On July 29, 2004, the OIG issued Audit Report 4-34, Audit of SBA’s Process for Complying with the Federal Managers’ Financial Integrity Act Reporting Requirements. The overall objective of this limited scope audit was to evaluate the adequacy of SBA’s process for assessing and reporting on the effectiveness of its internal controls in accordance with the Federal Managers’ Financial Integrity Act, the Office of Management and Budget (OMB) Circular A-123, and Government Accountability Office standards. Specifically, to: (1) determine what policies and procedures the SBA had implemented to ensure that SBA managers were meeting specific objectives of the FMFIA; (2) assess the adequacy of the processes used by the SBA to develop and implement appropriate controls, assess risks, improve internal controls, and report annually on the adequacy of its internal controls; and (3) determine the adequacy of procedures the SBA used for gathering, assessing, summarizing, and reporting the data provided by its program and district offices for the development of the Administrator’s statement of assurance.
The OIG determined that the SBA had not established and maintained an effective process for ensuring SBA’s compliance with FMFIA’s annual internal control assessment and reporting requirements. In particular, the: (1) SBA needs to more effectively communicate its FMFIA assessing and reporting requirements; (2) SBA’s policies and procedures regarding internal control assessment are not sufficient; (3) management is not performing complete risk assessments of their respective offices in accordance with regulations; (4) Office of the Chief Financial Officer needs to take a more active role in monitoring the FMFIA reporting process; (5) SBA’s FY 2002 Performance and Accountability Report (PAR) regarding the Agency’s internal control process contained inaccurate information, and (6) SBA has a potential material weakness related to its FMFIA internal control assessment and reporting process.