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Audit Report: OAS-L-08-03

December 11, 2007

The Department of Energy's Implementation of Revised OMB Circular No. A-123

The Office of Management and Budget's (OMB) revised Circular No. A-123 (A-123) requires Federal agencies to assess, document and test their internal controls over financial reporting and prepare an annual assurance statement on the operating effectiveness of those controls. The Department of Energy (Department), with approval from OMB, elected to use a three year phased approach to implement A-123. In Fiscal Year (FY) 2006, the first phase of its implementation, the Department focused on the highest risk activities with the
potential for the greatest impact on the financial statement audit.