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NECC Has Not Updated Its Internal Control Plan Since 2015.

Not reviewing and updating its ICP exposes NECC to heightened risks.
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Overview

Annual Internal Control Questionnaires submitted by NECC to CTR indicated that the internal control plan (ICP) was updated annually in fiscal years 2019 and 2020. However, when we asked to review the ICP that was in effect during the audit period, NECC gave us one dated May 2015 that did not include the required risk response. According to management, NECC’s ICP had not been updated since that time.

Not reviewing and updating its ICP as conditions warrant (but at least annually) as required by CTR impedes NECC’s response to changes in its control environment and exposes it to heightened risks in its operations. 
 

Authoritative Guidance

According to the CTR Internal Control Guide from June 2015,

Internal Control Plans are based on comprehensive assessments of risks, especially those related to the prevention of fraud, waste and abuse. . . . Accordingly, departments are obligated to revise their ICPs whenever significant changes occur in objectives, risks, management structure, program scope, etc. At the very least, the ICP must be reviewed and updated annually. . . .

To be considered compliant, a department’s Internal Control Plan must contain . . . [a] Risk Response.

Reasons for Noncompliance

NECC personnel could not explain why the ICP had not been updated as required by CTR.

Recommendations

  1. NECC should review and update its ICP whenever significant changes occur in objectives, risks, management structure, or program scope, but at least annually.
  2. NECC should properly document a risk response that includes all aspects of its business operations.

Auditee’s Response

As stated in the audit report, the college did update and file with the State Comptroller’s Office, the Annual Internal Control Questionnaire for the audit period, fiscal years 2019 and 2020. However, the college had not updated its Internal Control Plan (ICP) for this audit period.

We agree with the above two recommendations. [NECC’s Finance Department] is working with college leaders in updating the college’ Internal Control Plan, and will be completed in July. Annually or if need be earlier, we will update the ICP.

Auditor’s Reply

Based on its response, NECC is taking measures to address our concerns on this matter.

Date published: June 30, 2021

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