Which act provides the legal framework for internal control in the Federal Government and requires ongoing evaluations and reports on the adequacy of internal accounting and administrative control?

Which act provides the legal framework for internal control in the Federal Government and requires ongoing evaluations and reports on the adequacy of internal accounting and administrative control?

• A. Federal Managers' Financial Integrity Act (FMFIA) of 1982
• B. OMB Circular A-123
• C. Sarbanes-Oxley Act
• D. Budget and Accounting Act

Answer: (A)

The main idea is establishing and maintaining reliable internal controls in the federal government and reporting on their effectiveness each year. The Federal Managers' Financial Integrity Act of 1982 provides the legal framework for this by requiring agencies to design, implement, and maintain internal controls and to conduct ongoing evaluations of their effectiveness. Each year, agencies must prepare reports assessing the adequacy of their internal accounting and administrative controls and submit those reports to the President and Congress, including disclosures of material weaknesses. This creates a formal, nationwide standard for accountability and remediation across federal agencies. OMB Circular A-123 is related but is not an act; it offers implementing guidance that helps agencies meet the FMFIA requirements by detailing how to assess controls and report on them. The Sarbanes-Oxley Act targets private-sector corporate governance and internal controls, not the federal framework. The Budget and Accounting Act deals with budgeting and accounting processes but does not establish the ongoing internal control evaluation and reporting framework.

The main idea is establishing and maintaining reliable internal controls in the federal government and reporting on their effectiveness each year. The Federal Managers' Financial Integrity Act of 1982 provides the legal framework for this by requiring agencies to design, implement, and maintain internal controls and to conduct ongoing evaluations of their effectiveness. Each year, agencies must prepare reports assessing the adequacy of their internal accounting and administrative controls and submit those reports to the President and Congress, including disclosures of material weaknesses. This creates a formal, nationwide standard for accountability and remediation across federal agencies.

OMB Circular A-123 is related but is not an act; it offers implementing guidance that helps agencies meet the FMFIA requirements by detailing how to assess controls and report on them. The Sarbanes-Oxley Act targets private-sector corporate governance and internal controls, not the federal framework. The Budget and Accounting Act deals with budgeting and accounting processes but does not establish the ongoing internal control evaluation and reporting framework.