TREASURY DIRECTIVE 40-04

DATE: July 1, 2024

SUBJECT: Treasury Internal Control Program

  1. PURPOSE. The Department of the Treasury's Internal Control Program (TICP) is a program mandated by statute and regulation for implementation by each Treasury component to ensure that operational, financial, program and administrative internal controls provide a level of assurance toward operational and fiscal effectiveness and efficiency. This Directive ensures that an appropriate internal control program is operational for all bureaus and reporting entities in the Department. It implements applicable statutes, regulations, and other guidance related to internal controls. TD 40-04 authorizes the issuance of Treasury Directive Publication (TDP) 40-04, “Treasury Internal Control Program,” which describes in further detail the guidance and implementation requirements outlined in this Directive.
  2. SCOPE. This Directive applies to all bureaus, offices, and organizations in the Department of the Treasury (“Treasury” or “the Department”), including the offices of Inspectors General within the Department. The provisions of this Directive shall not be construed to interfere with or impede the authorities or independence of the Department’s Inspectors General.
  3. POLICY. Treasury’s policy is to improve and maintain the accountability and effectiveness of internal controls for all programs and operations within the Department and ensure compliance with laws and regulations.
  4. RESPONSIBILITIES.
    1. The Secretary of the Treasury (“Secretary”) serves as the highest authority for reasonable assurance of internal control throughout the Department. The Secretary certifies and signs the annual Statement of Assurance and related required reports.
    2. The Assistant Secretary for Management (ASM) oversees all activities related to the internal control systems of the Department and ensures the proper and timely completion of reporting requirements related to internal controls.
    3. The Deputy Chief Financial Officer (DCFO) will:
      1. 1) Coordinate, monitor, manage, direct, and evaluate internal control efforts within the Department, including department-wide efforts under the Federal Managers’ Financial Integrity Act (FMFIA) (31 U.S.C. § 3512(c) and (d)), the Federal Financial Management Improvement Act (FFMIA) (31 U.S.C. §3512 note), , the Government Accountability Office (GAO) Standards for Internal Control in the Federal Government, and the Office of Management and Budget (OMB) Circulars A-123 and A-136;
      2. 2) Ensure that each bureau and reporting entity establishes a control-conscious environment that provides a disciplined atmosphere in which managers are aware of the need to establish systematic controls, monitor their application, and periodically review their effectiveness;
      3. 3) Provide oversight and guidance to the bureaus and reporting entities concerning the maintenance of effective controls;
      4. 4) Coordinate receipt of semiannual reports from the Department’s Inspectors General and transmission to Congress, as required by 5 U.S.C. § 405(c) as amended; and
      5. 5) Issue, adopt, amend, and implement new and revised guidance and policy governing all Treasury financial management systems, financial accounting and reporting activities, internal control activities, as well as financial assistance administration within the Department.
    4. Bureau Heads, the Offices of Inspector General, and officials designated will:
      1. 1) Take all necessary steps to create an environment within their respective organizations to ensure operational efficiency and adherence to all applicable statutory and regulatory standards related to internal controls, accounting, and financial assistance;
      2. 2) Provide information, data, reports, and assurances, as necessary, to the DCFO that all internal controls and financial management systems within their respective organizations adhere to applicable statutory and regulatory standards;
      3. 3) Ensure timely completion of corrective actions for identified control deficiencies; and
      4. 4) Ensure that all employees are aware of expectations, appropriately trained, and are subject to appropriate performance standards related to internal controls.
  5. AUTHORITIES.
    1. Federal Managers Financial Integrity Act of 1982 (FMFIA), (Public Law 97-255)
    2. Chief Financial Officers Act of 1990 (Public Law 101-576)
    3. GPRA Modernization Act of 2010 (Public Law 111-352)
    4. Federal Financial Management Improvement Act of 1996 (FFMIA), (Public Law 104- 208)
    5. Federal Information Security Modernization Act of 2014, P.L. 113-283
    6. Payment Integrity Information Act of 2019 (PIIA) (Public Law 116-117)
    7. Title 2 of the Code of Federal Regulations (2 CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR PART 200)
  6. REFERENCES.
    1. OMB Circular No. A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control (as revised) and Appendices:
      1. 1) Appendix A (Management of Reporting and Data Integrity Risk),
      2. 2) Appendix B (Improving the Management of Government Charge Card Programs),
      3. 3) Appendix C (Requirements for Payment Integrity Improvement), and
      4. 4) Appendix D (Compliance with FFMIA)
    2. CFO Council, Implementation Guide for OMB Circular A-123
    3. "GAO Standards for Internal Control in the Federal Government" (as revised)
    4. OMB Circular A-136, “Financial Reporting Requirements” (as revised)
    5. Reports Consolidation Act of 2000 (Public Law 106-531)
  7. CANCELLATION. Treasury Directive 40-04, "Treasury Internal (Management) Control Program," dated October 31, 2022, is superseded.
  8. OFFICE OF PRIMARY INTEREST. Office of the Assistant Secretary for Management, Office of the Deputy CFO.

 

/S/
Anna Canfield Roth
Assistant Secretary for Management