INTRODUCTION

INTERNAL ACCOUNTING CONTROL is a process that, under the responsibility of

the legal representative or top manager of the public accounting entity, as well as the
first-level managers responsible for the accounting areas, is carried out in public
entities and organizations, in order to achieve the existence and effectiveness of
control and verification procedures for the activities of the accounting process,
capable of reasonably guaranteeing that the financial, economic, social and
environmental information meets the characteristics of reliability, relevance and
understandability.

On the other hand, it can be considered that internal accounting control is the
application made in public entities and organizations of the Standard Model of
Internal Control to the Accounting Process, to establish the actions, policies, methods,
procedures and mechanisms of prevention, correction, evaluation and continuous
improvement of the Process, in order to guarantee that the financial, economic and
social information complies with the conceptual, technical and procedural standards
established in the General Plan of Public Accounting.

Law 87 of 1993 defines Internal Control as the system made up of the organizational
scheme and the set of plans, methods, principles, standards, procedures and
verification and evaluation mechanisms adopted by an entity, in order to ensure that
all activities, operations and actions, as well as the administration of information and
resources, are carried out in accordance with current Constitutional and legal
regulations, within the policies outlined by management and in accordance with the
planned goals and objectives.

Internal Accounting Control

CONCEPT

Application made in public entities and organizations, of the Standard Model of

Internal Control to the Accounting Process, to establish the actions, policies, methods,
procedures and mechanisms for prevention, correction, evaluation and continuous
improvement of the Process, with in order to guarantee that the financial, economic
and social information complies with the conceptual, technical and procedural
standards established in the General Plan of Public Accounting.

It is the process that, under the responsibility of the Legal Representative or top
manager of the public accounting entity, as well as the first-level managers
responsible for the accounting areas, is carried out in public entities and
organizations, in order to achieve the existence and effectiveness of the control and
verification procedures of the activities of the accounting process, capable of
reasonably guaranteeing that the financial, economic, social and environmental
information meets the characteristics of reliability, relevance and understandability.

Internal audit

Independent and objective assurance and consultation activity, designed to add value
and improve institutional operations; compels public entities to meet their objectives
by providing a systematic and disciplined approach to evaluate and improve the
effectiveness of risk management, control and governance processes. The Internal
Audit as an independent activity implies that it must be free of interference, when
determining the scope and performance of its work and communicating its results.

Objectivity in the exercise of Internal Auditing must be understood as an impartial

and neutral attitude, and avoiding conflicts of interest.

Evaluation of Internal Accounting Control

It is the measurement and evaluation of the Internal Control System in the accounting
process of an entity or organization, with the purpose of determining its quality, the
level of confidence that can be granted and whether its control activities are
effective, efficient and economical in the prevention and neutralization of the risk
inherent to accounting and financial management, carried out by the head of the
Internal Control Office or whoever takes his place.

Risk Management
Process designed to identify, analyze, assess and give adequate treatment to potential
events that may affect the accounting process, in order to provide reasonable
assurance regarding the fulfillment of institutional objectives, advanced by those
responsible for accounting information.

Accounting Risk

It is the probability that the financial, economic and social facts are not included in
the accounting process or, having been included, do not comply with the conceptual,
technical and procedural standards established in the PGCP.

INSTRUMENTAL MODEL OF PUBLIC ACCOUNTING.

It is made up of the General Catalog of Accounts, Descriptions and Dynamics and the
Procedures Manual, which are specific to the accounting process and are prepared
with the objective of instrumentalizing the theoretical strategy of the System. This
process includes the identification, classification, valuation and registration phases,
which, in accordance with technical standards, recognize and reveal economic, financial
and social facts.

NORMATIVITY

Internal Accounting Control, in public Entities and Organizations, is associated with

the existence and effectiveness of the control and verification mechanisms in the
activities of the accounting process, which guarantee that the financial, economic and
social information meets the requirements. which Chapter 5 of the General Public
Accounting Plan refers to, unambiguously revealing the economic and financial reality
of the results of the operations carried out; within which permanent verification and
evaluation must be carried out mainly in what has to do with the management of
resources, goods, systems and information so that all transactions are recorded
accurately, truthfully and in a timely manner in such a manner. that allows the
preparation of operational, administrative and financial reports as established in
Articles 3, literal 10 and 12 Law 87 of 1993.

Based on what is established and on article 12 of Law 87 of 1993, which determines

that the Internal Control Offices or whoever acts in their place must verify that the
Internal Control System is formally established, the Internal Control office
proceeded to evaluate the Internal Accounting Control System of the Honorable
House of Representatives.
Article 354 of the Political Constitution: There will be a General Accountant, an
official of the executive branch, who will keep the general accounting of the Nation
and will consolidate this with that of its decentralized entities territorially or by
services, whatever the order to which they belong, except regarding the execution of
the Budget, whose competence is attributed to the Comptroller's Office.

Law 298 of 1996: by which article 354 of the Political Constitution is developed, the
General Accounting Office of the Nation is created, as a Special Administrative Unit
attached to the Ministry of Finance and Public Credit and other provisions on the
matter are dictated.

Resolution Number 048 of 2004 (February 10): “By which provisions related to
Internal Accounting Control are issued”

MECI AND INTERNAL ACCOUNTING CONTROL

Internal accounting control must be implemented and evaluated within the framework
of the Standard Model of Internal Control for the Colombian State MECI 1000:2005,
adopted by Decree 1599 of May 20, 2005.

CONCEPTUAL FRAMEWORK OF PUBLIC ACCOUNTING

It is made up of the postulates, objectives, users, characteristics, requirements,

principles and technical standards.

a. Postulates : They constitute the basic assumptions that support the National
Public Accounting System - SNCP and allow defining its structure and
Orientation. They include those of Reliability and Social Utility.

b. Objectives : They constitute the expected results of the SNCP, which can be
classified according to the purposes pursued by users according to management,
control, culture, analysis and dissemination criteria.

c. Characteristics of the Information: Being Rational, Universal, Measurable and

Comparable constitute attributes inherent to the product coming from the
SNCP, giving it the identity and specificity that allows it to be differentiated
from other types of information.
 d. Information Requirements : Timeliness, objectivity, consistency, relevance,
verifiability and understandability correspond to the minimum conditions that
the information produced by public accounting must meet.

e. Principles: They constitute the basic guidelines that guide the information
generation process based on the objectives of the SNCP. Consequently, the
principles refer, among other aspects, to the quantitative and qualitative
techniques for assessing the facts; at the moment in which the accounting
record is made; to the way in which the facts should be revealed; to the
continuity of the public entity; to the essence of the transactions; and the
correlation between income, costs and expenses.

f. Technical Standards: They comprise the set of parameters and criteria that
specify and delimit the accounting process, they are aimed at exhaustively
reflecting the creation, transformation, exchange, transfer, extinction and, in
general, any change produced by economic, financial and social events.

GENERAL OBJECTIVES, ELEMENTS AND CHARACTERISTICS

OF THE INTERNAL ACCOUNTING CONTROL SYSTEM

For its development, the Internal Accounting Control System takes as its legal basis
the general objectives, elements and characteristics established in Articles 2, 3 and 4
of Law 87 of 1993; Article 4 of Law 298 of 1996 and other regulations that modify or
complement it. The objectives pursued by the Internal Accounting Control System are
strategic, operational and compliance.

GENERAL OBJECTIVES OF INTERNAL ACCOUNTING CONTROL

Guide those responsible for financial, economic, social and environmental

information in public entities, through Internal Accounting Control procedures so
that they carry out the necessary administrative procedures that lead to
guaranteeing the production of information with the characteristics of reliability,
relevance and understandability to referred to in the conceptual framework of
the General Public Accounting Plan.
 Protect assets, this is the custody of assets to ensure unauthorized use, as well
as illegal disposition of them.
Ensure correct and accurate accounting records: This is capturing and processing
data completely and accurately.
Promote operational efficiency.
Encourage compliance with policies.

SPECIFIC OBJECTIVES OF INTERNAL CONTROL

Authorization: Limits must be established at the beginning, continuation or

completion of an accounting operation based on established policies and
procedures.
Integrity: They ensure that all transactions are recorded in the period in which
they occur.
Of Existence : They ensure that only operations that affect the entity are
recorded.
Accuracy : Establishes that operations must be recorded at the value that is
actually derived from them.
Custody : They are established to try to control the unauthorized use or
disposition of assets.

STRATEGIC OBJECTIVES

1. Establish commitments or ethical protocols that guide the administrative

actions of the entity, in a consensual manner and with the participation of all
public servants in the Accounting Area.

2. Identify the Accounting process, within the Entity's Process Flow, defining its
objectives under the principles of economy, efficiency, effectiveness, speed and
publicity.

3. Manage the entity's accounting risks, identifying and evaluating them, in order
to preserve the reliability and usefulness of the information as a product of the
accounting process, thus achieving the financial, economic and social information
objectives planned by the entity.

OPERATIONAL OBJECTIVES
 1. Verify the operating policies for the development of the Accounting Function;
the design of the accounting process, its controls and prevention actions in
relation to accounting risks; and the existence of indicators that allow the
management and results of the entity to be permanently evaluated.

2. Guarantee the generation and dissemination of accounting information

necessary to meet the management, control, citizen culture and analysis
objectives.

3. Establish the necessary means that allow effective internal and external
communication of accounting information.

4. Carry out permanent evaluations of the execution of the accounting process and
its results, by the different levels of authority and responsibility related to the
Accounting Area, thereby guaranteeing recurring improvement actions.

5. Guarantee the performance of independent evaluations of Internal Accounting

Control in a timely and effective manner by the Internal Control Unit or Office
or whoever takes their place.

COMPLIANCE OBJECTIVES

1. Guarantee the operation of the accounting process based on the different

2. constitutional, legal and regulatory provisions that are specific to it.

3. Ensure the production of uniform accounting information for different users, in

accordance with their management, control, citizen culture, analysis and
dissemination objectives.

4. Ensure compliance with standards related to improving the quality of accounting

information, thereby seeking to establish an environment of sustainability of
the accounting process.
 PRINCIPLES OF INTERNAL ACCOUNTING CONTROL

They constitute the basic guidelines that guide the information generation process
based on the objectives of the National Public Accounting System. Consequently, the
principles refer to the quantitative and qualitative techniques for assessing the facts;
at the moment in which the accounting record is made; to the way in which the facts
should be revealed; to the continuity of the public entity; to the essence of the
transactions; and the correlation between income, costs and expenses. These
principles are:

EQUALITY
MORALITY
EFFICIENCY
ECONOMY
SPEED
IMPARTIALITY
ADVERTISING
ASSESSMENT OF ENVIRONMENTAL COSTS

PRINCIPLE OF EQUALITY: Public administration must follow constitutional principles

of freedom and equality of all people before the law. Consequently, Internal Control
must ensure that activities are oriented to the general interest, without privileging
special groups.

PRINCIPLE OF MORALITY: The actions of the public administration must act within
the clear rules of ethics that guarantee the neatness and transparency of the
administration, avoiding any act tending to corruption, dishonesty, waste,
embezzlement, irresponsibility and negligence in the actions of officials.

PRINCIPLE OF EFFICIENCY: Refers to the best possible use of available resources

by the state, in the actions it undertakes to achieve the planned objectives.

PRINCIPLE OF ECONOMY: Seeks to guide the entity towards policies of healthy

austerity and moderation in spending, hoping to reach an ideal balance for the
institution.

PRINCIPLE OF SPEED: Slow, unnecessary actions that hinder processes should be

avoided, making it difficult to achieve optimal results. The public administration must
carry out its activities with agility and must have the capacity to respond in a timely
manner to needs.

PRINCIPLE OF IMPARTIALITY: The public administration must have mechanisms so

that different activities are carried out impartially, removing criteria of
discrimination or inequality of opportunities vis-à-vis the state.

PRINCIPLE OF PUBLICITY: The purposes and results of the administration must be

communicated to the community, so that it can evaluate the quality of management of
its rulers, based on full, timely, real and precise knowledge of their actions.

PRINCIPLE OF ENVIRONMENTAL COSTS: It is the obligation of the state to

protect the environment and natural resources, guaranteeing that the community can
enjoy a healthy environment.

FUNDAMENTALS OF INTERNAL ACCOUNTING CONTROL

The Internal Accounting Control System of the public entity is based on Self-control,
Self-regulation and Self-management:

SELF-CONTROL : Capacity of each Public Servant to consider control as inherent

and intrinsic to their responsibilities, actions, decisions, tasks and performances.
Ability and competence of each official directly or indirectly related to the Public
Accounting System, whatever their level, to assume control as their own, validated
in the fact that this is an activity inherent to human beings that applied to the
public service. and the processes, activities, procedures and tasks under its
responsibility, must guarantee a transparent and effective function, in pursuit of
compliance with the management, analysis, dissemination and citizen culture
objectives that State entities seek in matters of Public Accounting. .

SELF-REGULATION : Capacity of the Public Entity to interrelate Self-Regulation

and Self-Control in order to establish the most effective way to execute its
administrative function. Institutional capacity that, in the exercise of
administrative and financial autonomy, and within the framework of the Political
Constitution and the laws, allows establishing its own rules oriented towards
financial and accounting action, executed with high levels of institutional
responsibility, in order to generate a information that complies with the
 Conceptual Framework and the Instrumental Model of Public Accounting, with a
clear orientation to meeting the objectives of management, control, citizen
culture, analysis and dissemination.

SELF-MANAGEMENT : Institutional capacity of the Public Entity to regulate

matters that are specific to its administrative function. Ability to integrate self-
control and self-regulation for the development of the Accounting Function, with
the institutional purpose of complying with the set of laws and regulations that
govern said Function, through effective communication, information, risk
determination and evaluation, generating In this way, the results allow us to
evaluate whether the efforts and resources of the public entity are aimed at
achieving its institutional and social objectives, as well as establish the
corresponding corrective measures.

STRUCTURE OF INTERNAL ACCOUNTING CONTROL

Within the framework of current legislation, Internal Accounting Control as part of

the Internal Control System requires the following structure for its implementation,
based on Subsystems, Components and Elements.

1. STRATEGIC CONTROL SUBSYSTEM

It establishes the bases so that Internal Accounting Control is a continuous practice

that guarantees the achievement of its objectives, in an efficient, effective and
economic manner, in the planning and direction of the entity's accounting action. The
Strategic Control Subsystem is composed of:

1.1. CONTROL ENVIRONMENT COMPONENT

1.1.1. Agreements, Commitments or Ethical Protocols
1.1.2. Human Talent Development
1.1.3. Direction Style

1.2. STRATEGIC DIRECTION COMPONENT

1.2.1. Plans and Programs
1.2.2. Operation Model
1.2.3. Organizational structure

1.3 RISK MANAGEMENT COMPONENT

1.3.1. Strategic Context
1.3.2. Risk Identification
1.3.3. Risk analysis
1.3.4. Risk Assessment
1.3.5. Risk Management Policies

2. MANAGEMENT CONTROL SUBSYSTEM

Its function is to allow adequate control over the entity's Accounting process, taking
into account the risk prevention actions and mechanisms and the indicators that allow
verification of obtaining the expected results. The Management Control Subsystem is
composed of:

2.1. CONTROL ACTIVITIES COMPONENT

2.1.1. Operation Policies
2.1.2. Processes
2.1.3. Controls
2.1.4. Indicators
2.1.5. Accounting Operation Manual

2.2. COMPONENT INFORMATION

2.2.1. Primary information
2.2.2. Secondary Information
2.2.3. Information systems

2.3. PUBLIC COMMUNICATION COMPONENT

2.3.1. Internal communication
2.3.2. External Communication
2.3.3. Media

3 . MANAGEMENT EVALUATION SUBSYSTEM

It allows the continuous evaluation of the plans, programs, processes, activities and
registration of the entity's operations, enabling the measurement of accounting
management. The Management Evaluation Subsystem is composed of:

3.1. SELF-ASSESSMENT COMPONENT

3.1.1. Self-assessment of Internal Accounting Control
3.1.2. Self-assessment of Accounting Management

3.2. INDEPENDENT EVALUATION COMPONENT

3.2.1. Evaluation of Internal Accounting Control
3.2.2. Internal audit

3.3. COMPONENT IMPROVEMENT PLANS

3.3.1. Institutional Accounting Improvement Plans
3.3.2. Improvement Plan for the Accounting and Financial Area
3.3.3. Individual Improvement Plans

The development of the previous structure will be carried out in accordance with the
provisions of Article 18 of this Resolution.

RESPONSIBLE FOR INTERNAL ACCOUNTING CONTROL

LEGAL REPRESENTATIVES OR CORRESPONDING TOP MANAGER

They are responsible for the establishment and implementation of the Internal
Accounting Control, dictating the policies that guarantee its implementation in the
terms established in this Resolution.

THE DIRECTOR OR HEAD OF THE FINANCIAL AREA, SECRETARY OF

THE TREASURY, GENERAL ACCOUNTANT OR WHOEVER DOES THEIR
TIMES

They are responsible for the implementation of Internal Accounting Control

associated with the processes under their responsibility, as well as in the entity's
Financial Information System.

PUBLIC SERVANTS IN THE ACCOUNTING AREA

Public servants, responsible for the activities of the accounting process, as provided in
Literal e) of Article 5 of Decree 2145 of 1999 and the regulations that modify or
complement it, have the obligation to carry out each and every one of their actions
taking into account the concepts of self-control and self-evaluation.
 THE COORDINATION COMMITTEE OF THE INTERNAL CONTROL
SYSTEM

Under the terms of Literal d) of Article 5 of Decree 2145 of 1999 and the regulations
that modify or complement it, it will be responsible as a body
coordination and advice, the design of strategies and policies aimed at strengthening
the Institutional Accounting Control System.

THE INTERNAL CONTROL OFFICE OR WHOEVER DOES THEIR TIMES

It is responsible for independently and objectively evaluating Internal Accounting

Control. As well as for the development of the Internal Audit function with scope over
the accounting process and its responsible areas, informing through assurance and
consultation activities, the legal representative of the entity, about the measures that
allow the continuous improvement of the System.
In addition to the functions contemplated in current regulations, and in relation to the
Internal Accounting Control System, the Internal Control Unit or Office or whoever
takes its place, will carry out the following:

1. Identify and design the processes necessary to execute the basic functions of
independent and objective evaluation of Internal Accounting Control.
2. Design and implement comprehensive methods and procedures for evaluating
Internal Accounting Control.
3. Verify the relevance of the design of the accounting process, its interrelation
with other processes, including financial processes, its activities, procedures,
controls and indicators and its contribution to the effectiveness of the Public
Accounting System.
4. Determine the level of compliance with laws, regulations, policies, plans and
programs, associated with the accounting process.
5. Measure and evaluate the efficiency, effectiveness and economy of the controls
associated with the phases of the accounting process,
6. Present conclusions and recommendations on the state of the Internal
Accounting Control System to those responsible.
7. Promote the preparation and execution of Improvement Plans in relation to
Internal Accounting Control, and monitor them.
8. Present the evaluation reports of Internal Accounting Control to the legal
representative of the entity, in a timely manner.
9. Advise the management of the entity on the improvement of the activities of
the accounting process, on risk management, and on the generation of value.
 INDEPENDENT AND OBJECTIVE EVALUATION OF INTERNAL
ACCOUNTING CONTROL

It is the practice free of interference in determining the scope of the evaluation, the
performance of its work and the communication of the results; as well as, the impartial
and neutral attitude, avoiding conflict of interest, in the evaluation of the accounting
process, the effectiveness of its controls and the level of compliance with the
objectives of the Public Accounting System.

EVALUATION TOOLS

To carry out the evaluation of the Internal Accounting Control and the Internal Audit
function, the Internal Control Unit or Office or whoever takes its place, will use
different methodologies and evaluation tools, in accordance with the characteristics
of the entity that allow for evaluation. the different subsystems, components and
elements of the Internal Accounting Control structure; as well as the Generally
Accepted Internal Audit standards, management indicators and other tools that
contribute to the measurement, evaluation, recommendation and preparation of
Improvement Plans for the accounting process.

PREPARATION AND PRESENTATION OF REPORTS

The Internal Control Unit or Office or whoever acts in its place, will prepare and
present to the corresponding authorities and within the indicated deadlines, the
reports referred to in Law 87 of 1993, Decree 2145 of 1999 and Resolution 250 of
2003 of the General Accounting of the Nation, or the regulations that modify,
complement or replace them.

APPLICATION OF RECOMMENDATIONS AND CORRECTIVES

The public servants mentioned in Chapter Three of this Resolution will be responsible
for the application of the recommendations and corrective measures resulting from
the permanent evaluations of the Internal Accounting Control and the Internal Audit
carried out by the Office of Internal Control.
 PUBLIC ACCOUNTING PROCESS

Ordered set of stages that take shape in the recognition and disclosure of financial,
economic, social and environmental transactions, events and operations that affect the
situation, activity and ability to provide services or generate resource flows of a
company. public accounting entity in particular.

It constitutes the set of policies adopted by an entity to safeguard its resources

against waste, fraud and insufficiencies, verify the accuracy and reliability of the
financial information system, encourage and measure compliance with the
organization's policies and promote the efficiency of its operations.

DEFINITION OF ACCOUNTING PROCESS

The accounting process is a set of activities that includes from the moment the
financial, economic or social fact is generated, until the moment the accounting
information is obtained, analyzed, interpreted and communicated.

The identification of the different activities of the accounting process, as well as the
risks and controls associated with each of them, constitutes a first-order
administrative action for the purposes of guaranteeing the sustainability of accounting
systems.

Understanding RISK as the different eventualities that can occur within any process,
it represents the possibility of occurrence of events, both internal and external, that
have the probability of affecting or preventing the achievement of quality in
accounting information with the characteristics of reliability, relevance. and
understandability. This is how in the accounting there are situations that put the
quality of the accounting information at risk and are associated with each activity
developed within it, for this the risks that are evident in each stage or activity and as
a consequence of the above must be evaluated. CONTROLS associated with said
process must be implemented, which are all the measures implemented by the public
entity, in order to solve the indicated situations, they are Actions or mechanisms
defined to prevent or reduce the impact of events that put the proper execution at
risk. of the activities and tasks required to achieve the objectives of an entity's
accounting processes. and, consequently, obtain reasonable financial statements and
reports.
The existence and effectiveness of controls for the accounting process and the public
accounting system, in accordance with the complexity of the entities, must consider,
at a minimum, the following specific aspects in each of the activities of the accounting
process.

Due to the above, each of the activities is defined immediately and the different
situations that compromise reasonableness and the controls that correspond to it are
subsequently pointed out, in general terms.

Based on these generalities, and in accordance with the particularities of the

different accounting systems derived from the very nature of public entities, the
situations to which they are subject must be specifically identified, and then, based on
these, controls can be established. that solve or minimize the identified problems.
For these purposes, and in accordance with the standard internal control model
regulated by Decree 1599 of 2005, public entities must carry out a study that
includes the assessment of risks, as well as the respective policies that lead to their
administration. effective.

INTERNAL ACCOUNTING CONTROL PROCEDURES

1. Permanent and sustainable accounting purification.

2. Manuals of accounting policies, procedures and functions.
3. Record of all operations.
4. Individualization of assets, rights and obligations.
5. Recognition of valuation accounts.
6. Update values.
7. Documentary supports.
8. Information reconciliations.
9. Accounting books.
10. Structure of the accounting area and process management.
11. Accounting sustainability technical committee.
12. Responsibility of accountants who add information.
13. Permanent and continuous updating.
14. Responsibility for the continuity of the accounting process.
15. Efficiency of information systems.
16. Balance sheet.
17. Preparation of statements, reports and reports.
18. Analysis, interpretation and communication of information.
19. Coordination between the different departments: - Responsibility of those who
execute processes other than the accounting one. - Systemic vision of
accounting and institutional commitment.
STAGES AND ACTIVITIES OF THE ACCOUNTING
PROCESS
 CONTROLS IN THE ACCOUNTING PROCESS

ACTIVITY CONTROLS

ID Adopt a policy through which all economic, financial and social events
carried out in any department of the public entity are duly reported to
the accounting area through the source documents or support of the
operations, so that they are channeled in the accounting process.

Develop work plans and implement specific procedures that allow the
efficiency of information flows from the information provider
processes to the accounting process, in a timely manner.

Implement administrative procedures that are effective, to establish

the responsibility for recording the collections generated, the
authorization of the supports by competent officials, management of
petty cash or revolving funds and their respective periodic cash counts.
Lack or lack of suitability of the supporting document.

ACTIVITY CONTROLS

CLASSIFICATIO Establish the existence of reconciliations of Cash and Investment

N balances, between the areas of Budget, Accounting, Treasury, and
other areas of the entity, simultaneously examining response times
and timeliness in the delivery of information.

Establish the existence and effectiveness of measures for the

periodic physical taking of inventories, and reconciliation of balances
with accounting records.

Determine the existence and functionality of procedures for the

preparation, review and timely purification of bank reconciliations,
which implies control over the opening and operation of bank and/or
savings accounts.
 ACTIVITY CONTROLS

REGISTRATION AND Check the existence of the Accounting Books, duly

SETTINGS
registered as established by the General Public Accounting
Plan.

Check the suitability, existence, organization and archiving

of the documentary supports.

Check the timely causation and correct registration of all

operations carried out by the public entity.

Implement a system that allows you to periodically verify

the preparation and calculation of the necessary
adjustments to reasonably disclose accounting information,
especially those related to depreciation, provisions and
amortization, among others.

ACTIVITY CONTROLS

PREPARATION AND Check that the information revealed in the financial

PRESENTATION OF statements corresponds with that recorded in the
FINANCIAL accounting books regulated in the General Public
STATEMENTS AND Accounting Plan.
OTHER
ACCOUNTING Establish policies so that accounting information is
REPORTS provided in a timely manner to the entity's administration,
to the General Accounting Office of the Nation, and to
the inspection, surveillance and control organizations.

Establish procedures that guarantee an adequate flow of

documents through the entities of the entity, in such a
way that allows the timely generation of accounting books
and accounting information.

Display, in a visible place, the accounting information

prepared so that it can be easily consulted by citizens and
other users.
 ACTIVITIES CONTROLS

ANALYSIS, Verify that the accounting information provided to the administration is

INTERPRETATION accompanied by an adequate analysis and interpretation, supported by
AND calculations of management and financial indicators, useful to show the
COMMUNICATION financial, economic and social reality of the public entity.
OF INFORMATION
Build the indicators and other relevant financial ratios, in order to carry
out the corresponding analysis, to adequately report on the situation,
results and trends.

Establish as an institutional policy the timely presentation of properly

analyzed accounting information.

ACCOUNTING PROCESS ACTIVITIES

In the structural determination of the financial and accounting processes, the

activities of the accounting office must be taken into account, which have a logical and
sequential order as follows:

1. IDENTIFICATION:
Stage where the occurrence of events or transactions that affect the financial,
economic and social structure is determined, therefore it must be subject to
accounting. This activity seeks to evaluate that all economic facts are known and
recognized by the accounting office for their timely classification and registration.

RISKS
In this activity, the following risks that are inherent within the process can be
detected:

a. Lack or lack of suitability of the supporting document

b. Inadequate description of the fact in the source document
c. Ignorance of the rules that govern public administration
d. Inadequate interpretation of the economic fact carried out.
e. Inability to associate the economic event carried out with the standards contained
in the PGCP.
f. Economic fact not considered in the PGCP and not defined in public accounting
doctrine.
g. Events carried out that have not been channeled through the accounting process.

CONTROLS
In this activity the following controls must be adopted:

a. Adopt a policy through which all economic, financial and social events carried out in
any department of the public entity are duly reported to the accounting area
through the source documents or support of the operations, so that they are
channeled in the accounting process.
b. Prepare work plans, and implement specific procedures, that allow the efficiency of
information flows from the information provider processes to the accounting
process, in a timely manner.
c. Implement administrative procedures that are effective to establish the
responsibility for recording the collections generated, the authorization of the
supports by competent officials, management of petty cash or revolving funds and
their respective periodic cash counts.
d. Adopt policies related to the incorporation of movable and immovable property into
the entity's assets, including their legalization and updated valuation.
e. Verify the incorporation of the entity's obligations, mainly those related to labor
liabilities, which include the recognition of pensions and pension contributions.
f. Implement the training system that provides sufficient knowledge to accounting
officials for adequate identification of the economic, financial and social events
carried out.

2. CLASSIFICATION
In this stage, the characteristics of the operation carried out by the Corporation are
determined, and the location within the general catalog of accounts is determined,
according to its nature. In this activity, it must be evaluated that the financial,
economic and social fact to be recorded complies with all the elements that are
specific to the account in which it is classified.

RISKS
a. Inadequate association between the conceptual framework and the CGC, due to lack
of coherence and systematicity, for the fact carried out.
b. Non-existent accounts to classify the event carried out
c. Use of accounts that have the purpose of recording events other than those
carried out.
d. Lack of clarity of descriptions and dynamics.
e. Inability to associate the act carried out with the CGC.

CONTROLS
At this stage the following policies must be implemented:

a. The existence of reconciliations of available balances and investments must be

established between the areas of budget, accounting, payment and other areas of
the entity involved in the accounting process, simultaneously examining response
times and timeliness in the delivery of information.
b. Establish the existence and effectiveness of measures for the periodic physical
taking of inventories, and reconciliation of balances with accounting records.
c. Determine the existence and functionality of procedures for the preparation,
review and timely purification of bank reconciliations, which imply control over the
opening and operation of bank and/or savings accounts.
d. Implement permanent policies related to income purification processes, accounts
receivable, and other assets, in such a way that allows establishing real balances
and an adequate accounting classification.
e. Evaluate, in accordance with the requirements established by the General
Accounting Office of the Nation, the process carried out by the entity's
accounting area, to achieve the reconciliation of reciprocal balances with the
entities, which includes the confirmation of balances through periodic
circularizations between the entities subject to conciliation.
f. Make periodic reviews of the consistency of balances revealed by the different
accounts, to determine their appropriate accounting classification.

3. REGISTRATION AND SETTINGS

Activity in which accounting vouchers are prepared and records are made, which are
made directly in the accounting software that is currently being used in which the
Budget, Payment, Warehouse and Accounting information is consolidated. It also
corresponds to the verification of the information produced in each department
involved in the accounting process, to verify its consistency and reliability, prior to
disclosure in the financial statements, to determine the figures subject to
adjustments and reclassifications.

RISKS
a. Imputation to a different account or code.
b. Accounting record not loaded or accumulated in accounting.
c. Events that occurred without accounting records.
d. Inadequate interfaces of the component subsystems of the integrated financial
information system.
e. Incomplete accounting record.
f. Miscalculation of adjustments related to valuation or non-transactional accounts.
g. Adjustments made to accounts without including the records in the accounting.

CONTROLS
a. Check the existence of accounting books, duly recorded as established by the
general public accounting plan.
b. Check the suitability, existence, organization and archiving of the documentary
supports.
c. Check the timely causation and correct registration of all operations carried out by
the entity.
d. Implement a system that allows periodically verifying the preparation and
calculation of the adjustments that are necessary, to reasonably reveal the
accounting information, especially those related to depreciation, amortization and
provisions, among others.
e. Verify that the data recorded in the accounting books correspond with the
information contained in the vouchers and other supporting documents.

4. PREPARATION, DISCLOSURE AND PRESENTATION OF FINANCIAL

STATEMENTS AND OTHER REPORTS
It is the result of the accounting process, expressed in the design and timely delivery
of accounting statements and reports, which must contain the additional basic
discrimination that is necessary for an adequate quantitative and qualitative
interpretation of the facts carried out. Likewise, they must allow users to build
monitoring and evaluation indicators, according to their needs.

This activity determines its structure, classification of items according to their

availability and enforceability, in accordance with the technical standards provided for
in the general public accounting plan put into effect as of January 1, 2007 through
resolution 555 of 2006 issued by the CGN, and the financial and accounting
information policies established for each public entity in particular. Book balances
must be verified against the financial statements and reports produced. Likewise, for
a better interpretation and understanding of the information, the situations that
deserve to be explained must be determined through the notes to the financial
statements, which are made for each quarter that is reported to the General
Accounting Office of the Nation, which are of general and specific character.

RISKS
a. Financial statements without support in the accounting books.
b. Information from the financial statements that does not match the accounting
books.
c. Inadequate functioning of the program used to process the information.
d. No generation of financial statements.
e. Untimely generation and presentation of financial statements to the mayor and
other users.
f. Revelation of reports that do not correspond to the records made.

CONTROLS
a. Check that the information revealed in the financial statements corresponds to
that recorded in the accounting books regulated in the general public accounting
plan.
b. Establish policies so that accounting information is provided in a timely manner to
the administration of the Corporation, to the General Accounting Office of the
Nation and to the inspection, surveillance and control organizations.
c. Establish procedures that guarantee an adequate flow of documents through the
Corporation's offices, in such a way. That allows the timely generation of
accounting books and accounting information.
d. Display the prepared accounting information in a visible place so that it can be
easily consulted by citizens and other users.
e. Check that the accounting information has been provided to users in complete form
and in accordance with the standards that regulate said requirements.

5. ANALYSIS, INTERPRETATION AND COMMUNICATION OF INFORMATION:

It corresponds to the reading made of the financial statements and other
complementary reports, with the purpose of concluding on the situation, results and
trends of public entities, from the financial, economic and social perspectives, in such
a way that their communication is sufficiently useful to support decisions related to
the administration of public resources.
For the analysis and interpretation of the information, the calculation of indicators
that reveal situations and trends will be essential, for which analysis techniques or
methods may be used according to the characteristics of each public entity.

RISKS:
a. Inopportune rendering of accounts to the CGN and inspection, surveillance and
control organizations.
b. Incomplete rendering of accounting information.
c. Inadequate presentation or non-presentation of notes to the financial statements.
d. Non-disclosure of accounts to the community.
e. Inconsistent disclosure of accounts according to technically recognized algebraic
tables.
f. Improper analysis and interpretation of information.
g. Inadequate design of indicators to show the reality of the Corporation.
h. Inadequate communication of the accounting message.
i. Preparation of information only for the purposes of reporting to the CGN and
inspection, surveillance and control organizations.

CONTROLS
a. Verify that the accounting information provided to the administration is
accompanied by an adequate analysis and interpretation, supported by calculations
of management and financial indicators, useful to show the financial, economic and
social reality of the Corporation.
b. Build the indicators and other relevant financial ratios, in order to carry out the
corresponding analysis, to adequately report on the situation, results and trends.
c. Establish as an institutional policy the timely presentation of properly analyzed
accounting information.

CONCLUSIONS
Internal Accounting Control is important since it constitutes the basis or support on
which the reliability of an accounting system rests. Its degree of strength will
determine whether there is reasonable assurance that the operations reflected in the
financial statements are reliable. It is not limited only to the reliability in the
manifestation of the figures reflected in the financial statements, but also evaluates
the level of operational efficiency in the accounting processes. It is aimed at
preventing or detecting irregularities.

For an Internal Control System to work, administrative and accounting methods and
procedures must be designed to guarantee its effectiveness and efficiency, as well as
devices, measures such as the establishment of clear lines of responsibility and
routine procedures to process each type of transaction.

CHARACTERISTICS OF INTERNAL ACCOUNTING CONTROL

It must include a flexible, simple organizational plan where lines of authority

and responsibility are clearly defined.

It must contain an authorization system that contemplates action on assets,

liabilities, income and expenses by controlling operations through the registry.

Healthy practices establishing a distribution of obligations and responsibilities,

preventing a single person from managing an operation from start to finish, and
a segregation of functions that covers both people and departments, extending
throughout the organization and all levels of command .

PROTECTIVE MEASURES THAT SHOULD PROVIDE THE INTERNAL CONTROL

TO THE ACCOUNTING SYSTEM

That all operations are recorded correctly in the accounting books.

That all operations to be carried out have the approval of authorized persons.

That the operations are carried out by authorized persons.

That the original accounting or registration be reviewed by a person other than

the person who made the registration

That account balances are correctly calculated and confirmed from time to time
by physical counting and third-party confirmation.
That the necessary controls be established in order to consistently maintain
mathematical accuracy: through special columns, control accounts, etc.

That the monetary amounts corresponding to costs, purchase prices, discounts,

etc. are calculated and verified.

That the assets are in the custody of people

Responsible and that there is strict physical control against theft.

That the person or persons in charge of the assets are independent of the
people who exercise custody and physical control.

That all transfers of assets to third parties and their accounting are carried
out with the approval of authorized persons.

That all operations are correctly recorded both in vouchers, invoices, and in
accounting books in the account and in the correct amount.