SECNAVINST 5200 - Navy Issuances

SECNAV M-5200.35JUNE 2008Statement of AssuranceReporting PeriodThe MIC reporting period begins 1 July and ends 30 June. However, when statingmilestones in a corrective action plan, include the fiscal year quarters in which themilestones are scheduled for completion. For example, a milestone scheduled forcompletion in January should be reported as having a targeted completion date in thefiscal second quarter – not the MIC third quarter.Since the preparation of the DON Statement of Assurance occurs during the fourthquarter of the fiscal year, it is strongly advised to not assign milestones in the fourthquarter: July - September. It is difficult to accurately report on and update fourth quartermilestones once the preparation of the DON Statement of Assurance begins.Therefore, if a milestone is scheduled to be completed on 1 August 2008, identify thetargeted completion date of the milestone as the first quarter of 2009. This will allowadequate time to confirm completion of the milestone and to report completion up thechain of command.Determining MaterialityMateriality is a management judgment. It is difficult to apply a strict formula or test todetermine whether something is or is not material. There are, however, importantquestions that can be asked to help management determine if an issue is a materialweakness.1. Is the issue control-related?Consider whether the issue is related to internal controls. If a control deficiency hasbeen identified through the risk assessment process, this will be clear. If, however, theissue was identified through other sources such as the media or an audit, it may not beclear. Not all problems are control-related; there could be a significant exposure to riskand/or a potential for loss of significant financial resources that result from informedmanagement decisions, not from a control deficiency. Management may determine topursue a certain strategy or policy that is inherently risky. The mere exposure to riskdoes not automatically dictate that there is a control deficiency. For example, resourcelimitations may prevent an organization from achieving its mission, but unless it is theresult of a control deficiency, it should not be included in the SOA. Issues must becontrol-related to be included in a MIC Certification Statement and/or the DONStatement of Assurance. Other issues should be addressed elsewhere (i.e. budgetprocess, responses to audit recommendations, direct briefs to the Secretary,NAVINSGEN risk/opportunity data call, etc.).2. Does the issue meet any of the general criteria for materiality (Threat toMission, Threat to Resources, or Threat to Image)?21