How Allegient Defense’s Internal Control Team meets the Challenges of the Pandemic and the Transition to a New Administration

As the nation turns to face new environmental challenges, the Department of Energy (DOE) plays a critical role in maintaining and strengthening our energy resources. In more than five offices, Allegient Defense plays a key role in assisting the Offices in meeting its mission of establishing and implementing a system of internal control.

The process by which agencies in the Federal government meet the requirements of OMB Circular A-123—Management's Responsibility for Enterprise Risk Management and Internal Control—is one of the most important vehicles for providing agency executives with a framework that helps them make strategic, risk-based decisions to enhance agency value. In order to fulfill this OMB requirement, the Secretary of each Federal Department must sign an annual Assurance Memorandum attesting to the existence and effective operation of a system of internal control at the agency which they oversee. At the DOE, Allegient Defense uses its comprehensive subject matter expertise1 in internal control and risk management to assist the Offices Management in meeting requirements to prepare and submit all the key documents required in the OMB A-123 Assurance process.

However, meeting this requirement at the DOE is a particularly daunting and complex task, since the Assurance Statement signed by the Secretary requires that each of the 40+ suboffices within the Department attest to their individual compliance with the objectives of A-123. Therefore, every department must issue its own Assurance Statement, signed by the Assistant Secretary of Fossil Energy, consisting of all supporting documents that evidence the existence of processes to identify and address risk and develop and test the system of internal control. The Office must prepare a comprehensive Annual Risk Profile; a Financial Management Assessment Tool; an internal control testing plan and testing work emanating from that plan; an Entity Assessment Tool documenting the entity evaluations of internal control; and the Annual Assurance Letter. This collection of documents identifies any significant deficiencies and material weaknesses in internal control and identifies key areas of risk.

Completing this work in a normal year requires the participation of all suboffices within the Office’s including: 

·      Acquisition Management within Budget

·      Budget and Financial Management

·      Environment, Security, Safety, and Health

·      Information and Communication

·      Information Technology 

·      Workforce Planning and Administration

Each year, the Allegient Defense Internal Control Team conducts structured interviews with Office’s senior and support level staff to assess the risks faced by the Office and to identify emerging trends and risks. In both FY 2019 and FY 2020, before the department established its maximum telework policy, over 20 of these individual meetings took place. 

The 2020 COVID-19 Pandemic, however, challenged both DOE and the Allegient Defense team, as conducting these meetings in person soon became impossible. The preparation of complex documents with multiple moving parts—such as the FE Risk Profile—was hampered, as internal meetings where visual aids were used to chart interdependencies, risk rankings and controls were no longer permissible. The Risk Profile, which identifies the most significant risks faced by DOE in meeting strategic objectives arising from its activities and operations and the appropriate options for addressing those significant risks, requires input from multiple individuals. This Profile likewise needs to be compliant with OMB requirements, which includes the assessment of risk at the Offices’ cognizant organization. Without the direct personal collaboration from in-person meetings, the Allegient Defense team found the preparation of a Combined Risk Profile to be a critical challenge in the pandemic.

The COVID-19 regulations also affected the tools the internal control team used for system implementation—for instance, the FMA Tool used by DOE to document, analyze, and report their annual assessment of financial controls. In developing this tool, the internal control team and those being interviewed found it helpful to see all the risks and controls listed and ranked by importance in a single graphic, which served as a foundation for discussion among the group. The Allegient Defense team realized that such interaction would not be possible in a maximum telework environment without the availability of group in-person meetings. Yet the tool still needed to be completed, and the Office still needed to note the alignments of specific controls to specific risks.   

Despite the trials of this new environment, Allegient Defense worked to meet and overcome each challenge. The internal control team implemented tools such as WebEx to conduct essential meetings online, and in FY 2021 the complete program of over 15 risk interviews was completed 100% virtually. To maintain the same efficacy as a face-to-face session, the team prepared its questions in advance and provided them to interviewees early. All reference documents—developed as handouts for a live meeting—were restructured, provided as attachments, and rigorously referred to in advance. Allegient Defense team leads leveraged the strong relationships they had developed over the past 2 years with Office management in maintaining consistent communications and conversations.

In addition to the COVID-19 response, the Allegient Defense team is also taking on the challenges of orienting the new senior DOE management for FY 2021—including a new Acting Leadership—to the internal control program during the transition of Presidential Administrations. Personnel have approached this transition to new management with a proactive orientation program, preparing and circulating the  FY 2021 Risk Profile to the new management in advance before executing a comprehensive briefing of the Risk Issues so the Risk Profile could be submitted and approved on time. The Allegient Defense Internal Control Team is also currently in the process of developing the additional FY 2021 Internal Control Documentation for FY 2021 which will include the updated FMA, the Entity Assessment and the FY 2021 Assurance Letter. 

Allegient Defense’s Internal Control Team takes great pride in its effective and high-quality implementation of the Offices’ Risk Profile and Financial Management Tools in a virtual environment. The thorough planning and innovative use of structured virtual meetings with tight agendas and access to relevant supporting documents allowed the team to help the Office complete its A-123 mission. The OCFO has approved all submissions and complemented the department on their quality. Our team’s success in a pandemic environment and during a transition of administrations is a testament to sound planning, excellent communications, and the ability to foster strong relationships with leadership due to the consistent and high-quality execution of a tightly structured internal control program. Allegient Defense’s expertise in Internal Control and Risk Management and the use of high-quality virtual communications media has once again proven us a contractor of choice in support of our client’s mission.

1 Article developed by Allegient Defense team members, John Homan CPA, CGFM, CGMA and Malcolm Bowens