Accenture Federal Services

Office of Management and Budget A-123 UpdateDelivering Value to the Federal Government

The update requires agencies to enhance their IC tools to document evidence of compliance with the GAO Green Book to prove that they have met all 17 IC principles.

Agencies will also need to create a Senior Management Council (SMC) or leverage an existing council to provide governance for establishing risk profiles, overseeing operation of an effective IC system and implementing an ERM.

ERMAgencies must develop an ERM program that adheres to the new Federal ERM Policy Framework and ERM Model and integrates risk and IC throughout all management processes, including strategy, budget, programs, accounting, internal controls and audits.

Mandatory ERM requirements include:

In FY 2016, develop an enterprise risk profile/risk inventory and an agency COO-approved risk appetite.

In FY 2017, build on this risk profile to extend capabilities for identifying new and

emerging risks, while monitoring changes to existing risks.

Agencies need to evaluate risks not only within internal processes but throughout the extended enterprise and external environment, at the same time as increasing their focus on fraud, grants, the Antideficiency Act, privacy and shared service risks.

The Accenture Federal Services Finance & Enterprise Performance practice maintains a dedicated core of highly experienced resources in risk management, internal control, culture evolution, enterprise performance, eGRC and risk analytics. We possess deep industry skills and support the majority of cabinet-level agencies. Aligned with specific functional areas of specialization, our professionals have a full understanding of the time-sensitive challenges and opportunities facing agencies.

Accenture Federal Services is acknowledged by industry analysts as a market leader in risk management consulting services, business intelligence, performance management services, systems integration and finance business process outsourcing. We relentlessly focus on outcomes, looking beyond simple risk avoidance and performance improvement to help agencies integrate internal controls into an enterprise risk management program, governed by their risk appetite, to achieve risk resiliency. We combine market-tested solutions with comprehensive eGRC tools, risk analytics and extensive experience to deliver high performance.

Challenges and OpportunitiesThe Office of Management and Budget (OMB) introduced draft updates to Circular A-123 to implement the FMFIA Act—integrating risk management and internal control (IC) activities into a Federal Government Enterprise Risk Management (ERM) Framework to improve mission delivery.

Under the new requirements, agencies have an opportunity to move to a holistic portfolio view of risk, integrating risk and IC into both administrative and program functions. With a robust data analytics capability, a holistic portfolio view provides agencies greater visibility into uncertainties, enabling better decision-making and improved results.

CAPs

Risks and Uncertainty

Strategic Decisions

(OMB A-11

• Strategic• Operational• Reputational• Financial• Etc.

• Mission/Vision• Goals/Objectives• Strategic Reviews

• Policy• President’s Budget• Congressional Justification

• Cross Agency Priority Goals• Agency Priority Goals• Program Operations• FedStat

• Operation Controls Objectives• Reporting Control Objectives• Compliance Control Objectives

Budget Decisions (OMB A-11)

Program Management (OMB A-11)

CXO/ Mission Support(OMB A-123)

Required Resources

PromptResolution

Senior Accountable

O�cial

Accurate Records

Critical Path Milestones

Internal Control System and AssessmentsAgencies should leverage SMCs to include the risks that have the most impact on mission outcomes in their Statement of Assurance (SOA), support ERM and implement Green Book standards for entity level controls, control activities and process controls. By increasing alignment of the control framework across the enterprise, agencies can eliminate duplication and improve risk mitigation effectiveness.

The update also increases documentation requirements and requires agencies to establish a reporting structure to identify deficiencies through IC assessments against Green Book compliance. Agencies must now ensure that supporting documentation substantiates the design and operating effectiveness of internal controls.

Applying a risk-based evaluation approach to internal control assessments will enable agencies to summarize deficiencies, evaluate principles and components, and conduct an overall assessment to identify material risk.

Correcting Deficiencies and ReportingBy conducting a root-cause analysis, agencies can treat more than just the symptoms arising from mitigation activities. They can tailor corrective actions to the operating environment, reduce implementation costs and mitigate the most risk.

We recommend that agencies consider using best practices, such as the Cooperative Audit Resolution and Oversight Initiatives (CAROI) when they review OIG and GAO audit reports. These practices will promote prompt Correction Action Plans (CAPs) and enable the agency to effectively respond to findings. Agencies should comply with the new Appendix A and include the risk profile and IC assessment procedures in the SOA.

When agencies implement the revised A-123 requirements, they have a unique opportunity to move to a portfolio view of risk—and to embed risk-based decision-making throughout the enterprise.

Agencies need to evaluate risks not only within internal processes but throughout the extended enterprise and external environment.

CAPs

Risks and Uncertainty

Strategic Decisions

(OMB A-11

• Strategic• Operational• Reputational• Financial• Etc.

• Mission/Vision• Goals/Objectives• Strategic Reviews

• Policy• President’s Budget• Congressional Justification

• Cross Agency Priority Goals• Agency Priority Goals• Program Operations• FedStat

• Operation Controls Objectives• Reporting Control Objectives• Compliance Control Objectives

Budget Decisions (OMB A-11)

Program Management (OMB A-11)

CXO/ Mission Support(OMB A-123)

Required Resources

PromptResolution

Senior Accountable

O�cial

Accurate Records

Critical Path Milestones

For More Information

To discuss increased value, performance and risk resiliency in your organization, please contact:

Havy Vu havy.vu@accenturefederal.com +1 571-414-4124

Michael Lumb, PMP, CGFM, CDFM michael.lumb@accenturefederal.com +1 571-414-3370

About Accenture Federal Services Accenture Federal Services is a U.S. company, with offices in Arlington, Va., and is a wholly owned subsidiary of Accenture LLP. Accenture’s federal business has served every cabinet-level department and 30 of the largest federal organizations with clients at defense, intelligence, public safety, civilian and military health organizations.

About Accenture

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

Copyright © 2016 Accenture All rights reserved.

Accenture, its logo, and High performance. Delivered are trademarks of Accenture.