December 21, 1999
To: John C. Truesdale, Chairman
Leonard R. Page, General Counsel
From: Jane E. Altenhofen, Inspector General
Subject: Inspection Report No. OIG-INS-4-00-01: Review of NLRB's Compliance with the Federal Managers' Financial Integrity Act of 1982
The Federal Managers' Financial Integrity Act of 1982 (the Act or FMFIA) requires executive agencies to establish internal accounting and administrative controls in accordance with the Comptroller General's standards and related requirements. The Act further requires that agency heads submit an annual statement to the President and the Congress on the adequacy of internal controls and actions taken to correct weaknesses identified. At the National Labor Relations Board (NLRB or Agency) the Chairman and General Counsel both sign the assurance statement.
The Inspector General is to report annually to the head of the Agency on the adequacy of the Agency's review of internal controls. This review covered the fiscal year ended September 30, 1999. We reviewed the Agency's compliance with: the Act; Office of Management and Budget (OMB) Circular A-123, Management Accountability and Control; and OMB Circular A-127, Financial Management Systems. We reviewed letters of assurance submitted by Agency officials, results of evaluations performed by financial system managers, a draft report from the Director of Administration to the Chairman and General Counsel outlining the Agency's review process, and the draft assurance statement from the Chairman and General Counsel to the President. We also interviewed the Management Control Planning Committee (MCPC) Chairman, MCPC Coordinator, and managers with FMFIA evaluation and reporting responsibilities representing the Board, program offices of the General Counsel, and the Division of Administration.
We found that the evaluation of the system of internal accounting and administrative control had been carried out in a reasonable and prudent manner for the year ended September 30, 1999. During the review, nothing came to our attention that would indicate that the Board did not substantially comply with the above mentioned guidelines.
The draft assurance statement identified no material weaknesses or material nonconformances for fiscal year 1999. The draft report from the Director of Administration identified no deficiencies (material weaknesses) but noted that several designated managers referenced Office of Inspector General findings regarding time and attendance and the Case Activity Tracking System. The draft report also referenced an Office of Personnel Management review issued in July 1999 that contains six required actions which the Agency must take to be in compliance with statutory Merit System Principles and governmentwide regulations. We agree with these conclusions.
We also identified two actions management should take to better implement the requirements of Circular A-127.
- OMB Circular A-127 requires agencies to prepare annual financial management plans in accordance with guidance issued annually by OMB. The circular states that agencies not covered by the Chief Financial Officers (CFO) Act shall prepare plans following the CFO Financial Management 5-Year Plan guidance, but are not required to submit the plans to OMB. The Agency did not prepare this plan due to an administrative oversight. Representatives of the Financial Planning Committee (FPC) agreed to develop the 5-year plan.
- OMB Circular A-127 identifies financial management system requirements that should be reflected in the design structure. The review methodology used by Agency systems managers does not document consideration of each of these requirements because the Agency did not update the review methodology when OMB Circular A-127 was revised on July 23, 1993. The Deputy Director of Administration, who serves as the Chairman of both the FPC and the MCPC, said that the FPC would revise the methodology used by systems managers to review financial systems.
The Deputy Director of Administration reviewed a draft of this report, agreed with our conclusions, and incorporated one suggestion we made into a revised draft report from the Director of Administration.
This review was done in accordance with the Quality Standards for Inspections issued by the President's Council on Integrity and Efficiency.
cc: Director of Administration
Chairman, MCPC