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Solution 12 of 25PWS · Data Review/ValidationFO · Accounting
A-123 Internal Controls and Year-End Accruals Audit Readiness
OMB Circular A-123 requires RD to maintain a documented internal-control posture for financial reporting, and year-end accrual entries (interest on borrowings from Treasury, financing-account interest, undelivered orders, accrued grants, accrued payroll) drive material AFR positions auditors examine in detail — but accrual documentation is uneven across program offices and NFAOC.
Why It Matters
A-123 deficiencies escalate into audit findings; year-end accrual misstatements drive AFR restatements; both feed the same OIG / GAO finding loop that drove the FY 2023 and FY 2025 ULO findings.
HSG's Approach
- 1Stand up an audit-ready evidence repository with version control, role-based access, and immutable audit-trail logging.
- 2Map every material year-end accrual to its supporting calculation, source data, and journal entry, with OMB A-123 internal-control linkage.
- 3Use AI tooling to surface accrual outliers (year-over-year variance, seasonal pattern break, missing supporting documentation) for analyst review.
- 4Document Treasury USSGL Credit Reform Guidance, TFM Part 2 Chapter 4600, and FASAB credit-reform guidance traceability for every material entry.
- 5Produce a year-end close calendar with daily / weekly milestones, owner assignments, and exception escalation paths.
Expected Deliverables
- Audit-ready evidence repository (SharePoint / OneDrive / version control)
- A-123 internal-control crosswalk to material accruals
- Accrual outlier surveillance dashboard
- USSGL / TFM / FASAB traceability log
- Year-end close calendar with milestone tracking
Expected Outcome
Reduce audit-finding risk by 50% on year-end accruals and accelerate AFR sign-off by two weeks.