CMS Pub. 100-06, ch. 7, § 10.2.1

Internal controls are the checks and balances that ensure that operational objectives are carried out as

planned in the most effective and efficient manner possible. We should not look upon these controls as

separate specialized systems, but as integral parts of each system that management uses to accomplish the

objectives of the Medicare program. In this regard internal controls are not just financial tools that safeguard

assets, but are tools that are of vital importance to day-to-day programmatic and administrative operations as

well. Internal control should be the first thought in CMS' oversight process. That is, can we be sure that

there are adequate internal controls in place and operating effectively for the process we are evaluating?

Internal controls are an integral part of an organization's management to provide reasonable assurance that

the following objectives are being achieved:

• Effectiveness and efficiency of operations;

• Reliability of reporting; and

• Compliance with applicable laws and regulations

Internal control also serves as the first line of defense in safeguarding assets and preventing and detecting

errors and fraud. In short, internal control, which is synonymous with management control, helps program

managers achieve desired results through effective stewardship of resources.

End Section 10.2.1 – Definition and Objectives: Back to Table of Contents