Annual Internal Control Review Plan

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SECTION 1 CHAPTER2 ANNUAL INTERNAL CONTROL REVIEW PLAN The first step in the internal control process involves the preparation of an Internal Control Review Plan (ICRP). This plan helps institutionalize the internal control process within the bureau by involving all levels of management in its preparation and approval. The ICRP represents the bureau schedule for performing financial reporting and programmatic internal control assessments for the current fiscal year and/or later years (usually covering a five-year period, but some reviews are scheduled annually). This list includes not only the internal assessments described in this section, previously known as management control reviews, but also the list of financial statement-related internal controls that will be tested as well (as discussed in the next section). An ICRP must summarize a bureau’s components; identify the relative priority ranking of each component as high, medium, or low risk activity; establish the type of control evaluation to be conducted and the year in which the evaluation is to be completed; and assign the responsibility for conducting the planned evaluation. The annual review plan may have reviews of key controls in the financial areas that do not result in an AICR-like deliverable that is surnamed and provided to PFM. At a minimum, the plan should be updated annually. The update consists of adjusting the plan to accommodate Departmental Functional Reviews (DFRs); competitive sourcing; new components, programs, or reporting systems; changes in priority; the completion of control evaluations and corrective actions; and any additional information available on the status of controls. Annual updates should coordinate review activity to avoid redundancy by integrating, to the maximum extent possible, internal program, functional, and operational reviews, GPRA performance assessments, management

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