Wyoming Department of Transportation Internal Review Services 2013 Work Plan

Transcription

1 Wyoming Department of Transportation Internal Review Services 2013 Work Plan 1 P a g e

2 Background Internal Review Services (IR) is a staff function that reports directly to WYDOT s Director. This ensures the independence of the internal audit function and allows for agency-wide access. While primarily working at the request of the Director and Executive Staff, Internal Review is available to assist all WYDOT programs by auditing systems, reviewing and evaluating operations, conducting quantitative and qualitative analysis, and providing various other forms of support by request or on an as needed basis. IR came into existence in response to a mandate in Federal regulations that required State Highway Agencies maintain an internal audit function. While enacting regulations have been modified, WYDOT s primary source of federal funding, the Federal Highway Administration (FHWA) along with other federal agencies, remain strongly behind the continued presence of such internal audit groups as they provide a valuable internal control and allow for the performance of various types of audits required to receive federal funding. Purpose IR s purpose is to provide critical information to decision makers, to mitigate risk and ensure compliance and good stewardship of resources. IR accomplishes this purpose through two major roles. First is the audit role in which IR provides a wide variety of financial, compliance, and performance audits/reviews. Second is the informational resource role in which IR provides consultant services in research, analysis, training, recommendations and other assistance as requested by Executive Staff and Program Managers. Goals 1. Improve processes for both WYDOT and Internal Review. 2. Increase our visibility within WYDOT. 3. Provide customer service. 4. Be good stewards of our resources. 5. Develop our staff. 6. Ensure federal and state compliance within WYDOT. Projects IR s work plan for fiscal year 2013 includes standard required audits as well as pro-active reviews and analysis to assist WYDOT in accomplishing its mission to provide a safe, high quality, and efficient transportation system. IR s projects include the following (see below for brief explanation of each): Annual Projects OMB Circular A-133 Compliance Audit Subrecipient (LPA) Monitoring Consultant Audits (Overhead and Project) Indirect Cost Rate Plan (ICAP) and Payroll, Equipment and Traffic Striping Rates Cash Drawer Audits WTDEA Relief Fund Audit 2 P a g e

3 Projects Continued from FY 2012 Highway Patrol Evidence Inventory Process & Audits Wyoming State Parks Review Documentation of Internal Controls General Disbursement Audit Program Development & Testing Payroll Audit Program Development & Testing FY 2013 Projects for Consideration Driver Services Application Review Process & Documentation Highway Patrol Grants Process, Documentation & Cross Training Motorcycle Safety Deposits Audit Cost Analysis (Chip Seals, Asphalt Patching, Sand Usage vs. Mag Chloride, WYOLINK, Shop Efficiency and Overtime and Comp Time) IT Consolidation Process Review and Documentation Training LPA Certification Training Change Fund Policy Training New Supervisor Orientation Administrative Projects BSC (update & record accomplishments) Participation in AASHTO & WASHTO CPE Update IR Manual Annual Projects: 1. OMB Circular A-133 Audit (compliance section): this annual audit is required of all government agencies who expend more than $500,000 in federal funds. Federal agencies use this report to determine if WYDOT is in compliance with federal regulations. An external CPA firm is contracted to perform the financial section of the audit and works closely with and relies on IR s work. 1. Subrecipient(Local Public Agency, LPA) Monitoring: this is an area that has been designated as a number one priority by WYDOT and FHWA. This project is two-fold and consists of LPA project reviews as well as a review of LPA OMB Circular A-133 audits. IR will develop a risk assessment to include all pass-through funds (state and federal) in order assess which LPAs need to be reviewed. IR will also develop an audit program to include tests of internal controls, state statutes, WYDOT policy and federal compliance requirements, if applicable. In order to meet the requirements of OMB Circular A-133, IR will continue to receiving certification from all subrecipients of Federal funds that they have received the appropriate A-133 audit and whether there were 3 P a g e

4 findings related to WYDOT funding. If subrecipients have findings related to WYDOT funding, IR receives a copy of their audit report and corrective action plan. Both the report and the corrective action plan are reviewed for compliance and IR submits a Management Letter to the LPA and reports to the appropriate WYDOT Grant Administrator so they can conduct additional monitoring as necessary. 2. Consultant Audits: these audits consist of overhead audits, cognizant audits, billing rate reviews and project audits. IR conducts these audits to ensure consultants designing and administering construction projects are in compliance with federal and state regulations. IR is also required to conduct consultant audits for LPAs receiving federal funds from WYDOT. IR has developed a risk assessment to assist in determining when audits are required and the type of audits that will be conducted. This risk assessment has been approved by FHWA. For FY 2013, IR has been requested to conducted additional analysis while conducting project audits. This analysis will include percentage of work done versus project costs, expenditure time line, man hours anticipated versus actual, and under billed analysis. IR works closely with Engineering Services to accomplish this audit function. IR also attends two American Council of Engineering Companies (ACEC) meetings each year to update consultants on new regulations and policies and to answer any questions they may have regarding their audits. 3. Indirect Cost Rate Plan (ICAP) and Payroll Loading, Equipment and Traffic Striping Rate Audits: WYDOT s ICAP was audited and put into effective October 1, September 30, 2013, therefore the ICAP will not need to be reviewed by IR this year. However, IR will continue to audit the Payroll Loading and Equipment Rates on a yearly basis for accuracy and reasonable methodology. These rates are then sent to FHWA for review and approval to use on federal projects. In addition, Traffic requested that IR start updating the Striping rates on an annual basis to be used for informational and decision making purposes only. 4. Cash Drawer Audits (Port of Entries, Drivers License, Shops, Motor Vehicle Services, And Financial Services): these audits were implemented in 2004 and will be conducted on an annual basis based on a risk assessment or as requested to continue assessing and tightening controls of WYDOT s cash per Operating Policy WTDEA Relief Fund: per SEMM Policy 4-23, IR is required to audit the WTDEA Relief fund for adherence to the policy and to ensure the account has been reconciled with support documentation and all expenses have been authorized. In FY 2012, IR also made several recommendations to the board on changes to their processes and internal controls. IR will determine if any of these recommendations have been implemented and determine if other recommendations need to be made. Projects Continued from FY 2012: 1. Wyoming State Parks: FHWA has requested that IR conduct a third party review. 2. Highway Patrol Evidence Inventory Process & Audit: IR will assist Highway Patrol in updating their Evidence Inventory Policy and develop an audit program that can be 4 P a g e

5 implemented by the District Offices as well as Internal Review to help ensure the safeguarding of evidence inventory. 3. Documentation of Internal Controls: IR would like to begin assessing and documenting internal controls within the department and make recommendations as needed. This will assist during WYDOT s OMB Circular A-133 Audit as well as future federal/state audits. 4. General Disbursement Audit Program & Testing: during WYDOT s FY 2011 A-133 audit it was discovered that compliance testing has not covered general disbursement type transactions. IR will develop an audit program and testing which can be done on general disbursement costs outside of WYDOT s annual A-133 audit. 5. Payroll Audit Program & Testing: during WYDOT s FY 2011 A-133 audit it was discovered that there continues to be issues regarding payroll approvals. In addition to testing payroll approvals, IR will be reviewing personnel records and comparing employee records to vendor records. We will also incorporate analysis of overtime and comp time to ensure that the charge codes are not being abused. New FY 2013 Projects for Consideration 1. Driver Services Application Review Process & Documentation: many other State DOTs have found fraud in their Driver Services application process and this item came up as a possible area to look at in the future for WYDOT. During this project we would document the application process including how efficient WYDOT is at reviewing those applications. IR would also observe several locations for adherence to the policy and make recommendations accordingly. 2. Highway Patrol Grants Process, Documentation & Cross Training: Highway Patrol continues to increase their federal funding from several different sources all of which have different compliance requirements. IR will document the processes around the administration of these different funds, make recommendations for better efficiency and cross train as needed to ensure the knowledge base is retained. 3. Motorcycle Safety Deposits audit: in FY 2006, IR assisted staff responsible for the WYDOT sponsored Motorcycle Safety class to develop a system to track participants of the class and that all participants have paid for the class. This system was implemented in the summer of The first audit of this system occurred in FY Due to findings discovered in FY 2010 and additional concerns arising in FY 2012, IR will conduct a another audit to ensure corrective action has been taken and to ensure that policies and procedures are being followed. 4. Cost Analysis: Executive Staff has several different areas that they would like to see costs and historical analysis including Chip Seal, Asphalt Patching, Sand Usage vs. Mag- Chloride, WYOLINK and Overtime and Comp Time Usage. IR will start to conduct analysis on these different areas as time allows. 5 P a g e

6 5. IT Consolidation Process Review and Documentation: as this consolidation process takes place it has been requested that IR attend meetings and document how the process evolves and the impacts it will have on WYDOT. Training Projects: 1. LPA Certification Training: IR has assisted in the development of an LPA Certification Training program which is being offered throughout the state by WyT2/LTAP. IR will continue to travel to the training locations and assist in the presentation as requested by the Planning Program. 2. Change Fund Policy Training: IR will continue to present the Change Fund Policy Training to individuals from POE and DS locations that come to Cheyenne to attend the New Supervisor Orientation at WYDOTU. IR will also present the training as needed during statewide meetings. 3. New Supervisor Orientation: IR will continue to present the Everything you ever wanted to know about Internal Review but were afraid to ask! presentation at each New Supervisor Orientation session. This training gives a brief look at who Internal Review is and what we do. Administrative Projects: 1. BSC: IR will meet with SPIP (Strategic Performance Improvement Program) at the beginning of FY 2013 to update our BSC. Once our BSC is finalized IR will develop a plan to implement the strategies presented in our BSC so that we ensure we meet our goals for FY Participation in AASHTO and WASHTO meetings and subcommittees: IR is currently a member of the AASHTO and WASHTO Administrative Subcommittee on Internal and External Audit. We attend an annual AASHTO meeting and monthly teleconference WASHTO meetings designed to evaluate and nationally standardize auditing processes. IR Manager participates in both the AASHTO Audit Guide Subcommittee and the AASHTO Internal Audit Guide Subcommittee. IR is looking into participating in an AASHTO peer review and will look to have a peer review conducted on IR in the next few years. 3. Continuing Professional Education: Government Auditing Standards require IR staff to obtain 80 hours of CPE every 2 years of which 24 hours must be in government auditing or accounting subjects. IR also has two employees studying to become Certified Internal Auditors (CIAs). 4. Update IR manual: IR has a manual that was developed in 1995/1996 and needs to be updated with IR s new procedures, policies and regulations. The above information may change depending on priorities, requests and upcoming BSC sessions. This document is compiled to assist IR in planning for the upcoming year and may be changed accordingly. 6 P a g e