Financial Statement Reporting Entity (FSRE)
An entity assigned by either the Office of Management and Budget (OMB) or the DoD to produce and provide to OUSD(Comptroller) stand alone, financial statements, both quarterly and annual.
Internal Control Assessment (Overall)
An assessment of the internal control effectiveness for the functions under the Federal Manager’ Financial Integrity Act (FMFIA). The overall process includes all programs, activities, and operational areas [i.e., the Internal Control Reporting Categories defined in DoDI 5010.40].
Internal Control Assessment (ICA) Internal Control Over Financial Reporting (ICOFR)
An assessment of the effectiveness of internal controls over financial reporting which closely follows the guidance in Appendix A of OMB Circular A-123 and MIC Program Annual Guidance provided by OUSD(Comptroller).
Material Weakness (ICOFR)
A reportable condition (or combination of reportable conditions) that results in more than a remote likelihood that a material misstatement of the financial statements, or the other significant financial reports, will not be prevented or detected. The determination is a management’s judgment as to whether a weakness is material.
An informed judgment by management as to the overall adequacy and effectiveness of internal controls based upon available information that the systems of internal controls are operating as intended.
There are three possible assurance statements:
Reportable Condition (Overall)
A control deficiency (or combination of deficiencies) that in management’s judgment, should be communicated because they represent significant weaknesses in the design or operation of internal controls that could adversely affect the organization’s ability to meet its internal control objectives.
Reportable Condition (ICOFR)
A control deficiency (or combination of deficiencies) that adversely affects the entity’s ability to initiate, authorize, record, process or report external financial data reliably according to generally accepted principles such that there is more than a remote likelihood that a misstatement of the entity’s financial statements, or other significant financial reports, is more than inconsequential will not be prevented or detected.
The possibility an event will adversely effect the achievement of internal control objectives and result in the loss of Government resources or cause an agency to fail to accomplish significant mission objectives through fraud, error, or mismanagement.
A weakness that materially affects internal controls across organizational and program lines, and usually affects more than one DoD Component.
Note: A systemic weakness is determined by the PSA with functional responsibility for the area in question.