Joint Legislative Audit and Review Commission Review of Prior Year - - PowerPoint PPT Presentation

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Joint Legislative Audit and Review Commission Review of Prior Year - - PowerPoint PPT Presentation

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Joint Legislative Audit and Review Commission Review of Prior Year Results Presentation of Annual Work Plan _____________________________________ May 9, 2016 Martha S. Mavredes, Auditor of Public Accounts Staci A. Henshaw, Deputy Auditor

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Joint Legislative Audit and Review Commission

Review of Prior Year Results Presentation of Annual Work Plan _____________________________________

May 9, 2016 Martha S. Mavredes, Auditor of Public Accounts Staci A. Henshaw, Deputy Auditor

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Overview

  • Strategic Planning
  • Legislative Impact on APA Work Plan
  • Proposed Salary Scales
  • Proposed 2017 Work Plan
  • Prior Work Plan Results
  • Work in Progress

WWW.APA.VIRGINIA.GOV Page 2

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Other Accomplishments

On March 7th, the APA was recognized as one of Richmond’s Top 60 Workplaces in the Metro Business section of the Richmond Times- Dispatch.

Page 3 WWW.APA.VIRGINIA.GOV

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Strategic Planning – Mission Statement

The APA serves Virginia citizens and decision-makers by providing unbiased, accurate information and sound recommendations to improve accountability and financial management

  • f public funds.

Page 4 WWW.APA.VIRGINIA.GOV

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Strategic Planning - Established Core Values

Professional Engaged Collaborative Knowledgeable

Page 5 WWW.APA.VIRGINIA.GOV

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Strategic Planning – Strategic Goals

Build Our Culture Be a Leader in the Profession Strengthen and Retain Our Staff Communicate Our Value

Page 6 WWW.APA.VIRGINIA.GOV

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SLIDE 7

Impact of New Mandated Work in 2016 Work Plan (hours)

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825

  • Pensions work at VRS

1,475 •Pensions work at agencies

1,000 •NCAA Agreed-Upon Procedures

Mandated changes

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SLIDE 8

Impact of 2015 Legislation

  • Chapter 704

– Intercollegiate athletics programs

  • Appropriation Act

– § 4-9.04 Implement JLARC Recommendations

Page 8 WWW.APA.VIRGINIA.GOV

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SLIDE 9

Impact of 2016 Legislation

  • Chapter 547

– Including salaries in Data Point – Enhancing Data Point with graphs, charts and

  • ther visual displays and FAQs
  • Chapter 724/725

– Audit of BVU Authority by 7/1/2016

  • New audits in Executive Branch

– Virginia International Trade Corporation – Virginia Research Investment Fund

Page 9 WWW.APA.VIRGINIA.GOV

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Impact of 2016 Legislation, continues

  • Chapters 759/769

– Auditing of adherence to cash flow requirements of certain capital projects

  • Several bills that created entities that will

require ongoing audits

– Virginia Shoreline Resiliency Fund – Virginia Growth and Opportunity Board and Fund – Virginia Collaborative Economic Development Performance Fund

Page 10 WWW.APA.VIRGINIA.GOV

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SLIDE 11

APA Staffing Levels

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20 40 60 80 100 120 140 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 Jul-16 Actual 103 107 112 119 120 124 Approved 130 130 130 130 130 130 Actual Approved

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APA Budget Overview

FY16 Amount % Personnel, training and travel $11,611,063 92 Building rentals and insurance 306,560 2 Other (includes audit services, computer hardware and software) 695,343 6 Total $12,612,966 100

Page 12 WWW.APA.VIRGINIA.GOV

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Hardware and Software Support

Key Software Support: Tableau $ 60,108 PeopleSoft 22,340 Oracle 18,926 Checkpoint 9,086 Total FY 2016 $110,460 Estimated FY2017 $134,221

Page 13 WWW.APA.VIRGINIA.GOV

Hardware Requirements: 16 servers Costs from $6,000 to $20,000 each 110 laptops $1,400 each, 3 year refresh 30 desktops $950 each, 3 to 4 year refresh

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SLIDE 14

Salary Scales

  • Adjustments reflect salary increase in budget

approved by General Assembly

  • Minimum and maximum scales increase 3%

effective November 10, 2016

  • Bonuses may also be given during the year to

reward exceptional performance or passing professional exams

  • Raises may be given within the salary bands and

will follow our compensation plan and budget

WWW.APA.VIRGINIA.GOV

Page 14

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Salary Scales

Position Number of Positions 2016 2017 Present Scale Proposed Scale Effective November 10, 2016 Deputy Auditor 1 1

$93,070 - $172,883 $95,862 - $178,070

Project Leader 14 15

71,248 - 160,108 73,385 - 164,912

Auditor 88 87

47,723 - 104,901 49,155 - 108,048

Staff 27 27

29,358 - 71,721 30,239 - 73,873 Total

130 130

Page 15 WWW.APA.VIRGINIA.GOV

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Proposed 2017 Work Plan

  • Annual work plan = work performed during

most of fiscal year 2017

  • CAFR, Statewide Single Audit, mandatory

and special projects are major focus

  • Use risk factors to determine the audit work

to be performed with remaining resources

WWW.APA.VIRGINIA.GOV

Page 16

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Work Plan Comparison (hours) Proposed FY 2017 Work Plan 133,786 Prior Year Work Plan 133,523 Increase 263 FY 2017 work plan allows for completion of projects carried forward from the prior year.

WWW.APA.VIRGINIA.GOV Page 17

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Total Hours by Function

Function Hours

Statewide and Agency Projects: Special Projects 7,426 Executive Departments 87,587 Cycled Agencies 9,500 Independent Agencies 9,633 Judicial (Agencies, Clerks, and Courts) and Local Governments 19,640 TOTAL WORK PLAN 133,786

Page 18 WWW.APA.VIRGINIA.GOV

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Total Hours by Function

65% 15% 7% 7% 6% Executive (excluding cycled agencies) Judicial (agencies, clerks, and courts) and Local Government Independent Agencies Cycled Agencies Special Projects

Page 19 WWW.APA.VIRGINIA.GOV

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Hours by Executive Departments (Total 87,587)

Department Hours Executive Offices and Administration 2,271 Commerce and Trade 3,677 Education (including Higher Ed) 44,804 Finance 17,734 Health and Human Resources 9,395 Natural Resources 650 Public Safety 3,316 Technology 425 Transportation 5,225 Veterans Affairs and Homeland Security 90

Page 20 WWW.APA.VIRGINIA.GOV

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Types of Special Projects

  • Projects Required by Legislation, Statute, or

Appropriation Act

  • Projects Determined by an Analysis of Risk

WWW.APA.VIRGINIA.GOV

Page 21

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Special Projects: Required by Legislation, Statute,

  • r Appropriation Act - Recurring
  • Commonwealth Data Point Internet

Database

  • Review of Performance Measures
  • Capital Project Cash Flow Requirements
  • MEI Project Approval Commission
  • PPEA Comprehensive Agreement Review
  • APA Annual Report

WWW.APA.VIRGINIA.GOV

Page 22

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Special Projects: Required by Legislation, Statute,

  • r Appropriation Act - Nonrecurring

Audit of the Bristol Virginia Utilities Authority Objectives:

  • Examine financial operations and governance
  • Identify and disclose deficiencies within the

financial and operational practices

  • Identify and evaluate corrective actions take to

date and planned for the future

Page 23 WWW.APA.VIRGINIA.GOV

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Special Projects: Risk Based Analysis

  • Progress Report on Selected Systems

Development Projects in the Commonwealth

  • State of Information Security in the

Commonwealth

  • Capital Project Monitoring

WWW.APA.VIRGINIA.GOV

Page 24

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Special Projects: Risk Based Analysis

  • Comparative Report for Higher Education
  • Statewide Analysis of Cardinal
  • Review for Potential Improper Benefit

Payments

WWW.APA.VIRGINIA.GOV

Page 25

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Requested Actions

  • Approval of the Overall Work Plan
  • Approval of Salary Scales

Page 26 WWW.APA.VIRGINIA.GOV

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Prior Work Plan Results

  • Issued 600 Reports

– Including financial statement, financial related and special reviews – Including audit of the Commonwealth’s financial statements (CAFR) and federal programs (Single Audit)

Page 27 WWW.APA.VIRGINIA.GOV

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SLIDE 28

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CAFR Internal Control and Compliance Findings 2015 2014 2013 Systems Controls Access Controls 15 15 15 System Security 28 35 12 Application Controls 2 3 2 General Controls 27 2 Retirement System Data 8 4 Financial Reporting 7 3 5 Statement of Economic Interest 3 Payroll 2 4 Fixed Assets 1 1 Procurement 1 1 Expenditures 3 4 Other 3 11 11 TOTALS 97 80 51

CAFR and SSA Results

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CAFR and SSA Results

Federal Compliance Findings

2015 2014 2013 Special Tests and Provisions 6 8 6 Activities Allowed or Unallowed 2 Allowable Costs/Cost Principles 1 Cash Management 1 3 1 Reporting 1 5 5 Sub-recipient Monitoring 1 3 2 Eligibility 1 Davis-Bacon Act 1 Procurement 2 Other/Internal Control 1 3 2 TOTALS 13 25 17

Page 29 WWW.APA.VIRGINIA.GOV

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Audit Results: Secretary of Health and Human Resources

Behavioral Health and Developmental Services

  • 20 Findings

Health

  • 7 Findings

Medical Assistance Services

  • 6 Findings

Social Services

  • 4 Findings

37 Total Findings

Page 30 WWW.APA.VIRGINIA.GOV

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Audit Results: Secretary of Transportation

20 Total Findings

VDOT

11 Findings

DMV

9 Findings

Page 31 WWW.APA.VIRGINIA.GOV

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Audit Results: Virginia Employment Commission

Report includes:

  • 10 internal control and compliance

recommendations

– 3 classified as material weaknesses – 7 repeat findings

  • Status of system development projects
  • Results from review for potential improper

benefit payments

Page 32 WWW.APA.VIRGINIA.GOV

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Virginia Health Workforce Development Authority

  • Authority should identify additional funding

to ensure its sustainability

  • 11 recommendations for improvement

– Define Employee Responsibilities – Maintain Personnel Files – Report Accurate Information to DOA – Reconcile Bank Statements Timely (Repeat) – Properly Code Expenses (Repeat) – Make Vendor and Tax Payments By Due Date

Page 33 WWW.APA.VIRGINIA.GOV

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Virginia Health Workforce Development Authority

  • 11 recommendations for improvement

(cont.)

– Follow Procurement Rules (Repeat) – Insufficient Policies and Procedures (Repeat) – Improve Budget Process (Repeat) – Ensure Accounts are Designated as Public Deposits – Properly Separate Duties (Repeat)

Page 34 WWW.APA.VIRGINIA.GOV

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Study of the Usage of Sub-recipient Schedule of Expenditures of Federal Awards

  • Commonwealth expends approximately

$13.5 billion in federal funds annually

  • Approximately $2.5 billion is passed

through to non-state entities creating a sub- recipient relationship

  • Selected 15 of 37 agencies that reported

disbursements to sub-recipients

Page 35 WWW.APA.VIRGINIA.GOV

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SLIDE 36

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Agency Policies Practices Aging and Rehabilitative Services   Agriculture and Consumer Services  No Comprehensive Services No No Criminal Justice Services  No Education  No Emergency Management  No Environmental Quality   Housing and Community Development  No Old Dominion University  No Social Services   Transportation  No Veterans Services No No Virginia Commonwealth University  No Virginia Information Technologies Agency No No Virginia Tech  No

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Analysis of Statewide Sub-recipients

  • Pooled the disbursement to non-state sub-

recipients to determine which received over $500,000 (245)

  • Searched Federal Audit Clearinghouse to

determine if they had an audit completed (225 audits were located)

  • 20 sub-recipients did not have a Single

Audit

Page 37 WWW.APA.VIRGINIA.GOV

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Sub-recipients: Recommendations

  • Agencies work with DOA to update the

Federal Grants Management requirements and set expectations for confirming that sub-recipients met their audit requirements

  • DOA develop statewide reports to identify

which sub-recipients received more than $500,000

  • Consider adding CFDA numbers to Cardinal

Page 38 WWW.APA.VIRGINIA.GOV

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SLIDE 39

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39 36 41 51 95

10 20 30 40 50 60 70 80 90 100

1 2 3 4 5

Information Security Findings by FY

Series1 Series2 Series3

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Information Security Findings by Major Control Area

Area Tested # Agencies Tested # Findings % Access Control 53 33 59 Risk Assessment 21 16 76 Configuration Management 19 13 68 Contingency Planning 18 13 75 Database 17 11 65 Web Application Review 15 8 53 System and Information Integrity 14 10 71 Physical and Environmental Protection 14 8 57

Page 40 WWW.APA.VIRGINIA.GOV

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Review of the Commonwealth’s Mobile Devices

  • Chapter 806 of the 2013 Virginia Acts of Assembly

– The Chief Information Officer and the State Comptroller shall develop statewide requirements for the use of cellular telephones and other telecommunication devices by in-scope Executive Department agencies, addressing the assignment, evaluation of need, safeguarding, monitoring, and usage of these telecommunication devices. The requirements shall include an acceptable use agreement template clearly defining an employee’s responsibility when they receive and use a telecommunication device.

Page 41 WWW.APA.VIRGINIA.GOV

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Mobile Devices, continued

  • Commonwealth agencies spent

$12,774,440 in wireless services in 2013

  • 18 out of 24 agencies and institutions of

higher education surveyed do not have adequate internal policies and procedures

  • ver mobile devices

Page 42 WWW.APA.VIRGINIA.GOV

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Mobile Devices, continued

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Findings

990,525 Unused minutes in pooled plans $558,435 Recurring minute and data overage charges $130,196 Roaming charges $1,590,533 Mobile devices unused for 6 – 12 months of a year $16,979 34 mobile devices purchased at full price $9,528 143 pagers at one agency not in use

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Capital Projects Cash Flow Requirements

  • 2nd Annual Report on cash flows

requirements for projects in Chapter 806

  • Advisory Committee meets quarterly to

evaluate capital projects

  • Expenditures have stayed within the $250

million annual limit

  • Found delays in obtaining planning funds

from the Central Capital Planning Fund

Page 44 WWW.APA.VIRGINIA.GOV

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Central Capital Planning Fund Funding Analysis

Page 45 WWW.APA.VIRGINIA.GOV

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Governance over Enterprise Applications

  • Enterprise applications are applications

used by multiple state agencies

  • Currently no formal governance structure in

place

  • Without a governance structure, each

agency independently decides when to modernize their applications, the best approach to take, and the software to use

Page 46 WWW.APA.VIRGINIA.GOV

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Governance over Enterprise Applications

  • Alternative 3: Create a governance structure
  • f legislative representatives and executive

branch data stewards to advise the Secretary

  • f Technology on application decisions (when

and how to replace and how to fund)

– HAC and SFC representatives – Secretaries of Technology, Finance and Administration – State Comptroller and Commonwealth’s CIO – Directors of DPB, DGS and DHRM

Page 47 WWW.APA.VIRGINIA.GOV

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Governance over Enterprise Applications

  • Alternative 2: Modify existing language under

Section 2.2-225 of the Code of Virginia relative to the Secretary of Technology’s authority over enterprise applications

– Current language may not provide clear authority for the Secretary to make enterprise application decisions or to intervene to solve problems between agencies that cross secretariats – Also create governance structure as in Alternative 3

Page 48 WWW.APA.VIRGINIA.GOV

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Governance over Enterprise Applications

  • Alternative 1: Establish a Deputy Chief of Staff

position with responsibility over governance. Also create a governance structure (like Alternative 3) to advise the Deputy in:

– establishing a Commonwealth strategic direction

  • ver enterprise applications

– setting long-term goals – prioritizing system replacement and upgrade, and providing transparency of their choices via a six- year plan

Page 49 WWW.APA.VIRGINIA.GOV

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Review of eVA and Cardinal Interface Efforts

  • The current efforts to integrate the Cardinal

finance module and eVA procurement system are expected to cost $8 million and provide an interface for only roughly 11,000 transactions annually, resulting in a cost that outweighs the efficiency and transparency benefits it would add.

Page 50 WWW.APA.VIRGINIA.GOV

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Review of Agency Performance Measures

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FY 2012 FY 2014

Key Measures

224 295

Productivity Measures

78 96

Other Agency Measures

1,135 547

Total Performance Measures

1,437 938

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SLIDE 52

Virginia’s Performance Measurement Structure

Page 52 WWW.APA.VIRGINIA.GOV

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Performance Measures: Issue Highlighted in Report

  • Performance measures results were

accurate and reliable for 88 percent of the key performance measures reviewed

  • There were certain understandability issues

with some of the measures reviewed, but

  • verall progress has continued
  • Some measures developed by the

administration for inclusion in the Executive Agreements did not conform to DPB’s guidelines (2015)

Page 53 WWW.APA.VIRGINIA.GOV

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SLIDE 54

Work in Progress: Special Reports

  • Review of Independent Financial Systems

and Recommendations of Future Cardinal Functionality – Part 2

  • Statewide Review of Travel – Part 2
  • Comparative Report for Higher Education

(FY2015)

  • Statewide Review of Vehicle Usage
  • Study of Bureau of Facilities Management

WWW.APA.VIRGINIA.GOV Page 54

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SLIDE 55

Projects Moved to 2017 Work Plan

  • Statewide Review of Voyager Fuel Card

Program

  • Department of Conservation and

Recreation Follow-up Review

Page 55 WWW.APA.VIRGINIA.GOV

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SLIDE 56

ADDITIONAL QUESTIONS?

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