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History of Internal Control Assurance

Page updated 15 Apr 2016

The Secretary to Treasury is required to prepare the Financial Statements of the Government (FSG) for the Minister of Finance and to attest to specific aspects of the Statements (s29(1) Public Finance Act 1989).

In order to fulfil this function the Treasury requires sufficient assurance about the operation of the financial management system to have confidence that the figures being reported in the Financial Statements of the Government are meaningful in describing the financial dimension of the Government's activities.

In signing the FSG, a greater level of assurance is required than is available from reliance on the statements of responsibility prepared in relation to audited departmental financial statements. A number of performance and reporting risks exist beyond the matters addressed through external auditing, which are significant to the value of Crown reporting.

Since the passing of the Public Finance Act in 1989 the Treasury has therefore operated an assurance function:

  • From 1989 through the direct employment of a financial management assurance team.
  • From 1995 to 2002 by commissioning periodic financial management reviews of individual elements of the financial management system in government departments.
  • From 2002 to 2012 by obtaining independent assessments of internal controls from departmental audit service providers against internal control elements and criteria in a process called Departmental Internal Control Evaluation (DICE).
  • From 2013 to 2015 by obtaining Treasury’s assurance by surveying those responsible for internal control, using a process named Chartered Institute of Public Finance and Accountancy - Treasury Internal Controls Knowledge (CIPFA TICK).
  • From 2016 the Treasury's assurance continues to be obtained by surveying those responsible for internal control, using a process named Internal Control Assessment Tool (ICAT).

The ICAT process uses the nine principles identified by the Professional Accountants in Business Committee (PAIB) of the International Federation of Accountants (IFAC). These principles represent good practice for evaluating and improving internal control systems. They are not formulated to design and implement an internal control system, for which other existing guidelines are referenced, but to facilitate the evaluation and improvement of existing internal control systems by highlighting a number of areas where the practical application of such guidelines often fails in many organizations.

See Making Use of the ICAT Scores: Guidance for Departments (April 2016) for more information.

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