Financial Systems and Controls. Objectivesensure that financial systems are developed and implemented with due regard to generally accepted financial control standards, and are consistent with government business and systems strategic directionstrive towards integrated financial management to support government decision- making, accountability and transparency as described in the Financial Management Information Systems Vision (government access only)provide guidance to ministries on financial systems, supporting internal controls and financial risk assessments. General. Financial systems generate a significant amount of data and information, and are a vital component in managing the delivery of government services and in producing the Province of B. Purpose The purpose of this manual is to describe the financial accounting policies and procedures of the Lake Michigan Air Directors Consortium (LADCO). The manual also details the internal controls and.
Manual for financial management and control will be published on the website of the. CONTROLS OF ANNUAL FINANCIAL REPORT. Manual for financial management and document control is not given once and. Audit of Financial Reporting Controls – Final Report 4 required by Treasury Board. Where necessary, management has followed Treasury Board guidelines to provide best estimates. 4.2.3 In one case tested, we examined an. C. Public Accounts. Roles and Responsibilities. Treasury Board has overall responsibility for government financial management and control in the province (CPPM 2. On behalf of Treasury Board, the Office of the Comptroller General and Treasury Board Staff, Ministry of Finance prepare and release summary financial information, as well as, detailed information on ministries and agencies that make up the Consolidated Revenue Fund and the Government Reporting Entity. Ministries are responsible for their financial systems and ensuring compliance with government policy and technology standards. The ministry Executive Financial Officer (EFO) or Chief Financial Officer (CFO) where delegated, has overall responsibility for implementation and operation of a financial system (CPPM 2. The Comptroller General is responsible for policy and direction for financial systems, and communication of standards and guidelines (CPPM 2. The Government Chief Information Officer is responsible for corporate information management and information technology policies and standards including architectures and information security (CPPM 1. Financial information is relied on to make decisions of a financial nature. Financial System – for the purposes of this chapter, means a significant system or process (e. For example, systems that: collect, maintain, process, transmit or report financial transactions; support internal and external financial report preparation, such as, cost and revenue information, financial statements, and the Public Accounts; assist ministries and central agencies with financial management, control, budgeting and forecasting. Financial Risk and Controls Review (FRCR) – assesses and documents the adequacy of the designed controls for a new financial system (or a significant modification to an existing financial system or a system having a key financial component) with generally accepted financial control standards to prevent and reduce the risk of loss, error, misuse or fraud and to ensure conformity with accounting assertion criteria. The methodology must be consistent with government architectures and information management and information technology (IM/IT) policies and standards (Refer to CPPM 1. A financial system requires ministry approval prior to placement into production. Financial system documentation needs to support compliance and financial risk and controls assessment. Ministries must make use of, to the extent practicable, the suite of corporate financial systems or a component thereof, to process financial information so that core functionality is maximized and not duplicated. In addition, prior to developing any new financial system (or making significant modification to an existing financial system or a system having a key financial component) and/or submitting a funding request for same, ministries must collaborate with OCG1 . The primary point of contact is between the ministry CFO and the Executive Director, Financial Management Branch, OCG. Ministries must ensure that their financial information processes and financial systems have sufficient and comprehensive controls to prevent and reduce the risk of loss, error, misuse or fraud to an acceptable level. To this end, ministries must complete a pre- implementation FRCR for a new financial system (or a significant modification to an existing financial system or a system having a key financial component). The pre- implementation FRCR must be initiated during system development and completed prior to implementation to production. Ministry resourcing for the FRCR should be identified in the development budget. For FRCR guidance, refer to 1. Qualified, independent and objective parties (internal or external to the ministry) are required to complete the FRCR, at the discretion of the ministry EFO or CFO, where delegated. For example, use of experienced ministry audit or in- house systems staff, such as, a professional accountant (CA, CMA, CGA) with IM/IT audit skills, or a Certified Internal Auditor (CIA) with IM/IT audit skills, or a Certified Information Systems Auditor (CISA) with financial audit skills for the review would be appropriate, as long as the reviewer was not the system developer, operator, or central to the program area that will use the financial system. In a self- assessment situation, the FRCR should be endorsed by an external service provider or qualified independent ministry staff with the requisite financial and IM/IT audit skills. The ministry EFO, or CFO where delegated is responsible for approval of the pre- implementation FRCR report. The primary point of contact is between the ministry CFO and the Executive Director, Financial Management Branch, OCG. For FRCR report guidance, refer to 1. A post- implementation FRCR must be conducted by the ministry before the third year of operations to confirm that the financial system continues to support business requirements, any weaknesses have been addressed, and key financial controls continue to prevent and reduce the risk of loss, error, misuse or fraud. Ministry assessment activities and workload for the post- implementation FRCR should be rationalized with those required of any other periodic assessment or assurance engagement (e. The approved report must be provided to and accepted by the Comptroller General before the third operating year of the financial system has commenced. The primary point of contact is between the ministry CFO and the Executive Director, Financial Management Branch, OCG. Ministries must ensure that payment transaction systems and processes are developed in compliance with Banking & Cash Management Branch, Provincial Treasury’s policies and standards. In addition, any new outsourced payment system must be certified as PCI compliant by the EFO prior to deployment. Information and References. Financial Risk & Controls Review. Guidance on internal controls, FRCR completion, reporting and approval, and additional control examples are outlined below. Risk- based Internal Control Effective internal controls support achievement of an organization’s objectives. As an example of the complexity, refer to the Overview of Corporate and Ministry Financial Systems in 1. For a financial system, internal controls need to address key risks in the context of the overall business and environment in which it operates. The objective is to ensure an effective internal control regime for financial information and that it is consistent with the standards established for accounting assertions*. For example, assurances that financial transactions are properly authorized, financial records are properly maintained, assets are safeguarded, and that applicable legislation and policies are complied with. To the extent possible, key controls over financial information and account balances should be automated. It is recognized that automation is not always possible and manual procedures, such as reconciliations and management reviews, may be necessary. It is expected that key automated and compensating controls will form an integral part of user acceptance testing, and their design will be confirmed as part of the FRCR.* Standards for accounting assertions are as follows: Financial information transferred from a ministry financial system to the CAS Financials system, whether detailed or summarized, must meet transaction criteria for. Occurrence: recorded transactions actually occurred Completeness: all transactions that should be recorded are. Valuation/Accuracy: correct transaction values are recorded. Classification: transactions are recorded in the proper account. Authorization: recorded transactions are valid. Cut- off: transactions are recorded in the correct accounting period. For subsidiary ledgers maintained by ministries, the subsidiary financial system balances must meet criteria pertaining to account balances for. Existence: asset and liability balances exist. Completeness: all valid asset and liability balances are recorded and can be reconciled to the CAS Financials system. Valuation: asset and liability balances are included at correct amount. Assessment The FRCR is a formal analysis of a financial system and the environment in which it operates using a risk- based approach. Key risk areas are identified and assessed along with the associated controls established by the internal control regime to mitigate risks. The assessment is supported by a scoping and risk rating exercise to determine whether the financial system includes adequate internal controls. In relation to a financial system the following internal control areas need to be considered. Business process controls - - include application controls. The scope of a FRCR needs to address material classes of financial transactions, account balances and summary financial information. Use quantitative and qualitative factors to determine whether or not the application supports material items. For example, review the dollar value of material transactions and the complexity of the accounting policies, or susceptibility of the process to error and fraud to determine the significance of the application/system and control objectives.
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