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SMG 2350.1

FDA STAFF MANUAL GUIDES, VOLUME III - GENERAL ADMINISTRATION

FINANCIAL MANAGEMENT

FINANCIAL INTEGRITY

GUIDANCE FOR THE IMPLEMENTATION OF THE FEDERAL MANAGERS'
FINANCIAL INTEGRITY ACT (FMFIA)

Effective Date: 06/16/2009

[PDF Version]

  1. Purpose
  2. Policy
  3. Responsibilities
  4. Authorities and References
  5. Effective Date
  6. History

1. PURPOSE. 

This Guide sets forth agency policy, responsibilities and guidelines for complying with Section 2 and Section 4 of the Federal Managers' Financial Integrity Act (FMFIA) of 1982 and Office of Management and Budget (OMB) Circular A-123, dated December 21, 2004.

2. POLICY. 

Through the agency’s FMFIA Program, FDA seeks to establish, maintain, and report on internal controls for the purpose of:

  • Reducing the risk of fraud, waste, mismanagement of assets and resources, and misappropriation of funds
  • Assuring compliance with applicable laws and regulations
  • Promoting effective and efficient operations

FDA managers should incorporate the requirements, standards, and timelines contained within the Authorities and References section of this document for compliance with the Federal Managers' Financial Integrity Act (FMFIA) of 1982.

3. RESPONSIBILITIES. 

The Office of Financial Management (OFM) is responsible for leading the agency’s overall internal controls program, including the day-to-day activities of the FDA FMFIA program and of the FDA A-123 Senior Assessment Team (SAT).

Note: The SAT is responsible for overseeing internal controls over financial reporting and for coordinating with the DHHS Senior Assessment Team in order to comply with FMFIA, OMB Circular A-123, and DHHS Internal Control requirements specifically pertaining to financial reporting.

Questions related to the agency’s Internal Controls program should be directed to OFM’s Director of the Division of Controls, Compliance, and Oversight.

1. Agency Program Management.

a. The Commissioner is responsible for signing the Annual Statement of Assurance, which certifies that FDA is meeting its requirements under FMFIA. This statement and accompanying FMFIA report must also include a summary of identified material weaknesses and non-conformances, and a plan for corrective action.

Deficiencies identified in the Center/Office Individual Assurance Statements that the Commissioner or other senior-level managers determine significant enough to be reported outside the agency (i.e., included in the agency's Annual Statement of Assurance) is considered to be a "material weakness" or, if the deficiency is directly related to the agency's financial systems, it is considered to be a "material non-conformance."

The designation of "material weakness" requires a judgment by the Commissioner and/or other senior-level managers that the relative risk and significance of the deficiency merits the attention of the Secretary, DHHS.

Likewise, the designation of "material non-conformance" also requires a judgment by the Commissioner and/or other senior-level managers that the relative risk and significance of financial systems deficiencies merit the attention of the Secretary, DHHS.

Additionally, the GAO and OIG can make material weakness and/or material non-conformance recommendations based on results of audits they conduct of agency programs and activities.

All nonmaterial weaknesses (i.e., less significant deficiencies) are to be reported internally only and should be corrected and monitored at the Center/Office program level.

b. The FDA FMFIA Coordinator is responsible for overall FMFIA program management and administration. Specific duties of the FDA FMFIA Coordinator include:

(1) Managing, coordinating, and developing the agency’s annual FMFIA reports;

(2) Developing and issuing FMFIA-related guidance to agency components, and working directly with all Centers and OC offices to promote improved FMFIA processes and operations;

(3) Working with Centers and OC offices in the development and monitoring of corrective action plans for the tracking of material weaknesses;

(4) Serving as a standing member of the Senior Assessment Team;

(5) Collaborating and sharing FMFIA program information with the SAT;

(6) Maintaining and updating the agency’s FMFIA web page;

(7) Providing training/orientation as needed to new Center/OC FMFIA liaisons and to agency program managers;

(8) Reviewing and providing comment on guidance issued by DHHS, OMB, etc.

2. Financial Systems Management.

Director, Office of Financial Management (OFM). Responsible for submitting (through the FDA FMFIA Coordinator) an annual statement under Section 4 of FMFIA on whether FDA's financial systems conform with Executive Branch requirements as stated in Section 7 of the OMB Circular A-127, "Financial Management Systems." If the FDA systems do not conform, the statement must discuss plans for bringing the systems into compliance.

3. Component Organization Program Management.

a. Center Directors, Associate Commissioner for Regulatory Affairs, and Designated OC Office Directors. Responsible for:

(1) planning, managing and coordinating internal control activities for their respective organizations;

(2) submitting to the FDA FMFIA Coordinator, an Annual Statement of Assurance (FDA FMFIA Coordinator will provide the specific due dates, prescribed content, format, etc.) to provide reasonable assurance that resources are protected from waste, fraud, and mismanagement; that programs have been evaluated periodically to assure compliance with applicable laws and regulations; and that Center/OC Office activities are being managed in an effective and efficient manner;

(3) reporting any potential material weakness or material non-conformance to the FDA FMFIA Coordinator as soon as identified. A material weakness or material non-conformance is defined as a weakness that would significantly impair the fulfillment of the FDA's mission; deprive the public of needed services; violate statutory or regulatory requirements; significantly weaken safeguards against waste, loss, unauthorized use or misappropriation of funds, property or other assets; or result in a conflict of interest. If the weakness or non-conformance is determined to be material, the component organization will be responsible for submitting a corrective action plan to the FDA FMFIA Coordinator for approval, and for preparing status reports for inclusion in the Annual Statement of Assurance.

b. FDA Managers (at all levels). Responsible for:

(1) quality and timeliness of program performance;

(2) effectiveness and efficiency of program and administrative activities;

(3) controlling costs and mitigating adverse aspects of agency operations;

(4) assuring that programs are managed with integrity and in compliance with applicable laws and regulations;

(5) establishing and maintaining adequate controls over resources entrusted to them;

(6) continually monitoring and improving the effectiveness of internal controls associated with their programs and operations.

c. FMFIA Liaisons/Internal Control Staffs. Responsible for:

(1) internal direction and guidance to their respective Center/OC Office component on FMFIA policies and procedures;

(2) coordinating the Individual Assurance Statement process within their respective component;

(3) directing or conducting FMFIA activities within their components;

(4) submitting information regarding FMFIA activities to the FDA FMFIA Coordinator, as requested;

(5) monitoring and tracking corrective actions to ensure that deficiencies are corrected;

(6) maintaining liaison with the FDA FMFIA Coordinator on all matters relating to FMFIA.

4. AUTHORITIES AND REFERENCES. 

A. Attachment A:

Federal Managers' Financial Integrity Act of 1982 (P.L. 97-255) as codified in 31 U.S.C. 3512 identifies the internal accounting and administrative requirements for each Federal agency as directed by the Comptroller General.

http://www.whitehouse.gov/omb/financial/fmfia1982.html

B. Attachment B:

OMB revised Circular A-123, dated December 21, 2004 identifies requirements to improve accountability and effectiveness of the Federal Government's programs and operations by establishing, assessing, correcting and reporting on internal controls.

http://www.whitehouse.gov/omb/circulars/a123/a123_rev.html

C. Attachment C:

OMB A-123 Circular Appendix B provides requirements for agencies to reduce the risk of fraud, waste, and error in government charge card programs.

http://www.whitehouse.gov/omb/circulars/a123/a123_appendix_b.pdf

D. Attachment D:

OMB A-123 Circular Appendix C provides clarification and requirements to agencies for effective measurement and remediation of improper payments.

http://www.whitehouse.gov/sites/default/files/omb/assets/a123/a123_appx-c.pdf

E. Attachment E:

Department of Health and Human Services A-123 Assessment Guidance outlines the guidance and activities required by FDA in order to comply with A-123.

http://intranet.hhs.gov/financial/A123Programs/guidance.html

F. Attachment F:

General Accounting Office (GAO) Standards for Internal Control in the Federal Government outlines the FMFIA requirements for the GAO to issue standards for internal control in government. The standards provide the overall framework for establishing and maintaining internal control. It also establishes a framework for identifying and addressing major performance and management challenges and the areas at greatest risk of fraud, waste, abuse, or mismanagement.

http://www.gao.gov/archive/2000/ai00021p.pdf

G. Attachment G:

General Accounting Office (GAO) Internal Control Management and Evaluation Tool is intended to help management and evaluators determine how well an agency’s internal control is designed. It may be helpful in the assessment of risk, as well as to determine what, where, and how internal control improvements, may be implemented.

http://www.gao.gov/new.items/d011008g.pdf

5. EFFECTIVE DATE. 

This policy is effective as of June 16, 2009

6. Document History -- SMG 2350.1, Guidance for the Implementation of the Federal Managers' Financial Integrity Act (FMFIA) 

STATUS (I, R, C) DATE APPROVED LOCATION OF CHANGE HISTORY CONTACT APPROVING OFFICIAL
Initial 06/16/2009 N/a OC/OO/OM/OFM William C. Collison, Acting Director, OFM