R 101658Z APR 17
FM CNO WASHINGTON DC
INFO CNO WASHINGTON DC
MSGID/NAVADMIN/CNO WASHINGTON DC/N09/APR//
SUBJ/LEADERSHIP PRIORITY AND ACCOUNTABILITY FOR EFFECTIVE INTERNAL CONTROLS//
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
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
5. Released by ADM W. F. Moran, Vice Chief of Naval Operations.//