State Assessment of Internal Controls Final Report, May 2007

Download Guide in Word (1,622 KB) or PDF (676 3KB) format.

I. Conclusions

Each of the pilot States indicated several benefits resulting from the self-assessment process, including planned actions to improve internal controls in an effort reduce errors that can lead to improper payments. Examples of State benefits included:

• For Arkansas, because a previous agency audit identified several issues with computer security, the Instrument assisted in preparing responses for the next security audit. Arkansas also indicated that the Instrument helped identify additional weaknesses, such as the inadvertent release of confidential information through e-mail.
• Illinois relies heavily on contractors in administration of child care services and this Instrument helped the agency identify the importance of monitoring the internal controls of its contractors. Illinois indicated that they would make a streamlined Instrument available to contractors to document internal controls.
• Use of the Instrument in Kentucky helped verify that many practices and procedures were already in place; however, most needed better documentation. By identifying and reviewing the practices and procedures through use of the Instrument, Kentucky verified that processes existed and that the agency was using them appropriately.
• In Maine, the State Child Welfare program is now using the Instrument as part of an accreditation effort and the Human Relations is considering adding integrity and ethical value information to its Performance Evaluation System (PER).
• Montana indicated that the Instrument highlighted several areas of weaknesses that the agency needs to address, such as succession planning for staffing, the sharing of IT planning documents, developing future strategies, writing desk manuals to reduce confusion during periods of staff turnover, and disaster planning with agencies contracted with to administer portions of the child care program.
• Nevada indicated that while it was challenging to conduct the Instrument during change to a new automated system, the self-assessment process provided checks of all necessary internal controls as part of the implementation process.
• Puerto Rico used the Instrument as a tool to re-examine issues raised in previous fiscal audits.
• In Washington, Human Resources staff members are updating policies dealing with employee development and training, employee discipline, and other policies. Because of changes in the organization and the development of a new computer system within the Children’s Bureau, the Operations manual and Practice Models need updating.

In summary, the pilot States achieved several benefits from the Instrument. The next chapter provides an estimate of the costs incurred by the States to implement the self-assessment process.

Posted January 31, 2008