1. ANNUAL AUDIT RISK ASSESSMENT & WORK PLAN
Presented by Sandra Healy, CGFM
Principal Auditor
Idaho Transportation Department

2. Office of Internal Review Org Chart*
07/16/96
Office of Internal Review Org Chart
Donita Stephens
Admin Assistant
Mike Cram
Principal Auditor
Sandra Healy, CGFM
Diego Curt, CISA
Michelle Doane
Mary Quarles,CPA
Internal Review Manager
Carri Rosti,
CPA, CGFM
ITD Director
ITD Board
(Audit Committee)
Principal Auditor
Principal Auditor *

3. ITD Office of Internal Review*
07/16/96
ITD Office of Internal Review
Internal Review conducts independent reviews to assess the effectiveness, compliance, and efficiency of department programs, procedures, and internal controls (GAGAS compliant)
Internal Review reviews records and financial reports for certain third parties contracting and sub granting with ITD *

4. Internal Review Staff & Duties
Manager and five auditors
Both internal & external audits
Allocation of staff hours between internal & external
Management requests for non-audit services

5. Audit and Review Work Plan*
07/16/96
Audit and Review Work Plan
Based upon Audit Risk Assessment
Criteria
Management Need
Date of Last Audit
Amount of Monies involved
Inherent Control Risk *

7. Risk Assessment Process
Process begins mid-Dec
Review running list of audit requests
Meet with executive management
Meet with FHWA
Add new requests to running list
Rate high, medium and low risk

8. IR Audit Risk Assessment
Top 5-7 high risk projects
IR Audit Risk Assessment Template
Assess level of risk for each project

9. Internal Audit Risk Assessment
Criteria
Weight
Factor Value
Extension
Dollar Impact 5
>$ 10 mil.
$ 5 mil. approximately 3
<$100 K 1
Federal Responsibility/Requirement
Importance of Federal Regulations to this Program – Degree (5-0)
Public Impact
Degree (5-0)
Prior Audit Performed (by IR, Legislative Auditor, FHWA)
>5 Years
Within 2 Years -2
Past 12 Months -5
Management Need/Request
Within 6 Months
No Hurry

10. Internal Audit Risk Assessment (cont.)
Inherent Risk Factor 3
Potential for Irregularity or Fraud – Degree (5-0)
Internal Controls/Administrative Controls
Degree (5-0) (Very strong = 0; Very weak = 5)
Legal Responsibility/Requirement
Degree (5-0)
Department Impact
Reported Audit Problems on Most Recent Audit
Potential Efficiency Improvement 2
Audit Time Estimate 1
<10 Man-Weeks 5
>60 Man-Weeks
Total Audit Risk Value

11. Internal Review Audit Coverage*
07/16/96
Internal Review Audit Coverage
2009
2010
2011
2012
2013
2014
Division of Motor Vehicles X
Division of Transportation Performance
Division of Aeronautics
Division of Highways
Division of Administration
Division of Human Resources *

12. Audit Plan Development
Hours required for an Internal Audit
Staff availability hours
External audit hours
Resulting Internal Audit hours available
Audit work plan

13. Estimate Time Required (Internal Audits)
Formula: Take top 3-4 and estimate time required Planning: 4 weeks Field Work: 8–12 weeks (complexity, travel, etc.) Wrap-up: 4 weeks Total: 16 – 20 weeks (team lead) 16 weeks x 40 hours/week = 640 hrs. 20 weeks x 40 hours/week = 800 hrs. Team member: 320–400 hrs. (1/2 time) Thus, each internal audit time estimate: 960–1200 hrs.

14. Estimate Staff Availability
5 2,080 hours 10,400 Less vacation & 200 ea. 1,000 Less 50 ea. 250 Net 9,150 Lost productivity (20%) 1,830 Estimated available time 7,320 (Not an exact science!)

15. External Audits
Need to deduct from staff availability (high est.) 40 Pre-award reviews hours ea. 1, Overhead rate reviews hours ea. 1, Cognizant hrs Post hrs hrs. 160 Total 3,680

16. Internal Audits - Staff Availability
Estimated available staff hrs. 7,320 Less: Est. external audits 3,680 Est. FHWA joint audits 160 Available time for internal audits & non-audit services 3,480 (about 2-3 internal audits)

17. Audit Work Plan
Key:

18. Audit Work Plan (cont.)

19. Audit Work Plan (cont.)

20. Annual Report to the Board
Panel presentation – all auditors
Last year’s audits and reviews (Internal, external & non-audit services)
Each auditor speaks 1-2 mins. on a particular audit/review or effort involved in
Audit and review work plan for current year (Internal, external and non-audit services)

21. Audit Resolution Log Prior audit recommendations
Audit Resolution Committee meets quarterly
Requests status updates
Update audit resolution log
Audit Mgr. presents to Executive Team

22. Summary Risk Assessment Process Audit Work Plan
Audit Resolution Follow Up

23. Office of Internal Review Thank You/Questions*
07/16/96
Office of Internal Review Thank You/Questions *

24. Contact Information
Sandra Healy, CGFM Principal Auditor Idaho Transportation Department Office of Internal Review 3311 W State St Boise, ID