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 below 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 ensures 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:
The Commission strongly believes that the rapid implementation of audit recommendations is essential to improving its operations. Integration of Commission strategic, budget, and performance data permits management to make individual assurance statements with confidence. Moreover, data-driven reporting provides the foundation for Commission staff to monitor and improve its control environment.