G-1 Proposed Internal Audit Plan Presentation€¦ · APS Internal Audit Department Audit Committee...
Transcript of G-1 Proposed Internal Audit Plan Presentation€¦ · APS Internal Audit Department Audit Committee...
APS Internal Audit Department
Audit Committee Internal Audit Work Plan
Recommendation
October 3, 2019
John Mickevice
Presentation Overview
• Overview of Internal Audit at APS
• Criteria Used to Select Possible Projects
• Projects Selected per Risk Assessment
• Follow‐up on Prior Audits
2
Overview of APS Internal AuditWhat is Internal Audit?• Independent appraisal activity for the review of operations as a service to the administration or Board.
• Managerial control that functions by measuring and evaluating the effectiveness of other controls.
What is the purpose of Internal Audit?• Provide operational, financial, and compliance audit services to APS
• Advisor and resource to school leadership and School Board on policy, internal controls and best practices in fiscal and business operations
3
Overview of APS Internal Audit
Internal Audit reports to the Board through the Audit Committee.
Audit Plan is developed …• In Consultation with the Audit Committee;
• With Priorities based on–Risk Assessment– Input from School Board and Staff.
4
Criteria Used to Identify Possible Projects • Discussions with APS Directors and Supervisors:
– identify exposures that may exist for APS,– identify controls that may mitigate these exposures,– evaluate the risk
• 60 APS process areas identified– Each process area evaluated based on 5 factors:
• Quality and Stability of Control Environment• Business Exposure• Public and Political Sensitivity• Compliance Requirements• Data Processing and Management Reporting
5
Project Selection
• Process areas were ranked into three priority groups.
• Most areas fall in the medium risk group.
• Areas ranked low risk, while important to APS, do not warrant as close attention as the higher risk areas.
6
Internal Audit Project Recommendations
• New school construction costs: Follow‐up with APS staff on 5 cost reduction suggestions compared to potential cost savings and efficiencies.
• Identify potential efficiencies, cost savings and revenue opportunities, including resource deployment compared to planning factor allocations and overtime
• Evaluate employee expense reimbursement controls and compliance with approved policies.
• Assess level of compliance with each of the English Learner settlement agreement requirements.
7
New Construction Cost Efficiencies
APS Audit Committee requested that O’Connor Construction Management, Inc. identify opportunities for construction cost reduction throughout all phases of each project.
O’Connor offered 11 suggestions.
APS had already implemented 5 of these and is unable to implement one because of current VA procurement regulations.
8
New Construction Cost Efficiencies
APS Facilities & Operations ranked the remaining 5 suggestions for greatest potential for future savings: Benchmarking & Cost Modeling Developing a Risk Register Conducting Market Research & Market Studies Instituting a Pull Planning/Last Planner Process Explore alternative delivery methods
9
New Construction Cost Efficiencies
APS staff will analyze potential implementation costs of each of these recommendations compared to potential cost savings and efficiencies that might be gained.
10
Efficiency and Cost Saving Opportunities
• Identify areas for potential – increased efficiencies,
– future cost savings,
– revenue opportunities.
• Primary focus on resource deployment as compared to planning factor allocations.
11
Overtime Expenditures
• APS incurred $2.7 million in FY19 overtime.
• Analyze root causes and processes to approve and track overtime incurred.
• Coordinate as needed with time reporting improvement phase of the Data Project.
12
Expense Reimbursements
Review employee expense reimbursement controls and evaluate compliance with approved policies.
This will include oversight of:
Purchasing card transactions billed directly to APS; Reimbursements for items paid directly by employees;
Payments to individuals for approved employee benefits (scholarships, etc.).
13
DOJ Settlement Agreement Compliance
Department of Justice (DOJ) acknowledged in June 2019 that APS has already undertaken measures to address many issues of its English Learner (EL) programs and practices.
Sept. 2019 report on requested actions was prepared by the APS Office of English Leaners staff and submitted in advance of its due date.
14
DOJ Settlement Agreement Compliance
Internal Audit will work with APS staff to:• Review financial and EL staffing requirements and demands of settlement agreement.
• Review APS plan to comply with all requirements.• Assess ability to set‐up and track data needed to meet future reporting requirements.
15
Internal Audit Plan ApprovalNext Step isInternal Audit Plan Approval
Arlington School Board Action Item:• ARLINGTON PUBLIC SCHOOLS Policy D‐9 Internal Audit requires that “subsequent to (Audit) Committee approval, the (internal audit) plan shall be submitted to the School Board for final approval…”
16