Summary of Financial Statement Audit Material Weaknesses and Nonconformances


At the close of FY 2019, the AOC had no material weaknesses or other nonconformances in internal control over program operations and compliance with applicable laws and regulations. Material weaknesses and reportable conditions are determined by management. Using a variety of information sources, the AOC managers and staff continuously assess and improve the effectiveness of internal control for program operations. These information sources include, but are not limited to, management knowledge gained from the daily operation of programs and systems, management reviews, program evaluations and the annual independent financial statement audit.


Material Weaknesses Summary


A material weakness is defined as a reportable condition that the agency head determines to be significant enough to be reported outside the agency. In FY 2019, zero audit material weaknesses were identified in the agency’s financial statement audit.


Nonconformances Summary


A reportable condition is defined as a control deficiency, or combination of control deficiencies, that in management’s judgment represent significant deficiencies in the design or operation of internal controls that could adversely affect the organization’s ability to meet its internal control objectives. In FY 2019, zero nonconformances were identified in the agency’s financial statement audit.


Other Financial Compliances Anti-Deficiency Act


The Anti-Deficiency Act, as amended, prohibits federal agencies from obligating or expending federal funds in advance or in excess of a congressional appropriation and from accepting voluntary services. The agency had no Anti-Deficiency Act violations for FY 2019.


Debt Collection Improvement Act


The Debt Collection Improvement Act of 1996 requires that any nontax debt or claim owed to the U.S. government that is 180 days delinquent, with certain exceptions, will be referred to the U.S. Department of the Treasury (Treasury) for collection. Debt that is in litigation or foreclosure, with a collection agency or designated federal debt collection center, or that will be disposed of under an asset sales program, is exempt from transfer. The AOC did not refer any debts to Treasury for collection in FY 2019.


Digital Accountability and Transparency Act


The Digital Accountability and Transparency Act of 2014 (DATA Act) was implemented in May 2017 for the federal executive branch. The DATA Act sets the standards for federal financial data to make federal spending data more accessible, searchable and reliable. As a legislative branch agency, the AOC is not required to comply with the DATA Act and is not participating in the report submissions.


Federal Financial Management Improvement Act


The Federal Financial Management Improvement Act of 1996 (FFMIA) requires that federal agencies’ financial management systems comply with federal accounting standards, federal system requirements and the U.S. Standard General Ledger (USSGL) at the transaction level. An agency achieves substantial compliance when the agency’s financial management systems routinely provide reliable and timely financial information for managing day-to-day operations, as well as producing reliable financial statements. The AOC substantially complied with the FFMIA in FY 2019.


Federal Information Security Modernization Act


The Federal Information Security Modernization Act of 2014 (FISMA) requires each executive branch agency to develop, document and implement an agencywide program to provide security for government information and information systems that support agency operations and assets. FISMA is inapplicable to legislative branch agencies and the AOC, therefore, is not required to comply with its requirements. Nonetheless, the AOC references FISMA and the U.S. GAO Federal Information System Controls Audit Manual and the National Institute of Standards and Technology (NIST) Special Publications for guidance on its risk-based information security program.


The AOC, with support from an independent third party, reaccredits its information systems every three years and tests approximately one-third of all controls each inter mediate year. This effort evaluates the information security controls consistent with the AOC’s policies. The AOC’s risk management and continuous monitoring strategy is based on current NIST guidelines.


Last year, the AOC improved its information systems security posture by becoming the first legislative branch agency to deploy two-factor authentication for all system access. In FY 2019, the AOC improved its security by revamping the agency’s computer security awareness training, testing controls and procedures (including phishing and spear phishing tests); enforcing procedures and processes for detecting, reporting and responding to security incidents; improving vulnerability


2019 PERFORMANCE AND ACCOUNTABILIT Y REPORT Management’s Discussion and Analysis • Section I 45


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