EXECUTIVE OFFICE OF THE PRESIDENT
O F F I C E O F M AN AG E M E N T AN D B U D G E T
W AS H I N G T O N , D . C . 2 0 5 0 3

THE CONTROLLER

December 21, 2004
MEMORANDUM TO THE CHIEF FINANCIAL OFFICERS, CHIEF OPERATION
OFFICERS, CHIEF INFORMATION OFFICERS, AND PROGRAM MANAGERS
FROM:

Linda M. Springer
Controller

SUBJECT:

Revisions to OMB Circular A-123, Management’s Responsibility for Internal
Control

OMB Circular No. A-123 defines management's responsibility for internal control in Federal agencies. A re-examination of the existing internal control requirements for Federal agencies was initiated in light of the new internal control requirements for publicly-traded companies contained in the Sarbanes-Oxley Act of 2002. Circular A-123 and the statute it implements, the
Federal Managers’ Financial Integrity Act of 1982, are at the center of the existing Federal requirements to improve internal control.
This circular reflects policy recommendations developed by a joint committee of representatives from the Chief Financial Officer Council (CFOC) and the President’s Council on Integrity and
Efficiency (PCIE). The policy changes in this circular are intended to strengthen the requirements for conducting management’s assessment of internal control over financial reporting. The circular also emphasizes the need for agencies to integrate and coordinate internal control assessments with other internal control-related activities.
The revised circular is effective for FY 2006. Agencies should take steps in FY 2005 to prepare for its implementation. OMB plans to continue to work closely with the CFOC and the PCIE to provide further implementation guidance.

EXECUTIVE OFFICE OF THE PRESIDENT
O F F I C E O F M AN AG E M E N T AN D B U D G E T
W AS H I N G T O N , D . C . 2 0 5 0 3

THE DIRECTOR

December 21, 2004
CIRCULAR NO. A-123