As the Committee of Sponsoring Organizations of the Treadway Commission gets set to expand in late 2014, one state is in midst of its five-year anniversary implementing its own internal control program that it is highlighting as a model for other local governments to follow.
During the recently held National Association of State Auditors, Comptrollers and Treasurers conference in Boston, Ben McLawhorn, risk mitigation services manager for the North Carolina Office of the State Controller gave a presentation on the Tar Heel State’s Enhanced Accountability in Government through Leadership and Education program.
McLawhorn explained the advantages of EAGLE, which the North Carolina OSC began in 2008 following passage of the State Governmental Accountability and Internal Control Act in the 2007 General Assembly session, during a panel called “Internal Control: Revised Standards and Frameworks.”
“You must have a strong executive leadership in support of your program,” saidMcLawhorn in describing keys for states to develop a successful internal reporting initiative. “Training is absolutely essential.”
North Carolina adopted the internal control framework established by COSO and Control Objectives for Information and Related Technology. COSO, which formed in 1985, issued updates to its internal control framework first published in 1992 that will be implemented on Dec. 15, 2014.
McLawhorn explained that the EAGLE Program is aimed at identifying the internal controls that can either prevent or detect errors from occurring during transaction processing. Internal control officers are appointed and serve as a primary liaison on internal control matters between agencies and the OSC. He said having an internal control program “solidifies the state’s status as national leader in governmental accountability and fiscal management.”
The NASACT panel also featured a presentation about the expanded COSA standards from Tom Muldoon, senior manager in the global public sector division at Grant Thornton LLP. The Government Accountability Office’s (GAO) planned revision to the Standards for Internal Control in Federal Government was also discussed as a tool local municipalities can utilize going forward by Grant Simmons, a senior auditor for the GAO’s financial management and assurance team.
“Internal controls impact everyone,” Muldoon said. “It impacts the employees; it impacts auditors, state controllers, treasurers, senior managers, board of directors, so it’s nothing that we can escape.”
