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Management Assurances

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Photo showing Divisions of Clearing and Risk and Market Oversight staff in a meeting. Photo by Clark Day Photography.


Management Overview

Diagram showing the internal control process.  From top to bottom this includes monitoring, control activities, risk assessment, and control environment. Information and communication flows through each of these areas.The CFTC is committed to management excellence and recognizes the importance of strong financial systems and internal controls to ensure accountability, integrity, and reliability. This operating philosophy has permitted the Commission to make significant progress in documenting and testing its internal controls over financial reporting for next year, as prescribed in OMB Circular A-123, Management's Responsibility for Internal Control. The graph to the right depicts all five components of the internal control process that must be present in an organization to ensure an effective internal control process.

Control Environment is the commitment to encourage the highest level of integrity and personal and professional standards, and promotes internal control through leadership philosophy and operation style.

Risk Assessment is the identification and analysis of risks associated with business processes, financial reporting, technology systems, and controls and legal compliance in the pursuit of agency goals and objectives.

Control Activities are the actions supported by management policies and procedures to address risk, e.g., performance reviews, status of funds reporting, and asset management reviews.

Monitoring is the assessment of internal control performance to ensure the internal control processes are properly executed and effective.

Information and Communication ensure the agency's control environment, risks, control activities, and performance results are communicated throughout the agency.

The Commission relies on its performance management and internal control framework to:

Statement of Assurances

The Statement of Assurance is required by the Federal Managers' Financial Integrity Act (FMFIA) and OMB Circular A-123, Management's Responsibility for Internal Control. The assurance is for internal controls over operational effectiveness (we do the right things to accomplish our mission) and operational efficiency (we do things right).

Statement of Assurance

"CFTC 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 (FMFIA). The CFTC conducted its assessment of the internal control over effectiveness and efficiency of operations, and compliance with applicable laws and regulations, in accordance with OMB Circular A-123, Management's Responsibility for Internal Control. Based on the results of this evaluation, the CFTC can provide reasonable assurance that its internal control over operations, and compliance with applicable laws and regulations, as of September 30, 2011 was operating effectively and no material weaknesses were found in the design or operation of the internal controls.

The CFTC also conducts reviews of its financial management systems in accordance with OMB Circular A-127, Financial Management Systems. Based on the results of these reviews, the CFTC can provide reasonable assurance that its financial management systems are in compliance with applicable provisions of FMFIA as of September 30, 2011.

In addition, the CFTC conducted its assessment of the effectiveness of internal control over financial reporting, which includes safeguarding of assets and compliance with applicable laws and regulations governing the use of budget authority and other laws and regulations that could have a material effect on the financial statements, in accordance with the requirements of Appendix A of OMB Circular A-123. Based on the results of this evaluation, the CFTC can provide reasonable assurance that its internal control over financial reporting as of June 30, 2011 was operating effectively and no material weaknesses were found in the design or operation of the internal control over financial reporting".

Signature of Gary Gensler.

Gary Gensler
Chairman
November 14, 2011


During FY 2011, in accordance with FMFIA, and using the guidelines of OMB, the Commission reviewed key components of its management and internal control system.

The objectives of the Commission's internal controls are to provide reasonable assurance that:

The efficiency of the Commission's operations is evaluated using information obtained from reviews conducted by Government Accountability Office (GAO) and the Office of Inspector General (OIG), specifically, requested studies, or observations of daily operations.

These reviews ensure that the Commission's systems and controls comply with the standards established by FMFIA. Moreover, managers throughout the Commission are responsible for ensuring that effective controls are implemented in their areas of responsibility. Individual assurance statements from division and office heads serve as a primary basis for the Chairman's assurance that management controls are adequate. The assurance statements are based upon each office's evaluation of progress made in correcting any previously reported problems, as well as new problems identified by the OIG, GAO, other management reports, and the management environment within each office. The items presented below are illustrative of the work performed during FY 2011:

FMFIA Section 2, Management Control

The Commission has no declared material weakness under FMFIA for FY 2011 and FY 2010 in the area of financial reporting that hinders preparation of timely and accurate financial statements.

FMFIA Section 4, Financial Management Systems

The Commission declared no systems nonconformance under FMFIA during FY 2011 and FY 2010. The independent auditors' reports for FY 2011 and FY 2010 disclosed no instances of noncompliance or other matters that were required to be reported under Generally Accepted Government Auditing Standards (GAGAS) and OMB Bulletin 07-04, Audit Standards for Federal Financial Statements.

 

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