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GOVERNMENT OF THE DISTRICT OF COLUMBIA
OFFICE OF THE CHIEF FINANCIAL OFFICER
Chief Financial Officer Announces Audit Committee to Review Financial Management and Internal Controls
District of Columbia Chief Financial Officer Natwar M. Gandhi today announced the establishment of the Audit Committee to Review Financial Management and Internal Controls as another important step toward strengthening the District’s financial operations for the long term following the recent changes in the Office of Tax and Revenue.
The Committee will assist the CFO in reviewing the internal control structures of the OCFO’s financial management operations, as well as its compliance with existing policies and procedures. The distinguished leadership of the Committee includes (biographical briefs follow below):
The Committee’s overriding objective is to review the performance of the Office of the Chief Financial Officer and the OCFO function in each District agency. The Committee will provide quarterly reports on its findings and recommendations.
The Office of the Chief Financial Officer must rebuild the trust and credibility that has been damaged by the allegations of gross impropriety in the Office of Tax and Revenue,” said Gandhi, in unveiling the Committee members today. “I want this Committee to carefully and completely scrutinize our operations throughout the District. I very much appreciate the members’ willingness to serve, and I pledge them the OCFO’s full support.”
“We will give this committee our full cooperation and support,” said Mayor Adrian Fenty. “These individuals are committed to the District and we expect our financial management controls will benefit from their experience and diligence.”
“This is a step in the right direction,” said Finance and Revenue Committee chairman Jack Evans. “We have a long road ahead of us and the assistance of this committee will be invaluable.”
The Committee will be guided by the advice published in 1995 in OMB circular A-123, Management Accountability and Control, as well as the standards for reviewing the adequacy of internal controls contained in the Sarbanes-Oxley Act of 2002. The formation of an audit committee is also recommended to assist states and municipalities in complying with the GAO’s new Government Auditing Standards (The Yellow Book), issued in July 2007 for implementation in 2008, making the District among the first major jurisdictions to have an audit committee assisting in Yellow Book compliance.
The Executive Office of the Mayor, the District Council and the Inspector General will each have a liaison to the Audit Committee.
The Committee has agreed to begin its work by reviewing the financial operations of the Office of the Chief Financial Officer. Their work is expected to begin immediately.
A more detailed explanation of the Committee’s mission and principles follows, as well as the previously referenced biographies of Committee members.
Historically, the Chief Financial Officer (CFO) has appointed several advisory boards to advise the office on a variety of matters. These boards, such as the CFO Advisory Council, Business Advisory Council, Real Estate Advisory Council, Revenue Estimating Technical Review Committee, and Tax Advisory Council, provide substantive expertise and recommendations to the CFO on an ongoing basis.
Audit Committee Mission
The CFO is establishing a new advisory board, the Audit Committee to Review Financial Management and Internal Controls (Audit Committee), to assist the CFO in reviewing internal control structures and compliance with established policies and procedures for the District’s financial management operations.
Audit Committee Appointees
The CFO will be appointing the following individuals to serve on the Audit Committee, each for a threeyear term ending December 31, 2010 (see brief biographies, below):
The Executive Office of the Mayor, the District Council, and the Inspector General will each have a liaison to the Audit Committee:
The Audit Committee will be guided by the advice published in 1995 in OMB Circular A-123, Management Accountability and Control, which set forth eight principles for control standards in a mature organization:
These eight principles apply to management controls in general, in any sort of program. The Audit Committee will assist the CFO by reviewing its programs, processes, and systems for financial management and controls throughout the District, for their conformance with the eight principles, and will recommend corrective actions where needed.
The Audit Committee will also be guided by the section 404 of the Public Company Accounting Reform and Investor Act of 2002, also known as the “Sarbanes-Oxley Act of 2002,” which sets forth standards of review for the assessment of the adequacy of internal controls for financial reporting of publicly traded companies.
Initially, the Audit Committee will be charged with review of the financial operations of Office of the Chief Financial Officer (OCFO). It will then move on to the financial operations of all other District government agencies, including the financial operations of the Office of Contracts and Procurement, the Department of Health, and, if it is enacted, the proposed Department of Health Care Finance.
The Audit Committee will meet on a monthly basis, commencing in December, 2007, and concluding in December, 2010, subject to renewal by the Chief Financial Officer. It will hire staff and, if necessary, contract with an accounting firm to carry out its mission, supported from the budget of the OCFO.
The Audit Committee will report to the CFO on a quarterly basis, with its final report due no later than March 31, 2011. The quarterly and final reports will be posted timely on the CFO’s website. The Audit Committee will also provide quarterly briefings on its findings for the Mayor and the Council.
AUDIT COMMITTEE APPOINTEES
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