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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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The operations of VALIC are subject to a program of audit coverage performed by Internal Audit. The department
provides assurance to the VALIC Audit Committee as to the effectiveness of operating policies, plans, and
procedures. The functions and responsibilities of Internal Audit include assessing:
(1) the adequacy of operational and systems controls for timely processing of all transactions,
(2) the reliability and integrity of financial and management information,
(3) the effectiveness of the controls to safeguard Company assets, and
(4) fraud prevention and detection.
Formal reports of audit findings are prepared and submitted to Executive Management after each audit. Internal
Audit reports any significant deficiencies or material weaknesses identified during audits to the VALIC Audit
Committee on a quarterly basis.
The operations of VALIC are also subject to a program of annual monitoring with regard to SOX Compliance of
internal controls performed by the SOX Compliance Team. The team provides assurance to senior management
and the VALIC Audit Committee as to the operating effectiveness of key controls deemed to have a significant
financial impact. The testing is completed around operational controls and Information Technology for financially
significant systems. Deficiencies identified during testing are reported to senior management and the VALIC
Audit Committee.
The insurance department of the state of domicile primarily regulates the activities of life insurance companies.
The Texas Department of Insurance (the Department) periodically examines the operations of VALIC, as well as its
statutory financial statements, to determine compliance with the Department’s rules and regulations.
In addition, VALIC is subject to regulation and supervision by the insurance departments of the other states in
which it is licensed and the SEC. As such, VALIC is required to file periodic financial statements with the insurance
departments of such states and the SEC and is subject to periodic examinations. VALIC is also required to have an
annual audit of its statutory basis and generally accepted accounting principles (GAAP) basis financial statements
performed by an independent public accountant.
The variable products administered by VALIC are subject to regulatory oversight by the SEC. As a part of this
regulatory oversight for SEC-registered products, VALIC is required to file its GAAP basis financial statements with
the SEC.
III. Description of the VALIC Defined Contribution Plan Administration System