Risk management, internal controls and aviation safety: perspectives of a fixed-wing manager and financial aviator.

Author:Maitre, Sue

Drawing similarities between flight operations and financial resource management may seem a stretch but, in both worlds, the programmatic oversight of personal accountability--to comply with rules, regulations, policy, and procedures--engenders mission achievement. Both operational risk management in the aviation community, and internal control compliance In the financial management community, mitigate liability to the organization in the discharge of respective duties.

Each individual, at every level of the organization--whether performing a pre-flight checklist or examining a voucher for payment--will improve safety and stewardship, and better meet mission objectives, if the imperative of personal accountability is communicated and observed up and down the chain-of-command.

Like many members of today's military, I hold dual military specialties, as much a "Jill-of-Many -Trades" as I am a subject matter expert in financial management. For the first half of my career I flew search and rescue and law enforcement missions for the Coast Guard throughout the South Pacific and Western Caribbean, to include collateral duties as Air Station Safety Department Head. Then, consistent with guidance from the Coast Guard Commandant, I augmented my career experiences with a Master's Degree in Accounting and transitioned to an assignment at Coast Guard Headquarters as a financial manager.

Since joining the "dark side" (or moving Into the "light"--depending on where you sit today), I've participated in remediating personal property and real property, performing audit readiness, developing financial management policy and procedures, and Implementing an organic internal control structure across the organization. From a resource-to-operatlons perspective, I believe prudent stewardship of limited financial resources and safe operational mission effectiveness are both indisputably contingent upon distributed ownership of responsibility at all levels of command.

Characterizing Internal Controls

The Coast Guard, as a material component of the Department of Homeland Security (DHS), recently received a second consecutive unmodified ("clean") financial audit opinion from an independent auditor. Contributing to this significant accomplishment, the Coast Guard has pursued extended engagements to remediate material weaknesses In Its financial management and, thereby, overcome deficiencies related to financial reporting and property accountability.

While the organization can now demonstrate the reliability of its financial reporting and the underlying business processes, success has come with a heavy cost in resources. This is due to limitations in the Coast Guard's financial system that necessitate on-top adjustments, compensating controls, extensive data mining and manual report reconciliation throughout each financial period. In the coming years, the Coast Guard and DHS hope to leverage the clean audit over financial statements to leap systems and procedural hurdles that prevent our organizations from receiving a clean opinion on Internal Controls over Financial Reporting (ICOFR) and Internal Controls Over Operations (ICOOP). Both are required by Office of Management and...

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