FY2017-2019 STRATEGIC BUSINESS PLAN - mecknc.gov Business... · • The demand for strong...

Mecklenburg County, North Carolina

FY2017-2019 STRATEGIC BUSINESS PLAN

STRATEGIC BUSINESS PLAN

OUR

To be a catalyst for positive change in Mecklenburg County government.

OUR

To support key stakeholders to cultivate an environment of accountability, transparency, and good governance.

STRATEGIC BUSINESS PLAN: DEPARTMENT OF INTERNAL AUDIT

3 Mecklenburg County FY2017-2019 Strategic Business Plan

OUR ENVIRONMENT

Mecklenburg County Government

The environment in which the County serves its citizens is always in a state of flux. Impacts from population growth, the economy, technology, internal and external threats, and other factors, could have a sudden and significant impact on the organization.

Internal Audit tries to take a forward look at internal and external factors and trends that could prevent the County from successfully meeting its goals and objectives. By providing insight into potential threats and opportunities, Internal Audit can help management better manage their risks while reaping the rewards of opportunities taken.

Internal and External Factors

A critical aspect of Internal Audit’s success is recognizing and responding to changes in our environment that may directly and indirectly impact the provision of audit services.

Key environmental factors include:

• The demand for strong accountability, responsiveness, and accessibility of government to its citizens

• The insistence of effective governance, risk management, and internal controls to protect and most effectively use County resources

• Internal stakeholder expectations for efficient and effective internal audit services

• More effective use and retention of enterprise knowledge

• Increasing challenges with data retention and security

• Increasing complexity of information technology

• Workforce planning to maximize institutional knowledge and maintenance of organizational capability



OUR GOALS

Internal Audit provides an array of audit assurance and consulting services across all departments and all activities throughout the organization. This broad perspective on the organization’s governance, risk management, and control activities makes us a valuable resource to the Board and executive management in accomplishing the organization’s goals and objectives.

To successfully maximize the value of Internal Audit and accomplish the goal of delivering high-quality assurance and consulting services to effect positive change in the County’s governance, risk management, and control activities, Internal Audit will:

• Develop and execute an optimal annual audit plan • Deliver high quality audit services • Foster and cultivate meaningful relationships with customers and key

stakeholders • Support an organizational foundation of strong ethics, fraud awareness, and

internal controls • Continuously improve audit business and management processes • Develop a sustainable, highly skilled workforce capability

DIRECTOR’S MESSAGE

Internal Audit’s primary vision is to partner with management to effect positive change, helping management better mitigate their risks while reaping the rewards of opportunities taken. To be a valued partner, the Internal Audit team seeks opportunities to learn about and understand their business partners’ environment and the challenges they face, as well as taking a forward look at internal and external factors and trends that prevent the County from successfully meeting its goals and objectives. We seek creative ways to maximize the value and impact of available audit resources leveraging consulting activities and technology. We have an educated and motivated team of auditors dedicated to collaborating with management to improve the governance, risk management, and internal controls in Mecklenburg County.

Internal Audit can help management better manage their risks while they reap the rewards of opportunities taken.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities Objective 1: Develop and execute an optimal annual audit plan Strategy A Identify and provide the appropriate mix of assurance and consulting services

Actions ◊ 1. Identify county risk universe and risk factors employing tools, such as the annual risk assessment, annual control self-assessment survey, Enterprise Risk Management Committee participation, department meeting/other attendance

2. Conduct an annual environmental scan to identify and respond to changes in the County’s environment that directly and indirectly impact the provision of audit services

3. Understand the information technology (IT) risk environment 4. Understand and increase collaboration with other risk management functions 5. Using all risk information, develop and communicate the optimal annual audit plan

Performance Measures

◊ Develop and communicate optimal audit plan

Strategy B Expand the breadth and depth of audit coverage and assurance to the Board of County Commissioners and Executive Management.

Action ◊ 1. Develop and fully staff four audit focus teams by adding six additional staff over the three-year period. The focus teams are Information Technology/Data Analytics (IT/DA), Health and Human Services (HHS); Financial Services/Investigations (FIN/I); and General Audit (GEN)

Total associated costs: FY 2017 $ 59,862 (N) Human Capital Salary 9 months for one staff auditor (GEN) 44,862 $ 44,862 (N) Information Technology

1 laptop, monitor, keyboard, mouse 2,600 1 license/maintenance fees (AutoAudit, Web timesheets, Flowcharting, Snagit) 2,950

$ 5,550 (N)

Communications The IIA ad for new positions 500

$ 500 (N)

Assets/Facilities 1 desk, chair 5,750

$ 5,750 (N)

Other 1 training budget 2,500 1 set IIA chapter training slots (average 2 each) 300 1 set (average 2 each) professional dues 150 1 supplies 250

$ 3,200 (N)



Total associated costs: FY 2018

$ 25,000 (N)

Human Capital Increase two staff auditor positions to senior positions when appropriate 25,000

$ 25,000 (N)

Information Technology

$ 0 (N)

Communications $ 0 (N) Assets/Facilities $ 0 (N) Other $ 0 (N)

Total associated costs: FY 2019 $ 344,255 (N) Human Capital Salary 9 months for one IT auditor/data analyst (ITDA)

$58,905 Salary 9 months for four senior auditor (GEN, 2 HHS) $207,600

$ 266,505 (N)

Information Technology

5 laptops, monitors, keyboards, mouse $13,000 5 license/maintenance fees (AutoAudit, Web timesheets, Flowcharting, Snagit) 14,750

$ 27,750 (N)

Communications The IIA ads for new positions 1,000

$ 1,000 (N)

Assets/Facilities 5 desks, chairs $28,750

$ 28,750 (N)

Other 5 training budgets $16,000 5 set IIA chapter training slots (average 2 each) $1,500 5 sets (average 2 each) professional dues $1,500 5 supplies $1,250

$ 20,250 (N)


◊ Develop four audit focus teams

Comments 1) Additional staff provides: a. Ability for staff to build business acumen in focus areas to increase audit efficiency,

effectiveness, and audit value b. Increased frequency with which we can audit high and medium risk departments (See

Appendix A: Department Risk Rankings) c. Flexibility to respond to audit or investigation requests/needs not on the original annual

audit plan 2) New IT auditor/Data analyst expands Internal Audit’s capabilities to continuously assess risks and

better deploy IT audit resources. 3) Hiring experienced senior auditors can more effectively and efficiently lead solo and team audits,

also providing flexibility to carry out audit plan and respond to unplanned activities. 4) If possible to use FY2018 budget dollars for senior auditor to help retain one newly hired but very



experienced staff auditor and to replace any departing staff auditor with a senior auditor.

NOTE: Staff auditors typically do not have sufficient project lead experience so when acting as lead, they tend to go over budgeted hours, extending the audit completion date, and require more management oversight. Collectively, these barriers impact the ability to complete the annual audit plan and respond timely to unanticipated audit and investigation requests/needs. Also requires using existing resources covered by Internal Audit’s current budget; assumes Internal Audit will be able to use adjacent office space for new staff once Criminal Justice moves off fourth floor and only facility costs would be painting and furniture. Salaries, benefits, training budgets, software, professional dues, and software maintenance for additional staff are ongoing costs.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities (cont’d) Objective 2: Deliver high quality audit services Strategy Comply with The Institute of Internal Audit Professional Practices Framework Standards (Standards) Actions ◊ 1. Support and maintain the Quality Assurance and Improvement Program (QAIP) to review audit

activities and ensure compliance with The Institute of Internal Auditors International Professional Practices Framework Standards

2. Conduct a peer review every five years at a minimum

Total associated costs: FY 2018 $4,500 (N)

Other October 2017 Peer review group expenses (3 people) 4,500

$4,500 (N)

Performance Measure

◊ Achieve successful “conforms” rating on peer review conducted once every five years or less

Comments Performing audits in conformance with The IIA Standards ensures the quality, accuracy, and overall value of every audit. Peer review cost will repeat every five years, at a minimum, plus using existing resources covered by Internal Audit’s current budget.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities (cont’d) Objective 3: Foster and cultivate meaningful relationships with customers and other key stakeholders Strategy Understand evolving stakeholder needs and expectations of Internal Audit Actions ◊ 1. Increase effective communications between Internal Audit and key stakeholders

2. Educate the organization’s stakeholders about Internal Audit capabilities and potential services 3. Develop brand recognition for internal audit projects

Total associated costs: FY 2017-2019 $0 (N) Performance Measures

◊ Customer satisfaction rating

Comments By increasing communication and understanding of internal auditing and the internal audit function, we can improve trust, effective participation by key stakeholders, such as directors and upper management, and increased stakeholder satisfaction. By creating a brand appearance for all audit projects, we can help elevate presence of the function within the County. Costs to achieve objective uses existing resources covered by Internal Audit’s current budget.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities (cont’d) Objective 4: Support an organizational foundation of strong ethics, fraud awareness, and internal controls

Strategy Create and maintain countywide training and other activities to increase staff awareness and participation

Actions ◊ 1. Maintain annual countywide staff Fraud Awareness and Ethics training 2. Maintain the Fraud Hotline Program, including chairing the Intake Team meetings 3. Develop and provide Human Resources an electronic Fraud Hotline/Ethics brochure for new

employees. 4. Create and publish quarterly Tip of the Month for good governance, risk management, and internal

controls Total associated costs: FY 2018

$ 0 (N)

Communications Annual employee Fraud Awareness and Ethics training provided to MeckEdu every year

$ 0 (N)


◊ Percentage of employees that understand the indicators or red flags of fraud ◊ Percentage of employees aware of ethics resources ◊ Report fraud hotline activities at each regular Audit Review Committee regular meeting

Comments Creating and maintaining a strong tone at the top regarding ethics and zero tolerance for fraud, builds a stronger organization that not only protects its assets but makes it a better place for people to work. Ethics and fraud awareness training and adequate internal controls strengthened by audit recommendations contribute significantly to the tone at the top and internal controls. If desired, new interview costs to update Fraud Awareness training would be about $5,000 to cover interviewer’s costs.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities (cont’d) Objective 5: Continuously improve audit business and management processes Strategy A Seek out and embrace innovative approaches to meet current and future audit demands Actions ◊ 1. Leverage technology to increase audit activity where possible, i.e., Continuous Auditing and

Monitoring (CA/CM) and audit management software 2. Seek opportunities to provide consulting services in front of key operational and/or system changes

Actions ◊ 1. Maintain ACL licensing and maintenance for CA/CM Program. Cost increased in FY 2018 from $7,972 to $9,832.

Total associated costs: FY 2017-2019 $0 (N) Performance Measure

◊ Number of continuous monitoring/auditing scripts in use

Strategy B Maximize internal auditing resources through better planning and project management Actions ◊ evelop work breakdown structure for budgeting purposes

1. Continue to employ new and current project management approach to improve efficiency and timeliness of audit process

2. Develop and operationalize key performance indicators to measure performance 3. Obtain and implement optimal audit management software that allows in one package all audit

planning, budgeting, process, timekeeping, and reporting activities, as well as auditee response and survey tools

Total estimated associated costs: FY 2018 $ 120,000 (N) Information Technology

FY implementation depends on technology reserve approval and assignment

$120,000 (N) estimated project management software


◊ Average percentage increase to audit hours budgeted ◊ Percentage of audits completed within allotted audit hours as adjusted

Comments Annual ACL software and server maintenance fees increased from $7,972 to $9,832 and will be paid with current Internal Audit resources. An improved project management software system will add efficiency to the audit process, which should reduce audit hours. The additional project management and reporting capabilities should help maximize the use of current staffing resources and track performance. It will also provide the capability to “push/pull” audit reports with the expectation of decreased reporting time, and provide an internal survey tool for the Control Self-Assessment and Risk Assessment surveys and audit report responses. Implementation of new audit management software will need IT assistance; annual software maintenance cost unknown as product has yet to be selected so assumes use of current software maintenance costs, already into current budget; also uses existing resources covered by Internal Audit’s current budget.



GOAL 1: Deliver High-Quality Assurance and Consulting Services to Effect Positive Change in the County’s Governance, Risk Management, and Control Activities (cont’d) Objective 6: Develop a sustainable, highly skilled workforce capability Strategy A Promote building of staff’s knowledge, skills, abilities, and job satisfaction Actions ◊ 1. Provide relevant mentoring, training, and coaching to build staff knowledge, skills, abilities, and job

satisfaction 2. Identify and develop each staff and management person’s individual and department development

needs Performance Measures

Employee Motivation & Satisfaction Index

Strategy B Create and maintain a desired environment that promotes work/life balance Actions ◊ 2. Provide flexible work hours to meet both audit needs and auditor needs, i.e., flex Fridays and flexible

start times 3. Conduct team building activities to strengthen team bond and understanding, i.e., annual team

building event, quarterly birthday lunches, holiday parties 4. Provide recognition and merit awards and benefits for outstanding performance

Total associated costs: FY 2017-2019 $0 (N) Performance Measures

◊ Percentage of auditors meeting continuing education requirements

Comments Providing our auditors sufficient quality training provides leverage to attract and retain the same high quality, in-demand auditors that the banking and other private sector industries are trying to hire or lure away. It also provides a more effective auditor who brings real value to the organization through his or her audit activities. Cost to achieve objective uses existing resources covered by Internal Audit’s current budget and additional resources as requested in Objective 1 for new staff requests.



GOAL 2: Maintain Environmental Sustainability of Operations

Objective 1: Adhere to environmentally preferable purchasing (EPP) guidelines

Strategy Monitor department practices to ensure adherence to environmentally preferable purchasing (EPP) guidelines

Actions ◊

FY 2017 – FY 2019

• Identify a department representative to work with the County’s Sustainability Manager to track and meet the department’s environmental goalsEducate department employees on the importance of adhering to the County’s environmentally preferable purchasing (EPP) guidelines

• Enforce the department’s adherence to the County’s EPP guidelines by monitoring purchasing habits

• Embrace new and innovative opportunities for improving the environmental-friendliness of the department’s purchasing habits When making purchasing decisions, consider the full cost of the products—environmental, social, and economic

Total associated costs: FY 2017 – FY 2019 $0


◊ Environmentally Preferable Purchasing (EPP) – Paper Purchases

◊ Environmentally Preferable Purchasing (EPP) – Office Supplies

◊ Environmentally Preferable Purchasing (EPP) – Printer Cartridges

Comments Ricoh provides the paper and ink; we do not have input into the environmental status of the products



GOAL 2: Maintain Environmental Sustainability of Operations (cont’d) Objective 2: Provide employees with opportunities to learn about and practice environmentally-friendly activities (via the County’s Work Green program)

Strategy Support employee involvement in environmentally-friendly activities (via the County’s Work Green program)

Actions ◊

FY 2017-FY 2019

• Identify a department representative to work with the County’s Sustainability Manager to track and meet the department’s environmental goalsducate department employees on the importance of participating in the County’s Work Green program

• Educate department employees on opportunities to participate in the County’s Work Green program—via educational opportunities, i.e. Lunch & Learns, volunteer opportunities, alternative commuting, i.e. carpooling, mass-transit, walking, or cycling, and other unique employee engagement campaigns

• Enforce the department’s participation to the County’s Work Green program by consistently monitoring performance

Total associated costs: FY 2017 – FY 2019 $0

Performance Measure

◊ Employee Participation in County’s Work Green Program

Comments



Appendix A FY 2018 Enterprise Risk Ranking

Department Risk Score Risk Ranking Social Services 639.8 1 Financial Services 625.1 2 Sheriff's Office 613.7 3 Public Health 592.5 4 Information Technology 581.6 5 LUESA 573.7 6 Child Support Enforcement 534.1 7 Register of Deeds 515.6 8 Human Resources 512.5 9 Office of Tax Collector 511.1 10 County Manager's Office 504.6 11 Board of Elections 502.4 12 Criminal Justice Services 487.9 13 Office of the Tax Assessor 482.0 14 Economic Development 446.5 15 Community Support Services 436.6 16 Park and Recreation 434.7 17 Public Information 414.9 18 Behavioral Health 402.8 19 Medical Examiner's Office 397.8 20 Asset and Facility Management 374.3 21

High Risk

Moderate Risk Low Risk



Appendix B Audit Process

Director Initiates Audit

Director Sends Audit Notification Memo

Auditor Schedules Entrance

Conference

Conduct Extrance Conference

Conduct Preliminary Survey

Finalize Audit Objectives, Scope,

Procedures

Conduct Fieldwork A



A

Complete Workpapers

Develop Issues & Recommendations

(Recommendations based on risk)

Audit Manager Reviews Workpapers

Complete? Write Report / Index & Reference

Issue Report End

NO YES

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