Internal Controls

2 CFR § 200.1 Definition-Internal Controls and 2 CFR § 200.303 Internal Controls are two important references when looking at internal controls.

Internal controls means a process, implemented by State agencies, designed to provide reasonable assurance regarding the achievement of objectives in the effectiveness and efficiency of operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations.

Internal controls serve to safeguard assets and prevent fraud, waste, abuse, improper payments, and mismanagement. They include methods and procedures the agency uses to manage the day-to-day operations of grant-supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved.

There is no standardized set of internal controls as they will differ based on each agency’s structure, processes, and State requirements.

RSA’s review of internal controls is to determine whether the agency’s internal controls meet the requirements at 2 CFR § 200.303 Internal Controls that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.

The State is authorized to adopt any set of internal controls that meets the requirements at § 200.303.