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TREASURY DIRECTIVE 40-04

 Date: July 12, 2017
 
SUBJECT: Treasury Internal Control Program
 
1.      OVERVIEW. The Department of the Treasury's Internal Control Program (TICP) is a program mandated by statute and regulation for implementation by each Treasury component to ensure that operational, financial, program and administrative internal controls provide a level of assurance towards operational and fiscal effectiveness and efficiency. The basic principles of the TICP are: 1) maintaining a culture of continuous business process improvement, self-reporting of internal control deficiencies, and appropriate corrective action; identification/mitigation of risk before it negatively impacts the mission; 2) maintaining an open communication framework between a component's leadership, its appointed TICP coordinator, and key stakeholders.
 
2.      PURPOSE. This directive ensures that an appropriate internal control program is operational for all bureaus in the Department. It implements applicable statutes, regulations, and other guidance related to internal controls.
 
3.      SCOPE. This directive applies to all bureaus, offices, and organizations in the Department of the Treasury, including the offices of inspectors general within the Department.  The provisions of this directive shall not be construed to interfere with or impede the authorities or independence of the Treasury Inspector General, the Treasury Inspector General for Tax Administration, or the Special Inspector General for TARP.  
 
4.      POLICY. Treasury’s policy is to improve and maintain the accountability and effectiveness of internal controls for all programs and operations within the Department, and ensure compliance with laws and regulations. 
 
5.      RESPONSIBILITIES.
 
a.       The Secretary of the Treasury (“Secretary”) serves as the highest authority for reasonable assurance of internal control throughout the Department. The Secretary certifies and signs the annual Statement of Assurance and related required reports.
 
b.      The Assistant Secretary for Management (ASM) oversees all activities related to the internal control systems of the Department and ensures the proper and timely completion of reporting requirements related to internal controls.
 
c.       The Deputy Chief Financial Officer (DCFO) will:
 
1)      Coordinate, monitor, manage, direct, and evaluate internal control efforts within the Department, including department-wide efforts under FMFIA, FFMIA, GAO Standards for Internal Control, and OMB Circular A-123;
 
2)      Ensure that each bureau establishes a control-conscious environment that provides a disciplined atmosphere in which managers are aware of the need to establish systematic controls, monitor their application, and periodically review their effectiveness;
 
3)      Provide oversight and guidance to the bureaus concerning the maintenance of effective controls;
 
4)      Coordinate receipt of reports from the Department’s Inspectors General and transmission to Congress, as required by Section 5 of the Inspector General Act of 1978, as amended; and
 
5)      Make recommendations to the ASM regarding the adoption, revision, and implementation of new and revised principles and standards governing internal control systems and accounting systems (with the assistance and technical expertise of the Office of the Fiscal Assistant Secretary for matters related to government-wide accounting and reporting) within the Department.
 
d.      Bureau Heads, the Inspector General, the Treasury Inspector General for Tax Administration, and officials designated will:
 
1)      Take all necessary steps to create an environment within their respective organizations to ensure operational efficiency and adherence to all applicable statutory and regulatory standards related to internal controls;
 
2)      Provide information, data, reports, and assurances, as necessary, to the DCFO that all internal controls and financial management systems within their respective organizations adhere to applicable statutory and regulatory standards;
 
3)      Ensure timely completion of corrective actions for identified control deficiencies; and
 
4)      Ensure that all employees are aware of expectations, appropriately trained, and are subject to appropriate performance standards related to internal controls.
 
6.      AUTHORITIES.
 
a.       Federal Managers Financial Integrity Act of 1982 (FMFIA), (Public Law 97-255)
 
b.      Chief Financial Officers Act of 1990 (Public Law 101-576)
 
c.       GPRA Modernization Act of 2010 (Public Law 111-352)
 
d.      Federal Financial Management Improvement Act of 1996 (FFMIA), (Public Law 104-208)
 
e.       Federal Information Security Modernization Act of 2014, P.L. 113-283
 
f.       Improper Payments Information Act of 2002 (Public Law 107-330)
 
g.      Improper Payments Elimination and Recovery Act of 2010 (IPERA) (Public Law 111-204)
 
h.      Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA) (Public Law 112-248)
 
7.      REFERENCES.
 
a.       OMB Circular No. A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control (Revised 7/15/2016) and Appendices:
 
1)      Appendix A (Internal Controls over Financial Reporting),
 
2)      Appendix B (Improving the Management of Government Charge Card Programs),
 
3)      Appendix C (Requirements for Effective Measurement and Remediation of Improper Payments), and
 
4)      Appendix D (Compliance with FFMIA)
 
b.      CFO Council, Implementation Guide for OMB Circular A-123
 
c.       "GAO Standards for Internal Control in the Federal Government" (September 2014)
 
d.      OMB Circular A-136, “Financial Reporting Requirements” (Revised September 18, 2014)
 
e.       Reports Consolidation Act of 2000 (Public Law 106-531)
 
8.      CANCELLATIONS. Treasury Directive 40-04, "Treasury Internal (Management) Control Program," dated January 4, 2001 is superseded.
 
9.      OFFICE OF PRIMARY INTEREST. Office of the Assistant Secretary for Management, Office of the Deputy CFO, Risk and Control Group.
 
 
/S/
                                                                                    Kody H. Kinsley
                                                                                    Assistant Secretary for Management
 
Last Updated: 7/19/2017 3:25 PM