................................................................................................. 1
II. Introduction ............................................................................................................ 2
111. The Federal Managers' Financial Integrity Act ............................................. 3
A. Background ............................................................................................... 3
B. Requirements ............................................................................................ 3
C. What are internal controls? ................................................................... 4
IV. First year progress ................................................................................................ 6
1. Agency activities ...................................................................................... 6
B. OMB, GAO, and IG activities ................................................................ 8
V. Areas needing improvement ............................................................................... 9
A. Practical guidance for managers ......................................................... 9
B. Reporting problems ................................................................................. 10
C. Scope of implementation ........................................................................ 12
D. Documentation ......................................................................................... 14
E. Training ..................................................................................................... 14
F. Automated data processing controls .................................................... 15
G. Accounting systems evaluations ........................................................... 16
VI. Potential obstacles to full implementation ....................................................... 16
A. Incorrect Perceptions .............................................................................. 17
B. Inspectors general role ........................................................................... 17
C. Management commitment ..................................................................... 18
D. Coordination with other management reforms ................................. 19
VII. Conclusions ............................................................................................................. 19
VIII. Findings ................................................................................................................... 20
IX. Recommendations .................................................................................................. 21
APPENDIX
Public Law 97-255, Federal Managers' Financial Integrity Act of 1982 ............... 23
(V)
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 Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
Union Calendar No. 536
98TH CONGRESS REPORT
HOUSE OF REPRESENTATIVES
2d Session 98-937
FIRST-YEAR IMPLEMENTATION OF THE FEDERAL
MANAGERS' FINANCIAL INTEGRITY ACT
AUGUST 2, 1984.-Committed to the Committee of the Whole House on the State of
the Union and ordered to be printed
Mr. BROOKS, from the Committee on Government Operations,
submitted the following
FORTY-THIRD R E P 0 R T
BASED ON A STUDY BY THE LEGISLATION AND NATIONAL SECURITY
SUBCOMMITTEE
On July 31, 1984, the Committee on Government Operations ap-
proved and adopted a report entiled "First-Year Implementation of
the Federal Managers' Financial Integrity Act." The chairman was
directed to transmit a copy to the Speaker of the House.
1. SUMMARY
The Federal Managers' Financial' Integrity Act (the Act) became
law in September 1982, following continuing disclosures of fraud,
waste, and abuse associated with weak internal control and ac-
counting systems. Such abuses have hampered the Federal Govern-
ment's effectiveness and accountability, and eroded the public's
confidence. The Act requires Federal managers, for the first time,
to establish a continuous process for evaluating, improving, and re-
porting on the internal control and accounting systems for which
they are responsible. It thus reaffirms the requirements of the Ac-
counting and Auditing Act of 1950, which place the primary re-
sponsibility for establishing and maintaining effective internal con-
trol and accounting systems on the Federal Government's manag-
ers. The term "internal controls," as envisioned by the Act, is syn-
onomus with "management controls" and clearly encompasses pro-
gram and administrative areas, as well as the more traditional ac-
counting and financial management areas.
In compliance with the Act's requirements, the General Account-
ing Office promulgated standards for agencies to use in establish-
36-9980
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 Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
APPENDIX
An Act To amend the Accounting and Auditing Act of 1950 to require ongoing eval-
uations and reports on the adequacy of the systems of internal accounting and
administrative control of each executive agency, and for other purposes
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. This Act may be cited as the "Federal Managers' Fi-
nancial Integrity Act of 1982".
SEC. 2. Section 113 of the Accounting and Auditing Act of 1950
(31 U.S.C. 66a) is amended by adding at the end thereof the follow-
ing new subsection:
"(d)(1)(A) To ensure compliance with the requirements of subsec-
tion (a)(3) of this section, internal accounting -and administrative
controls of each executive agency shall be established in accord-
ance with standards prescribed by the Comptroller General, and
shall provide reasonable assurances that-
"(i) obligations and costs are in compliance with applicable
law;
"(ii) funds, property, and other assets are safeguarded
against waste, loss, unauthorized use, or misappropriation; and
"(iii) revenues and expenditures applicable to agency oper-
ations are properly recorded and accounted for to permit the
preparation of accounts and reliable financial and statistical
reports and to maintain accountability over the assets.
"(B) The standards prescribed by the Comptroller General under
this paragraph shall include standards to ensure the prompt reso-
lution of all audit findings.
"(2) By December 31, 1982, the Director of the Office of Manage-
ment and Budget, in consultation with the Comptroller General,
shall establish guidelines for the evaluation by agencies of their
systems of internal accounting and administrative control to deter-
mine such systems' compliance with the requirements of paragraph
(1) of this subsection. The Director, in consultation with Comptrol-
ler General, may modify such guidelines from time to time as
deemed necessary.
"(3) By December 31, 1983, and by December 31 of each succeed-
ing year, the head of each executive agency shall, on the basis of
an evaluation conducted in accordance with guidelines prescribed
under Paragraph (2) of this subsection, prepare a statement-
'(A) that the agency's systems of internal accounting and ad-
ministrative control fully comply with the requirements of
paragraph (1); or
"(B) that such systems do not fully comply with such require-
ments.
(23)
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 Approved For Release 2008/10/23: CIA-RDP86B00338R000400540013-7
"(4) In the event that the head of an agency prepares a state-
ment described in paragraph (3)(B), the head of such agency shall
include with such statement a report in which any material weak-
nesses in the agency's systems of internal accounting and adminis-
trative control are identified and the plans and schedule for cor-
recting any such weakness are described.
"(5) The statements and reports required by this subsection shall
be signed by the head of each executive agency and transmitted to
the President and the Congress. Such statements and reports shall
also be made available to the public, except that, in the case of any
such statement or report containing information which is-
"(A) specifically prohibited from disclosure by any provision
of law; or
"(B) specifically required by Executive order to be kept
secret in the interest of national defense or the conduct of for-
eign affairs.
such information shall be deleted prior to the report or statement
being made available to the public.".
SEC. 3. Section 201 of the Budget and Accounting Act, 1921 (31
U.S.C. 11), is amended by adding at the end thereof the following
new subsection:
"(k)(1) The President shall include in the supporting detail ac-
companying each Budget submitted on or after January 1, 1983, a
separate statement, with respect to each department and establish-
ment, of the amounts of appropriations requested by the President
for the Office of Inspector General, if any, of each such establish-
ment or department.
"(2) At the request of a committee of the Congress, additional in-
formation concerning the amount of appropriations orginally re-
quested by any office of Inspector General, shall be submitted to
such committee.".
SEC. 4. Section 113(b) of the Accounting and Auditing Act of 1950
(31 U.S.C. 66a(b)), is amended by adding at the end thereof the fol-
lowing new sentence: "Each annual statement prepared pursuant
to subsection (d) of this section shall include a separate report on
whether the agency's accounting system conforms to the principles,
standards, and related requirements prescribed by the Comptroller
General under section 112 of this Act.".
Approved September 8, 1982.
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