[Federal Register Volume 64, Number 224 (Monday, November 22, 1999)]
[Notices]
[Page 63815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30354]


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GENERAL ACCOUNTING OFFICE

[GAO/AIMD-00-21.3.1]


Standards for Internal Control in the Federal Government

AGENCY: General Accounting Office.

ACTION: Notice of document availability.

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SUMMARY: The General Accounting Office (GAO) has issued a revised 
``Standards for Internal Control in the Federal Government,'' dated 
November 1999. This publication updates and replaces the 1983 
``Standards for Internal Controls in the Federal Government,'' commonly 
referred to as the ``Green Book.'' The new standards incorporate the 
concepts of the existing standards and provide greater recognition to 
the impact of information technology, human capital management, and 
private sector guidance on internal control. The new standards are 
intended to assist federal agency program and financial managers 
achieve the internal control objectives of their organizations. The 
standards are effective for fiscal year 2000 and apply to reports 
required by the Federal Managers' Financial Integrity Act (FMFIA) for 
that year.

DATES: November 1999.

ADDRESSES: Copies of the internal control standards are available by 
(1) pick-up at Document Distribution, U.S. General Accounting Office, 
Room 1100, 700 4th Street, NW. (corner of 4th and G Streets, NW.), 
Washington, DC; (2) Mail from U.S. General Accounting Office, P.O. Box 
37050, Washington, DC 20013; (3) Phone at 202-512-6000 or FAX at 202-
512-6061 or TDD at 202-512-2537; or (4) On GAO's homepage on the 
Internet at (http://www.gao.gov) under the link to ``Special 
Publications.''

FOR FURTHER INFORMATION CONTACT: Mr. Robert W. Gramling, Director, 
Corporate Audits and Standards, Accounting and Information Management 
Division, U.S. General Accounting Office, Room 5089, 441 G Street, NW., 
Washington, DC 20548, or by telephone at 202-512-9406.

SUPPLEMENTARY INFORMATION: Beginning with the Accounting and Auditing 
Act of 1950, agency heads have been required to establish and maintain 
effective internal control. Over the years, GAO had issued numerous 
publications to assist agencies in establishing and maintaining 
effective internal control. In 1982, the Federal Managers' Financial 
Integrity Act required agencies to evaluate their systems of internal 
control on a periodic basis using guidance issued by the Office of 
Management and Budget (OMB Circular A-123, ``Management Accountability 
and Control,'' revised June 21, 1995) and to report on whether their 
systems conform to the internal control standards. The Act also amended 
the Accounting and Auditing Act of 1950 requiring GAO to promulgate 
internal control standards. In 1983, GAO drew on its previously issued 
guidance and experts throughout government, the private sector, and the 
academic communities to develop and issue the required ``Standards for 
Internal Controls in the Federal Government.''
    Although, those standards remain conceptually sound and are used 
throughout the federal government, several factors indicated a need to 
revise and update the standards. The revision and update was performed 
primarily in response to (1) the effect of rapid advances in 
information technology management upon internal control, (2) a greater 
recognition of the role of human capital management as an important 
factor in internal control, and (3) the need to implement updates of 
the standards used in the private sector where useful in the federal 
government environment. The new standards also reflect the increased 
emphasis upon internal control inherent in important legislation such 
as the Chief Financial Officers Act of 1990, the Government Performance 
and Results Act of 1993, and the Federal Financial Management 
Improvement Act of 1996. These standards provide the overall framework 
for federal agencies to establish and maintain internal control and to 
identify and address major performance and management challenges and 
areas at greatest risk for fraud, waste, abuse, and mismanagement. They 
will be useful to both program and financial managers in all federal 
departments and agencies in meeting their missions and objectives and 
in achieving financial accountability.
    The format of the new standards and the concepts expressed by them 
are consistent with those contained in the document ``Internal Control-
Integrated Framework'' published in 1992 by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO). The COSO document is 
widely accepted for use in the private sector. The GAO document defines 
internal control as an integral component of an organization's 
management that provides reasonable assurance that the following 
objectives are being achieved: (a) Effectiveness and efficiency of 
operations, (b) reliability of financial reporting, and (c) compliance 
with applicable laws and regulations. There are five broad standards 
that define the minimum level of quality acceptable for internal 
control in government and provide a basis against which agency internal 
control can be evaluated. These five standards cover the areas of (1) 
Control Environment, (2) Risk Assessment, (3) Control Activities, (4) 
Information and Communications, and (5) Monitoring.
    We encourage wide distribution and application of the new standards 
for internal control throughout the federal government.
Jeffrey C. Steinhoff,
Acting Assistant Comptroller General for Accounting and Information 
Management.
[FR Doc. 99-30354 Filed 11-19-99; 8:45 am]
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