Agency Managers Get Needed Tool – a New Green Book

How can a green book help managers?

Managers are required by law to assess their internal control each year, and they need a guide in doing that.  “The Green Book” (formal title: Standards for Internal Control in the Federal Government) is such a guide. This guide is developed and published by the Government Accountability Office (GAO). The new edition came out in September 2014, and is the first new edition since 1999.

After managers complete their internal control assessments, their agency heads must report to the President and the Congress annually on their internal control. That report is a big deal. In support of that report, managers at all levels need to ensure that all internal controls — including plans, policies, procedures — are rigorously reviewed for effectiveness and efficiency.  The Green Book provides criteria to help managers perform those reviews.

How does it work?  Let’s examine an actual requirement from the standards: “Management should establish an organizational structure, assign responsibility, and delegate authority to achieve the entity’s objectives.”  The previous version of the Green Book stopped at this level of guidance. The latest version is more detailed, and is more helpful. For example, the new Green Book adds specificity to the above requirement:

• Management periodically evaluates the organizational structure so that it meets the entity’s objectives and has adapted to any new objectives for the entity, such as a new law or regulation.
• Management assigns responsibilities to key roles, and those in key roles can further assign responsibilities below them, but key roles retain ownership for fulfilling the overall responsibilities.

This new degree of specificity can facilitate both the design and review of internal control at any level. The added specificity is evidenced by the addition to the five standards (which stay basically the same) of 17 principles (each standard has two or more principles) and 47 attributes (each principle has two or more of these characteristics).

Therefore, not only is this new Green Book (available on GAO’s website) a necessary tool for performing the required annual assessment, it can be used by any manager at any level and by any Federal employee involved in improving processes and procedures at work.