Page 390 - Onboarding May 2017

Internal Control Plan

EXECUTIVE SUMMARY

This document presents the Internal Control Plan for Centralized Supply Chain Services, LLC
or CSCS or the Co-op. The purpose of the plan is to list the steps taken by CSCS personnel to
ensure: (1), business processes are conducted professionally and ethically; (2), assets and
information are properly safeguarded against improper use; (3), Members’ benefits and
values are protected and maximized. This plan is reviewed annually to ensure that internal
and system controls are kept up to date and in accord with state and federal laws and
regulations.

CSCS team members identified all business processes to aid in the development of this plan.
Business processes are defined as any transactions or activities performed that obtain
specific goals and objectives. These processes were then examined for proper internal
controls to ensure they are conducted in a way that mitigates inherent risks in the Co-op’s
business model. In addition, CSCS staff reviewed information systems (both internal and
external) that help establish a sound internal control plan. Finally, CSCS plans to formally
monitor and evaluate the adequacy of this plan on an annual basis after it is disseminated to
and approved by the Co-op’s Boards of Directors.

This plan consists of the following five components:

• Control Environment
• Risk Assessment
• Control Activities
• Monitoring
• Information and Communication

Centralized Supply Chain Services, LLC. Page 4