Please use the following two slides as a template for your presentation at NES. A Property Management Internal Audit (PMIA) Program The Purpose & The Plan Ron C. Lobo, CPPM CF Government Property Asset Manager ACADEMI Training Center Tidewater Chapter

Property Management Internal Audit (PMIA) Checking the Pulse of your Property Management Program

Presentation Objectives:  Introduction & Purpose of a Property Management Internal Audit (PMIA) Program  How to Plan, Schedule and Implement the right PMIAs for your Organization  Understanding The Role of a PMIA Auditor  How to effectively conduct a PMIA  Importance of having a good PMIA Follow-up plan  PMIA Program Summary

WHY DO IT? The Property Management Internal Audit (PMIA) Program

 Comply with regulations, rules, laws and organizational guidelines.  Measure the conformity and effectiveness of planned arrangements against agreed, contractual, regulatory or business management requirements. In other words, is your Property Management Program’s intent adequate to the specific needs or requirements? And are the Programs, functional entities and their users in compliance? Introduction & Purpose:

Introduction & Purpose (cont.)  To ensure Customer and Company Management that Government property is being properly controlled.  To provide for factual status and updates to Management for enabling positive decision making.  To collect and provide valuable information to effectively correct non systemic situations and promote continuous improvement.  To provide for an essential business tool to evaluate and improve the effectiveness of risk management for your Property Management Program. 6

Planning, Scheduling and Implementing The Right PMIAs for your Organization 7

Give it some detailed thought: What’s good for other companies may not be good for yours! Make sure you have developed the right PMIA plan & strategy for your organization. I Think! I Think! They Thought! 8

8 Planning, Scheduling and Implementing the Right PMIAs for your Organization  Identify Key Auditable Functional groups & Programs  Identify Periods and frequency for your PMIAs  Identify the type of audit to be performed  Identify the PMIA parameters to be covered  Create a tentative audit schedule for the next calendar year  Get Management buy-in/support before beginning your PMIA program

10 PMIA SCHEDULE SAMPLE

Planning and Scheduling The Right PMIAs For Your Organization Other Points of Consideration:  Functional Area/Program Risk Levels  Specialized Contract Requirements  Contract/Program Changes/Updates  Department SOPs/Work Instructions and changes  Specialized Federal/Agency Regulatory Requirements  Availability of audit personnel

Understanding The Role of a PMIA Auditor 12

Understanding the role of a PMIA Auditor  Always be Pragmatic/Professional/Prepared/Punctual (P 4 ).  Always apply consistent methods and standards when conducting your PMIAs.  Stay within the boundaries of your PMIA objectives and avoid areas of conflict.  Use the seven friends of auditing Who, What, Where, When, Why and How and “SHOW ME.”  Obtain and collect relevant factual data/information.  Ask open ended questions & take copious notes.  Be positive and encourage/coach your Auditees. The “Do”s: 13

Understanding the role of a PMIA Auditor The “Don’t”s:  Be rude or arrogant.  Spring any surprises on the Auditees.  Render personal or non-factual opinions.  Attempt to fix the discrepancies yourself.  Do all the talking - Listen to your Auditees. 14

How to Effectively Conduct a PMIA Make sure you have covered the Key components of your PMIA program. One method would be to use a systematic step by step approach. Step One……………….Pre-Audit Preparations Step Two……………….PMIA Entrance Interview Step Three……………..PMIA Fieldwork Step Four………………PMIA Exit Interview Step Five ………………Post PMIA Follow-up & Continuous Improvement 15

Never conduct an Audit without the proper Preparation! AUDIT WHAT????????????????????????? 16

Step One: Pre-Audit Preparations Confirm PMIA schedule with all involved parties Determining the scope of the PMIA Prepare a pre-audit check list your audit objectives Obtain and review relevant documentation Obtain current inventory listings Select the samples to be review. 17

PMIA Sample Checklist Operating Unit/Program: _______________ PPOCs:_____________________________ Date of audit: _________________________ PMIA Auditor :________________________ PMIA ProcessYesNoComments/Observations 1.0Pre-PMIA 1.1 Has the Operating Unit/Program’s PPOCs been properly and timely notified of the PMIA for their Operation Unit or Program? 1.2 Have you determined, after evaluating the types of property, complexity of the work performed, risk to the company and customer expectations, the extent and scope of the audit? 1.3 Has the Operating Unit/Program SOPs and work Instructions been reviewed? 1.4 Have the Outcomes, Audit Population and Sample counts for this PMIA been selected and communicated to the PPOCs? 2.0Conducting the PMIA – Entrance Interview 2.1 Have you clearly explained the PMIA Objectives and Scope to the PPOCs? Has the last PMIA, Contract PWS (If applicable) regulations, Standards, Polices and SOPs Work Instructions and forms. Population/Audit samples been discussed? 3.0 Conducting the PMIA – Physical Audit 3.1 Has all the items in you audit sample been located? Compared physical counts to inventory records? Have any concerns dealing with property storage and control been discussed with the PPOC’s? 3.2 Are there documents that need to be Collected and confirmed as evidence? 3.3 Where there any resolved and/or unresolved discrepancies? 4.0 Conducting the PMIA - Exit Interview 4.1 Have you reviewed what happened during the audit, making sure that there is no questions unanswered and all documentation is clear and explained? 5.0Additional Information 5.1 Has sufficient evidence been collected such as copies, forms and other documentation? 6.0Follow-up Post PMIA 6.1If necessary, has a follow Follow-up plan been established communicated to the PPOCs? 18

Step Two: The Opening Meeting  Always be prompt and present.  Go over the step-by-step details for this PMIA.  Review the last PMIA for this area and discuss any areas of concern and/or corrective actions (if any).  Review the Program/Functional groups current SOPs, work instructions and forms.  Ensure that all parties are clear with the scope of this PMIA and how it will be conducted. 19

Step Three: Fieldwork  Physically locate the items selected from your random sample and randomly select items to trace back to the records.  Collect and confirm any necessary evidence and documents that were a part of the PMIA.  Check the physical condition and environmental storage of the Property storage locations.  Document any discrepancies found during the PMIA.  Schedule an exit interview with the Program/Departments Auditees to go over the details of the PMIA.

Don’t be the BULLY

Step Four: Closing Meeting  Schedule a time and place soon thereafter the PMIA and carefully go over the step-by-step details with the Auditees.  Point out things that went well, factual based observations and any preventative or corrective findings that you may have discovered.  Give the Auditees an opportunity to ask any questions and ask for confirmation of all audit items and clear up any ambiguities.

Step Five: Post PMIA activities  If necessary initiate Preventative/Corrective action processes to include target dates.  Post/file all PMIA documents electronically or manually in a secure and controlled area.  Set in motion follow-up plan to include coaching, objective meeting and if necessary a corrective action resolution plan.  Complete formal PMIA report and distribute to appropriate levels of Management in your Organization.  Schedule the next PMIA for this functional group or program.

PMIA Highlights & Summary The PMIA Purpose:  Ensure Compliance  Measure Conformity & Risk  Measure Effectiveness & Efficiency The PMIA Plan:  Senior Management Buy-In  Key Auditable Areas/Frequency  Auditees Availability The PMIA Auditor:  Professional  Pragmatic  Competent/Knowledgeable  Prepared

PMIA Fieldwork:  Entrance Interview  Physical Audit  Exit Interview  Follow-Up PMIA Benefits:  Affirmation of PMIA Purpose  Positive Decision Making  Continuous Improvements PMIA Summary: (cont.)

Ron C. Lobo, CPPM CF Government Property Asset Manager ACADEMI Training Center Moyock, NC Office or Thank you for your attention! Questions?