​LEADERSHIP PRIORITY AND ACCOUNTABILITY FOR EFFECTIVE INTERNAL CONTROLS

UNCLASSIFIED
ROUTINE
R 101658Z APR 17
FM CNO WASHINGTON DC
TO NAVADMIN
INFO CNO WASHINGTON DC
BT
UNCLAS

NAVADMIN 088/17

MSGID/NAVADMIN/CNO WASHINGTON DC/N09/APR//

SUBJ/LEADERSHIP PRIORITY AND ACCOUNTABILITY FOR EFFECTIVE INTERNAL CONTROLS//



REF/A/DOC/OMB/15DEC16//
REF/B/DOC/DOD/30MAY13//
REF/C/DOC/SECNAV/21JUL14//
NARR/REF A IS OMB CIRCULAR A-123 MANAGEMENT'S RESPONSIBILITY FOR ENTERPRISE 
RISK MANAGEMENT AND INTERNAL CONTROL. 
REF B IS DOD INSTRUCTION 5010.40, MANAGER'S INTERNAL CONTROL PROGRAM (MICP) 
PROCEDURES. REF C IS SECNAV INSTRUCTION 5200.35F, DEPARTMENT OF THE NAVY 
INTERNAL CONTROL PROGRAM.//

RMKS/1. Leaders across the Navy at all levels must demonstrate an increased 
emphasis on responsible stewardship over taxpayer funds. Ensuring a clear 
tone about internal controls and putting appropriate risk management tools 
into practice in day-to-day processes are essential steps on the road to 
financial transparency and integrity.

2. By law, not later than September 2017, the Department of Defense must be 
ready to enter an audit of its full consolidated financial statement. This 
will take correct processes, systems, controls, policies and documented 
deficiencies. Our success is directly dependent on leadership commitment to 
improved internal control and accountability at all levels of the Navy.

3. As required by references (a), (b) and (c), each organization maintains a 
Manager's Internal Control Program (MICP). It is vital that this program 
become far more than a paper checklist submitted for an annual report. Move 
now into a risk management process that actively assesses day-to-day business 
processes and makes appropriate and timely changes in personnel or processes 
to ensure accountability. This is Commander's business. Accordingly, each 
Navy leader shall review their internal control program on a continuing basis 
to ensure that it is robust and sustains the relevant management controls to 
assure that:
a. Obligations, expenditures and revenues are properly recorded and accounted 
for in compliance with applicable laws.
b. Funds, property and other assets are fully accounted for and safeguarded 
against waste, loss and unauthorized use or misappropriation.
c. Programs are efficiently and effectively carried out according to 
applicable laws and management policies.

4. The Office of the Assistant Secretary of the Navy (Financial Management 
and Comptroller) is charged with the responsibility to administer our 
internal control program and with the functional leadership for the audit. 
Every Commander shall ensure appropriate attention to and effectiveness of 
internal controls. While many organizations use their Comptroller as a 
primary integrator, this effort will only succeed with an all-hands, risk-
based approach to ensure effectiveness. Regular updates on progress, barrier 
removal and lessons learned will be reported IAW the MICP and reviewed by 
leadership as well as the Navy Inspector General. Director of the Navy Staff 
and Vice Director Navy Staff are available to provide additional guidance or 
assistance.

5. Released by ADM W. F. Moran, Vice Chief of Naval Operations.//

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