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This report is intended for use by the management of the Variable Annuity Life Insurance Company ("VALIC") and its subsidiaries.
VALIC Retirement Services Company ("VRSCO") and VALIC Financial Advisors, Inc. ("VFA"), its user entities, and the independent
auditors of its user entities, and is not intended and should not be used by anyone other than these specified parties.
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VALIC
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Information and Communication
Information and communication systems support the identification, capture, and exchange of information in a
form and time frame that enable people to carry out their responsibilities. The information system consists of the
procedures, whether automated or manual, and records established to initiate, record, process, and report entity
transactions (as well as events and conditions) and to maintain accountability for the related assets, liabilities, and
equity. The quality of system-generated information affects management’s ability to make appropriate decisions in
controlling the entity’s activities and to prepare reliable financial reports. A high-level description of the information
system is provided in Overview of Operations and Services Provided – Description of Processing Environment.
Communication involves providing an understanding of individual roles and responsibilities pertaining to
internal control over financial reporting. Communication systems exist from the entity level to the department
level. Multiple communication paths exist to help verify whether processes function as designed and issues are
identified and resolved in a timely manner. These include voice mail, email, and regularly scheduled meetings
and teleconferences. A description of certain entity-level communication systems was provided above, under
Control Environment.
Specific aspects of the information and communication systems are provided in the General Computer Controls
description below.
Control Activities
Control activities are the policies and procedures that help verify that management directives are carried out.
They help verify that necessary actions are taken to address risks to achievement of the entity’s objectives.
Control activities, whether automated or manual, have various objectives and are applied at various
organizational and functional levels. Specific control activities are provided in the Control Environment
description above and in
Section IV. VALIC Control objectives, controls, and PricewaterhouseCoopers LLP’s
tests of operating effectiveness and results of tests below.
Monitoring
The management of VALIC monitors internal control performance as part of their activities. VALIC has
implemented a series of “key indicator” management reports that measure the results of various processes
involved in providing transaction processing to clients. Key indicator reports include weekly and/or monthly
reports that identify:
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Analysis of gross contributions year-to-date. This report compares actual versus plan and prior-year
contributions, capital transfers-in, and changes in unprocessed contributions from fixed and variable products.
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Total contributions received, applied, and unapplied contributions.
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Total surrenders and withdrawals, excluding systematic and minimum distribution withdrawals as a
percentage of deferred reserves. This report compares surrenders and withdrawals from current quarter
to prior year’s corresponding quarter. Quarter-to-date and year-to-date history is also included.
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Transaction activity and trends of benefit payments, correspondence and other financial transactions
compared to previous month/year transaction activity.
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Earnings from operations year-to-date, which is provided on a monthly basis and includes participant
surrender charges and participant administration fees. This report compares actual to plan and prior year.
III. Description of the VALIC Defined Contribution Plan Administration System