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HUD   >   Program Offices   >   Chief Financial Officer   >   Agency Financial Report FY 2012   >   Section I   >   Management Assurances

MANAGEMENT ASSURANCES

The Federal Managers' Financial Integrity Act of 1982 (FMFIA) and OMB Circular A-123, Management's Responsibility for Internal Control, require ongoing evaluations of the adequacy of the systems of internal accounting and administrative controls and the annual reporting of the results of the evaluations.  Section 2 of FMFIA requires reporting on the assessment of the effectiveness of the organization's internal controls to support effective and efficient programmatic operations, reliable financial reporting, and compliance with applicable laws and regulations and a summary of material weaknesses while Section 4 of FMFIA requires reporting on whether HUD's financial management systems conform to financial systems requirements.  HUD can provide a qualified statement of assurance that its internal control over operations (Section 2) and financial management systems (Section 4) meet the objectives of FMFIA, as of September 30, 2012 with the exception of one material weakness which is described further in Section 2 below. 

Section 2:  The Federal Managers’ Financial Integrity Act (FMFIA) of 1982

FMFIA explains management's responsibility for, and its role in, the assessment of accounting and administrative internal controls.  Guidance for implementing FMFIA is provided through OMB Circular A-123.  Internal controls are an integral component of HUD's management that provides reasonable assurance that objectives are being achieved.  Read more...

Section 4:  The Federal Managers' Financial Integrity Act (FMFIA) of 1982

Section 4 of FMFIA requires agencies to report on whether their accounting system conforms to the mandated federal financial management system requirements.  Agencies must report instances of material non-conformance, including the preparation of remediation plans that address the non-conformance.  During FY 2012, the Department assessed its financial management systems for conformance with financial management system requirements and determined that the Department conforms to such requirements.  Read more...

Federal Financial Management Improvement Act of 1996 (FFMIA)

The Federal Financial Management Improvement Act of 1996 and OMB Circular A-127, Financial Management Systems prescribes policies and standards for executive departments and agencies to follow when managing their financial management systems.  According to OMB Circular A-127, financial management systems are substantially compliant when an agency's financial management systems routinely provide reliable and timely financial information for managing day-to-day operations as well as to produce reliable financial statements, maintain effective internal control, and comply with legal and regulatory requirements.  During FY 2012, the Department assessed its financial management systems for compliance with the FFMIA and determined that, when taken as a whole, the Department is in compliance with FFMIA.  Read more...   

Federal Information Security Management Act of 2002 (FISMA)

The Federal Information Security Management Act of 2002 (FISMA) requires each agency to generate “…a comprehensive framework for ensuring the effectiveness of information security controls over information resources that support Federal operations and assets…”  It assigns specific responsibilities to Federal agencies, the National Institute of Standards and Technology (NIST), and the Office of Management and Budget (OMB) in order to strengthen information system security.  In particular, FISMA requires an agency's head to implement policies and procedures that cost-effectively reduce information technology security risks to an acceptable level and to annually report to OMB on the effectiveness of the agencies' security programs.  HUD relies extensively on Information Technology to carry out its operations.  Read more...

Other Management Information, Initiatives, and Issues

FY 2012 Financial Statement Audit Material Weakness

HUD OIG's FY 2012 financial statement audit report determined that a material weakness existed in HUD's ability to achieve substantial compliance with FFMIA.  The report specifically mentions two systems, the HUD Integrated Acquisition Management  System (HIAMS) and Integrated Disbursement and Information System (IDIS), as being non-compliant with FFMIA.  HUD does not agree with this determination.  Read more....

HUD's Financial Management Systems Framework

HUD's current financial systems environment is comprised of a combination of aging, legacy mixed programmatic systems and a core financial sytem (HUDCAPS) that performs all budgetary, accounting, and financial statement preparation for the Department.  Many of the legacy systems are COBOL-based mainframe systems and operate on multiple platforms.  HUD has developed a structure of compensating controls to ensure that the systems operate successfully, can maintain and deliver accurate, reliable, and timely financial information, and can meet federal financial management system requirements.  Read more...

 


 

FY 2012 SECRETARY'S ANNUAL ASSURANCE STATEMENT

The Department of Housing and Urban Development's management is responsible for establishing and maintaining effective internal control and financial management systems that meet the objectives of the Federal Managers' Financial Integrity Act of 1982 (FMFIA), Sections 2 and 4.  HUD conducted its annual assessment of the effectiveness of internal control to support effective and efficient programmatic operations and compliance with applicable laws and regulations.  Based on the results of this evaluation, HUD can provide a qualified statement of assurance that its internal controls over operations (Section 2) and financial management systems (Section 4) meet the objectives of FMFIA, as of September 30, 2012, with the exception of a material weakness.  While HUD believes that it has a sound system of internal controls, one area requires improvement.  In FY 2012, HUD recognized that a material weakness exists in HUD's strategic management of its Human Capital Management operations.  HUD has faced challenges in the effective and efficient operation of this support area and is vigorously addressing the issues identified during the assessment.  Read more...