Comprehensive Compliance Strategy
Overview
The National Aeronautics and Space Administration (NASA) has developed a Comprehensive Compliance Strategy (CCS) that focuses on ensuring compliance with Generally Accepted Accounting Principles (GAAP) and other financial reporting requirements. This global financial management strategy was developed in conjunction with the accounting firm KPMG. The CCS also covers the standards and requirements necessary to cure deficiencies noted in audit and related reports. The CCS serves as the basis for implementing comprehensive proactive corrective actions as may be required; and, it provides the guiding principles for executing effective financial management functions and activities with internal control and compliance solutions inherently embedded in the processes.
Comprehensive Compliance Strategy Identifies GAAP and other Regulatory Requirements by Financial Statement Line Item
The structure of the CCS begins with the identification of the baseline requirements by financial statement line item and account, including those on the Balance Sheet, Statement of Net Cost, Statement of Financing and Statement of Budgetary Resources. The requirements for meeting standards are identified for each of the financial statement line items and are identified in conjunction with required financial statement assertions (Completeness, Existence, Accuracy, Valuation, Ownership, Presentation and Disclosure). This serves as the foundation for identifying the evidence of auditability for each such account as required to ensure an adequate audit trail exists along with proper supporting documentation. Furthermore, the CCS addresses overarching financial reporting processes and related information technology systems. The CCS also delineates the generic control environment necessary to ensure functions and activities adhere to financial reporting requirements.
In addition, the CCS provides a solid platform for sound financial management practices and standards, working in unison with NASA financial management policy including: NASA Procedural Requirements (NPR), NASA Policy Directives (NPD), Financial Management Operating Procedures (FMOP), and the Continuous Monitoring Program (CMP). The CMP is also designed to ensure that the CCS evidence of auditability flows naturally from the process, forming the Provide to Auditor (PTA) listing and associated document generation necessary to meet financial statement audit requirements. The alignment of CCS, the CMP and financial management policy not only identifies actions necessary to close compliance gaps, but also provides uniform guidance that results in consistent processes, standard financial performance measurement capability and GAAP compliance.
Continuously Updated
The components of the strategy are updated on a continuous basis to ensure that the CCS remains up to date with all governing requirements, including, but not limited to, current government regulations, accounting standards, communications from external auditors and other independent oversight bodies, reviews, and assessments. These updates also become the basis for developing issue-specific corrective actions or other remediation which may become necessary for continual full compliance with GAAP and other regulatory requirements.
Facilitates Monitoring and Oversight to Ensure Operational Effectiveness
Monitoring and oversight of the effectiveness of the CCS is conducted through the Continuous Monitoring Program (CMP) as well as through ongoing Evaluation Monitoring and Testing (EMT) periodic compliance reviews. These monitoring tools are intended to provide another level of management assurance regarding compliance with the CCS. They also serve as a review program to periodically measure the effectiveness of the CMP as well as ensure and validate the operation of a sound system of internal control over financial reporting. The CCS provides the roadmap for the ongoing achievement of financial management excellence.