UCR Audit Plan Narrative
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RISK BASED AUDIT WORK GROUPGUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCEALLOCATIONFISCAL YEAR 2001ATTACHMENT EUNIVERSITY OF CALIFORNIAINTERNAL AUDIT PLANFISCAL YEAR 2001 NARRATIVE & ASSUMPTIONS(UCR)Significant changes from 1999/2000 are noted in Italics._____________________________________________________________________1. Available Hours--Describe the basis for the number of FTE’s in the planincluding any change from current year staffing levels, time frame for fillingopen positions, assumed turnover and impact on available hours, and anypositions authorized but intentionally left open for necessary salary savings. Our authorized and funded number of 5 FTE is used in the 2000-2001 AuditPlan. Presently, we have one open position that is being recruited for and shouldbe filled by 7/01/2000. No employee turnover in 2000/2001 is assumed. Separately describe the basis for any hours in the “Other Resources category; e.g. temporaryassistance, interns, paid or unpaid overtime, or re-charge to another internal audit department(negative). The Other Resources hours are those of planned student interns. Generally, about 3 excellent student interns assist us for about 10 hours weekly during the three academic quarters. We do notsee any difficulty in continuing the use of interns at this level. In fact, we have a waiting list ofinterns. We have not budgeted for unpaid professional staff “overtime” but this may becomenecessary if the plan goes ...
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RISK BASED AUDIT WORK GROUP
GUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCE
ALLOCATION
FISCAL YEAR 2001
ATTACHMENT E
UNIVERSITY OF CALIFORNIA
INTERNAL AUDIT PLAN
FISCAL YEAR 2001 NARRATIVE & ASSUMPTIONS
(UCR)
Significant changes from 1999/2000
are noted in Italics.
_____________________________________________________________________
1.
Available Hours
--Describe the basis for the number of FTE’s in the plan
including any change from current year staffing levels, time frame for filling
open positions, assumed turnover and impact on available hours, and any
positions authorized but intentionally left open for necessary salary savings.
Our authorized and funded number of 5 FTE is used in the 2000-2001 Audit
Plan.
Presently, we have one open position that is being recruited for and should
be filled by 7/01/2000.
No employee turnover in 2000/2001 is assumed.
Separately describe the basis for any hours in the “Other Resources category; e.g. temporary
assistance, interns, paid or unpaid overtime, or re-charge to another internal audit department
(negative).
The Other Resources hours are those of planned student interns.
Generally, about 3 excellent
student interns assist us for about 10 hours weekly during the three academic quarters.
We do not
see any difficulty in continuing the use of interns at this level.
In fact, we have a waiting list of
interns.
We have not budgeted for unpaid professional staff “overtime” but this may become
necessary if the plan goes astray.
2.
Indirect Hours
--Describe any unusual variances from expected norms.
For
example, Non-Controllable time which is budgeted differently from leave
permitted by H.R. policies, Professional Development different from
guidelines, or Other reflecting the impact from an office relocation etc.
Comment on the manner in which Director’s time is allocated to administration
versus audit projects, especially if the overall indirect percentage is unusually
high (greater than 20%) or low (less than 10%).
Professional development time is allocated at 80 hours per professional since we
have the All Auditors Conference, integrated auditing training, ACUA, etc
scheduled for 2000/2001.
As to administrative time it is based on actual and is
RISK BASED AUDIT WORK GROUP
GUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCE
ALLOCATION
FISCAL YEAR 2001
ATTACHMENT E
recorded daily.
Generally, other than a couple hours each month for staff
meetings, time reporting, and intern recruiting, only the Director charges
administrative time. Any time spent by the Director on an audit is charged to
that audit.
Non-controllable time is based on polling of staff as to planned
vacation time by quarter, past/projected sick leave and jury duty experience.
Holiday time is based on actual by quarter.
With seasoned professional staff
coupled with the Director functioning as a “working” manager,
administrative
time tends to be lower than the UC system average.
3.
Audit Program
--Comment on coverage of the Audit Universe and its high-risk
components, using statistics from Attachment F-4 (Schedule 4 Plan Statistics),
as appropriate.
Comment also on the basis for the hours assumed in
Supplemental Audits.
Note
that while Supplemental Audits is intended to
acknowledge the dynamic nature of our environment--and also our on-going
risk assessment--it is not intended to undermine our ability to audit highly
ranked risks or mask accountability for our time.
Comment also on the extent
of obligated time versus time freely available to assign by the Audit Director on
a risk assessment basis.
We do not recharge at all, so time is freely available to assign on a risk
assessment basis.
We have only budgeted 400 hours supplemental audit time so
we can cover 100% of the high risk areas.
Historically, we have not had many
time consuming supplemental audits with the unique exception of cashiering last
year.
4.
Advisory Services
--Note the changes in the reporting categories begun in 1999.
Note also the addition of IPA (Information Practices Act) and COI (Conflict of
Interest Coordination).
These were added to reflect the roles assigned to UCSD
and UCSC respectively.
However, any location expecting to spend time on
these matters (outside of project specific time that should be charged to the
project) can budget and charge time here. Comment on material changes from
historical patterns if any are projected.
Comment also if any projected change
is a result of recharacterizing hours historically charged elsewhere or on any
efforts to promote Advisory Services in your environment.
RISK BASED AUDIT WORK GROUP
GUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCE
ALLOCATION
FISCAL YEAR 2001
ATTACHMENT E
In general we have increased this budgeted time in order to promote advisory
services.
We expect to be heavily involved in financial system control consulting
and conducting more control related training classes associated with the new
financial system.
Time will also be invested in assisting UCR in the
implementation of the new G-29 policy et al.
We expect the 5
th
audit professional
to incrementally add to our advisory services efforts.
5.
Investigations--
Comment on material changes from historical patterns if any
are projected.
If a basis other than historical patterns was used to estimate
investigations comment on that basis.
The 1500 hours is consistent with historical trends.
We have reduced it
approximately 200 hours from last year due to a slow down in the last half of FY
1999/2000.
6.
Support Activities
--Note that while the Support Activities categories are the
same, we agreed to one change in their usage beginning in 1999.
That is,
Quality Assurance may be used for local QA programs as well as the
systemwide program.
However, care should be taken to charge time only for
formal QA program efforts such as post issuance report reviews, post
completion checks for documentation and compliance with standards and local
procedures.
It should not be charged for any project specific time that belongs
in the project and is not a substitute for supervision, secondary review or pre
report issuance quality assurance measures.
Comment on the assumptions that drive significant hours in these categories and any
variances from historical or “normal” commitments of time in these categories.
Examples
might include an increase in commitments to Quality Assurance teams, managers’ new
assignments to systemwide workgroups and the like.
Planned time is less in FY 2000/2001 because of a 150 hour reduction in the
Quality Assurance category.
This is because in FY 1999/2000 we budgeted for
and experienced the UCR QAR.
We don’t expect to receive a QAR in FY
2000/2001.
7.
Total Direct Hours & Percent
--Comment on the overall allocation of Direct
Hours and the commitment to an audit program aimed at providing basic audit
RISK BASED AUDIT WORK GROUP
GUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCE
ALLOCATION
FISCAL YEAR 2001
ATTACHMENT E
coverage with principal audit emphasis on highly ranked risks.
Comment on
the Direct Hour Percentage as a performance measure and the variance from a
benchmark of 85%.
Assuming no professional staff turnover the number of direct hours should be
attained.
We believe a 91% direct time rate is reasonable for us (12/31/99 YTD
actual was 92%).
The primary factors contributing to this higher percentage
are: (1) student interns working generally at 100% direct time, (2) seasoned staff
that require very little administrative time, (3) and a “working” Director coupled
with no other management layers.
8.
Time Phasing Assumptions
--Predictable variances from period to period
should be accounted for in your spread of hours.
For instance, the holiday
hours are predictable based on the local holiday schedule.
Other items, such as
vacations, illness and other authorized time off are less predictable, but it may
nevertheless be your assumption that they do not flow evenly by quarter.
It is
suggested that you first estimate total available hours by period, then estimate
non-controllable and controllable hours (for such things as scheduled CPE) to
arrive at total hours available for direct audit activities before spreading the
annual plan total for Planned Audits and other direct activities.
Remember that
it is not necessary to spread individual audits by quarter--time phasing is only
requested at the Schedule 2 (Attachment F-2), not
Schedule 3 (Attachment F-3)
level.
Comment on significant assumptions made in spreading the annual plan by quarter.
Some assumptions have already been noted above.
The “plug figure” each
quarter is Planned Audits.
Audit planning takes place in the third and fourth
quarters.
Audit committee meetings are generally once every quarter.
Professional development is weighted heavily in the first half of the year (All
Auditors, ACUA, integrated auditing).
QAR time is expected to be absent in the
1
st
and 4
th
quarters since it seems unlikely that our new systemwide QAR
program will be developed and implemented in the first quarter and often the
fourth quarter is avoided because of work demands in completing the audit plan.
RISK BASED AUDIT WORK GROUP
GUIDELINES FOR ANNUAL AUDIT PLANNING AND RESOURCE
ALLOCATION
FISCAL YEAR 2001
ATTACHMENT E
9.
Other Matters
--Comment on the biggest variables that will drive the ultimate
determination of your ability to complete the annual plan.
Such things may
include significant contingencies that can’t be predicted at this time; e.g.
staffing contingencies, major external investigations on the horizon such as
PATH II, DOE directives, Internal Audits role in a CSA program, and the like.
The biggest variables include the following:
continuation throughout 2000/2001
of a 5.0 FTE staffing level, our role in CSA/Ethics programs, level of
investigations, the aftermath/continuation of the UCR Financial System
implementation, successful completion of the 1999/2000 Audit Plan, smooth
continued implementation of the TeamMate work papers, and the level of special
management requests.
Suspected impropriety is frequently reported to us,
probably somewhat a result of our accountability and internal control classes as
well as our enhanced visibility on campus.
We believe progress has been made in
the “triage” of such reports in order to maximize our time utilization.
Comment also on the capacity to handle additional work; e.g. to what extent do you
consider the plan to be a stretch goal or what level of contingency availability is built
into the plan.
We consider the plan to be reasonably attainable.
If it is not necessary to use all
the budgeted Investigation time, the 400 Supplemental Audit time, and the hours
we have allocated for special requests then we should be able to add some
additional 2
nd
tier audits during the year.
However, historically these provisions
are justifiable.
Contingency resources include additional student interns and
working overtime.
If we lose an auditor during the year the possibility exists for
short term contractual assistance.
Comment on any other matters that you deem relevant to an understanding of your
Annual Audit Plan.
None.
UNIVERSITY OF CALIFORNIA
SCHEDULE 1
INTERNAL AUDIT PERSONNEL
FY 2001
UCR
I.
Authorized Personnel
Profess.
Admin.
Total
Number of Authorized Personnel
5
0.25
5.25
(Provide detail of any changes, e.g. date,
classification level, etc. Provide separate
narrative on any reductions.
Assoc.IAD
Prof.
II.
Actual FTE's
IAD
or MGR.
Staff
Total*
Beginning of Period
1
4
5
Anticiapated Additions**
Estimated Separations**
End of Period
1
4
5
*
Footnote the approximate number of professionals assigned to Health Sciences during the period on an FTE basis.
** Use assumed start and leave dates to calculate weighted average FTE's below.
III.
Gross & Net Available
Hours Calculation
Total Year
1st
2nd
3rd
4th
Hours
Quarter
Quarter
Quarter
Quarter
Weighted Avg.
FTE's**
5
5
5
5
5
Hours in the period
2080
520
520
520
520
Sub-Total
10400
2600
2600
2600
2600
Other Resources:
Overtime
Contract Labor/Interns
1000
0
350
350
300
Recharge In or (Out)
0
Admin. & Other
0
Sub-Total
1000
0
350
350
300
Gross Available Hours
11400
2600
2950
2950
2900
Less Non-Controllable Hours
1650
456
628
368
198
Non-Controllable Percent
14%
18%
21%
12%
7%
Total Net Available Hours
(1)
9750
2144
2322
2582
2702
(1)
Must tie to "Total Net Available Hours" on Schedule 2 - Annual Resource Allocation
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UNIVERSITY OF CALIFORNIA
INTERNAL AUDIT ANNUAL RESOURCE ALLOCATION
SCHEDULE 2
FY 2001
UCR
Distribution of Net
Available Hours
UCOP %
Plan
Total Year
1st
2nd
3rd
4th
Guideline Percent
Hours
Quarter
Quarter
Quarter Quarter
Indirect Hours
Administration
5--10%
5%
500
125
125
125
125
Professional Development
2--5%
4%
400
150
150
50
50
Other
0--3%
0%
0
0
0
0
0
Total Indirect Hours
900
275
275
175
175
Total Indirect Percent
15%
9%
9%
13%
12%
7%
6%
Direct Hours
Audit Program
Planned Audits - Current Year
48%
4650
894
1022
1232
1502
Planned Carryforward Audits
0%
0
0
0
0
0
Suppl. Audits - Current Year
10%
4%
400
100
100
100
100
Total Audit Program
5050
994
1122
1332
1602
Total Audit Percent
40--60%
52%
52%
46%
48%
52%
59%
Advisory Services
Consultations/Spec. Projects
7%
700
175
175
175
175
Systems Dev., Reengineering Teams, Etc.
3%
300
75
75
75
75
Internal Control & Accountability
4%
400
100
100
100
100
External Audit Coordination
0%
20
5
5
5
5
IPA, COI & Other
0%
0
0
0
0
0
Total Advisory Services
1420
355
355
355
355
Total Advisory Percent
10--25%
15%
15%
17%
15%
14%
13%
Investigations--Hours
1500
375
375
375
375
Investigations--Percent
10--20%
15%
15%
17%
16%
15%
14%
Audit Support Activities
Audit Planning
2%
200
0
0
150
50
Audit Committee Support
1%
80
20
20
20
20
Systemwide Audit Support
2%
200
50
50
50
50
Computer Support
3%
300
75
75
75
75
Quality Assurance
1%
100
0
50
50
0
Total Audit Support
880
145
195
345
195
Total Audit Support Percent
5--10%
9%
9%
7%
8%
13%
7%
Total Direct Hours
8850
1869
2047
2407
2527
Total Direct Percent
85%
91%
91%
87%
88%
93%
94%
Total Net Available Hours
(1)
9750
2144
2322
2582
2702
Total Net Available Percent
(2)
100%
100%
100.00% 100.00% 100.00% 100.00% 100.00%
(1)
Must tie to "Total Net Available Hours" on Schedule 1 - Personnel
(2)
Must equal 100% or there is an error
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UNIVERSITY OF CALIFORNIA
DRAFT
INTERNAL AUDIT PLAN DETAIL
SCHEDULE 3
FY 2001
UCR
High Risk?
Planned
Primary
Additional
Name/Title of Audit
(1 is highest)
Hours
Index Code
Index Code(s)
Carryover--(WIP)
None
Subtotal Carryover
0
New Audits
Bank Account Administration and Reconciliation
1
200 E.d.01
Accounts Payable
1
300 E.e.01
Central Systems Development -- UCRFS (PS ver 7.5 Upgrade)
1
300 G.e.02
General Ledger/Sub Ledger Systems
1
300 E.f.01
E.f.02
Computing & Communications Strategic Planning
1
250 G.a.01
G.b.01, G.b.02
Parking Operations
1
300 A.a.07
Application Review - FAMIS
1
200 G.g.01
D.d
Network Security
1
300 G.b.01
Contract & Grant Accounting
1
250 E.k.01
Federal Cost Transfers
1
250 E.k.02
Keck Foundation Grant
1
200 E.k.01
H.c.00.08
Financial Analytic Review
1
400 E.f.01
School of Education
2
200 H.c.00.24
EH&S - Hazardous Waste
2
200 C.a.03
Athletic Development
2
150 A.a.01
B.a.05
Biomedical Sciences
3
100 H.c.00.05
Construction
3
200 D.b.02
Commons Dining Services - Cashiering
3
100 E.d.02
Early Academic Outreach Program
3
200 H.f.01
Operational Activity Surveys (20)
3
150 H.c
Follow-ups
100
Subtotal New Audits
4650
Total Plan Audits
(1)
4650
Planned Advisory Services
Athletics Compliance Committee
2
100 A.a.01
Desert Satellite Campus
3
50 H.c.00.25
G-29 et al implementation
NA
100 NA
Other
1170
Total Advisory Services
1420
(Used where known advisory services will address high risk areas
and thus their inclusion here provides a basis for statistical
calculation of coverage of items risk ranked as high.
Other known
Advisory Services (e,g, CSA assistance to controllers) should also
be listed.)
Other Advisory Services as yet unknown should be added
as a lump sum so that a total ties to Schedule 2.
(1)
Must tie to "Planned Audits" on Attachment D (Schedule 2 - Allocation Worksheet)
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UNIVERSITY OF CALIFORNIA
DRAFT
SCHEDULE 4
INTERNAL AUDIT PLAN STATISTICS
FY 2001
UCR
Annual
I
Coverage of High Risk* (#1 items)
Hours
Number
Goal
In Planned:
Audits
3250
10
Advisory Services
0
0
Investigations
0
0
Total
3250
10
Percentage
N/A
100% 80--100%
*DEFINITION OF HIGH RISK
The highest 10 risk scores assigned at the local campus or laboratory.
II
Coverage of Next Tier Risks** (#2 items)
Hours
Number
In Planned:
Audits
550
3
Advisory Services
100
1
Investigations
0
0
Total
650
4
Percentage
N/A
40%
N/A
(Info only)
**
DEFINITION OF NEXT TIER RISKS
The
NEXT
10 highest risk ranked items after the
HIGH
risks.
III
Distribution of Tier 1 Audit Coverage
Hours
Pct.
A
Auxiliary, Business, & Employee Support Services
450
10%
B
Development & External Relations
0
0%
C
Environmental Safety and Security
200
4%
D
Facilities, Construction & Maintenance
200
4%
E
Financial Management
2000
43%
F
Human Resources & Benefits
0
0%
G
Information & Communications
1050
23%
H
Campus Research Departments & Instruction
650
14%
I
Health Sciences Research, Instruction & Clinical Services
0
0%
J
Lab Research Programs & Processes
0
0%
K
Office of the President
0
0%
Other -- followups
100
2%
Total Planned Audits
4650
100%
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