RISK ASSESSMENT PROCESS 3 ENTERPRISE AUDIT PLAN 6 FDOT AUDIT PLAN 7 DISTRIBUTION, PROJECT TEAM AND STATEMENT OF ACCORDANCE 12

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2 TABLE OF CONTENTS RISK ASSESSMENT PROCESS 3 ENTERPRISE AUDIT PLAN 6 FDOT AUDIT PLAN 7 DISTRIBUTION, PROJECT TEAM AND STATEMENT OF ACCORDANCE 12 -Audit Plan Page 2 of 12

3 RISK ASSESSMENT PROCESS Both Florida Statutes 1 and professional audit standards 2 require the OIG to develop risk-based annual and long-term audit plans which consider resource requirements and input from senior management. We developed our Audit Plan by following the Institute of Internal Auditors eight-step risk assessment process. First, we defined our audit universe by using the eleven program components that are used for budget purposes. 1. Pre-Construction/Design Services 2. Material Testing and Research 3. Right-of-Way Acquisition 4. Public Transportation 5. Planning and Environment 6. Law Enforcement 7. Traffic Operations 8. Toll Operations 9. Operations/Maintenance 10. Executive Leadership/Support Services 11. Information Technology Next, we conducted 32 interviews with senior management from the eleven program components, each District Secretary and each Assistant Secretary. In each interview we asked senior management to identify their major risks and areas of concern and for input on possible audit topics. Each program component was weighted against eight risk factors. Using a scale of 1-10 (1=low risk and 10=high risk), we (OIG) scored four of the risk factors (FTEs, budget, employee survey results, prior audit coverage) based on information we obtained. Next, we asked senior management to score the other four risk factors (degree of change or stability, complexity of operations, performance measures, procedures) based on their knowledge of their program area. (Steps 3,4,5) Information gathered during the risk assessment meetings and from audit staff input was collected by program component. The information was reviewed to identify auditable topics. Each auditable topic was assessed its weighted risk score based on the program component. We prioritized each audit topic within the program component. We then averaged the risk score with the priority. (Steps 6,7) As a result of this process, 17 potential audit topics were identified. The table below lists the topics in risk-ranked order. 1 Section (5)(i), Florida Statutes 2 The Institute of Internal Auditor s International Professional Practices Framework Standard 2010.A1 -Audit Plan Page 3 of 12

4 FY Topics Cost Recovery Topic Port of Miami Tunnel Right of Way Relocation Vegetation Management View Zones Performance Bonds Utility Relocation Reimbursement Process I-4/Selmon Expressway Connector SR 826 (Palmetto Expwy) and SR 836 (Dolphin Expwy) Interchange Ft. Lauderdale Airport Space Florida Seaports Contractor Prequalification Process Professional Service Contract Description Conduct a review of cost recoveries from several areas within the department (e.g., parking meters, logo program, lease back, cost recoveries from third parties due to damages) to determine areas of highest impact and conduct an audit of the highest identified opportunity. Conduct an audit regarding contract monitoring, invoicing and receipt of deliverables (interim examination). Excluding claims. Conduct a compliance and operational audit of the Right of Way program to include the department's processes and controls for right of way relocation and corresponding RWMS aspects. Conduct an advisory review of the vegetation management process to assess the adequacy of the policies and procedures to include appropriate mitigation for trees cleared in the view zone. Conduct an advisory review to determine if performance bonds are a cost effective control based on how many times they were used in the past. Identify any potential cost savings. Conduct a compliance and operational audit of the utility relocation reimbursement process in connection with road construction. Conduct a construction contract audit of I-4/Selmon Expressway connector. Review the supplemental agreements. Excluding claims. Conduct a construction contract audit of the State Road 826 and 836 interchange project. Conduct an audit of grant funding regarding contract monitoring, invoicing and receipt of deliverables (AP652). Conduct an audit of Space Florida grant funding regarding contract monitoring, invoicing and receipt of deliverables. Conduct two JPA audits regarding contract monitoring, invoicing and receipt of deliverables (Port of Manatee and Port of Palm Beach). Conduct an advisory review of the prequalification process to determine effectiveness and compliance of the process with rules/regulations including solvency determination. Conduct a consultant examination of a District Five professional services contract. -Audit Plan Page 4 of 12

5 Topic CSXT S Line CPA Working Paper Reviews Turnpike General Engineering Consultant Contract Intelligent Transportation Systems (ITS) Description Conduct a JPA audit of funds provided to CSX for upgrading the S Line to ensure contract monitoring, invoicing and receipt of deliverables. Conduct four CPA working paper reviews. Conduct two consultant contract audits focusing on the accuracy of the job cost accounting system. Conduct a compliance and operational audit of the hardware and software acquisition controls, access controls and effective monitoring of Internet use in the ITS environment. Based on the available number of hours, we placed the auditable topics into our shortterm Audit Plan. Anything that did not fit into our short-term Audit Plan was placed on our long-term Audit Plan. (Step 8) -Audit Plan Page 5 of 12

6 ENTERPRISE AUDIT PLAN The Governor s Chief Inspector General (CIG) asked agency inspectors general and audit directors to participate in the identification of potential enterprise audit topics by meeting with their agency heads and identifying areas of concern with an enterprise impact. Twenty-eight potential enterprise audit topics were identified and inspectors general along with audit directors were asked to participate in assessing risk associated with each of those potential projects. The group identified six topics for inclusion in the CIG Enterprise Audit Plan. Agency specific audit projects are addressed in the agency audit plans. To plan for both agency specific audit projects and enterprise projects, each agency inspector general was asked to allocate twenty percent of their direct audit hours to enterprise projects. Based on the results of the CIG risk assessment, the following areas were identified as enterprise priorities for Fiscal Year The selected enterprise projects cover administrative issues common to most state agencies and issues specific to agencies with a healthcare focus. FY Enterprise Audit Plan Audit Plan Project Type Assessment of Managed Care Organizations Anti-Fraud Processes Multi-agency Team 1 Background Screenings Enterprise Project 2 Computer Security Incident Response Teams Enterprise Project Cyber Security Disaster Recovery Plans at Shared Resource Centers Service Level Agreements with Shared Resource Centers Enterprise Project Multi-agency Team Multi-agency Team 1 Multi-agency Team projects will not involve all agencies but will address issues common to the participating agencies. 2 Enterprise projects will generally be completed by all agencies. We participated in planning and scoping the CIG enterprise audit topics. As requested, we budgeted twenty percent of our available audit resources (7,331 hours) for CIG enterprise audit projects. -Audit Plan Page 6 of 12

7 FLORIDA DEPARTMENT OF TRANSPORTATION AUDIT PLAN The goal for our Audit Plan is to provide broad audit coverage while focusing our resources on areas with the greatest known risks. We have dedicated resources to provide audit coverage of department expenditures. We have scheduled audits of contracts/agreements between the department and construction contractors, professional services consultants, seaports, airports, railroads, utility companies, expressway authorities, transit providers, local governments and others. The Audit section currently has 25 positions. Based on our analysis, staff members will be able to expend approximately 36,655 staff hours on audit plan engagements. Twenty percent of these hours (7,331 hours) will be dedicated to Enterprise Audit Plan projects which were derived from the CIG Enterprise Audit Plan. Another 4,300 hours are needed to complete ongoing projects initiated during the current fiscal year. These are for our carry forward projects. The remaining 25,024 hours will be programmed to new projects as outlined below. Some projects have to be completed every year (e.g., performance measure assessment). Certain projects included in our Audit Plan are scheduled due to recurring management requests (e.g., department and railroad billing rate audits). A portion of the Audit Plan (20%) is reserved for management requests. The balance of our audit resources will be used to address audit topics identified through our risk assessment meetings. Our Audit Plan is subject to change as management priorities change and new risks are identified. The tables on the following pages provide the Audit Plan and the Long Term Audit Plan. We have listed the Audit Plan projects by Audit Unit and have included the criteria for inclusion of each project in the plan. Items included by virtue of the department s risk assessment are displayed in red text. Items included from the CIG Enterprise Audit Plan are in blue text. -Audit Plan Page 7 of 12

8 FY Audit Plan With Selection Criteria Performance and Information Technology Audit Audit Plan Project Selection Criteria ARRA Transparency, ARRA Reporting and Dashboard Accountability and Oversight Blue Coat Reporting Computer Forensics Management Request Cost Recovery Assessment Data Mining Projects Forensic Lab Maintenance Intelligent Transportation Systems Office of Information Systems Team Meetings Payment Card Industry Standards - Performance Measures Statutory Compliance Procedure Reviews Right of Way (Relocation) Vegetation Management View Zones CIG Enterprise Audits CIG Enterprise Audit Plan Completion of Audit Carry Forwards Plan Projects -Audit Plan Page 8 of 12

9 Intermodal Audit ARRA Reporting and Dashboard Audit Plan With Selection Criteria Audit Plan Project Aviation Projects Ft. Lauderdale Airport - District Four JPA AP652 SpaceFlorida Grant -District Five Department Rates (Fringe Benefit & Indirect Rate) Rail Operations/Projects CSXT - S Line Central Rail Office CSXT Rate Florida East Coast Railroad - District Six JPA ANO51 Florida East Coast Railroad Rate Port of Miami Tunnel Seaport Projects Port of Manatee - District Seven JPA AO819 Port of Palm Beach - District Four JPA AO525 Single Audit Liaison Monitoring and Oversight Automated System Maintenance Training District Compliance Reviews Central Office Saftey Office Central Office Public Transportation Office District Two District Three District Five Transit Project - SunRail District Five Utility Certification Utility Relocation Reimbursement Process Audit Procedure Reviews Enterprise Audits Carry Forwards Selection Criteria ARRA Transparency, Accountability and Oversight Recurring Management Request - Comptroller Recurring Management Request - State Rail Manager Recurring Management Request - State Rail Manager CIG - Enterprise Audit Plan Completion of Audit Plan Projects -Audit Plan Page 9 of 12

10 FY Audit Plan With Selection Criteria Contract Audit Audit Plan Project Selection Criteria Asset Maintenance Contract Construction Reviews (includes Contract Modifications and Claims) District One - Contract T1322 District Four - Contract E4K49 District Five - Contract E5L71 District Six - Contract T6190 Consultant Contract Audits (Professional Services) District Seven - Contract C8X47 - Gannett Fleming District Five - Contract C8S73 - Corzo Castella Carballo District Four - Contract C8J97 - Transystem Corp. District Two - Contract C8Y07 - JEA Construction Engineering Consultant CPA Work Paper Reviews District Two - Contract C8P39 - AMEC Environment & Infrastructure District Seven - Contract C8J68 - Faller, Davis & Assoc. District One - Contract C8V38 - WilsonMiller Inc. District One - Contract C Bowyer-Singleton & Assoc. Contractor Prequalification Process Cost Recovery Other Contract Reviews/Audits Performance Bonds Port of Miami Tunnel Private Public Partnership Reviews Selmon Expwy to I4 Connector - Contract T7209 SR 826/836 Interchange in D6 - Contract E6F61 Turnpike General Engineering Consultant Contract - C8Q53 Atkins and C8Q39 HNTB Corporation Procedure Reviews Enterprise Audits CIG - Enterprise Audit Plan Completion of Audit Carry Forwards Plan Projects -Audit Plan Page 10 of 12

11 FY Long-Term Audit Plan Outdoor Advertising Program (ROW) Reporting System (Safety) AEIT Work Program Core Business Processing Laboratory Information Management System (LIMS) Re-write Project Sunrail Contract Audits CEI Inspections Conversion of Maintenance Yard to Asset Maintenance Contracts Tri-Rail Pass Thru Operating Funds Future Cost Recovery Audits Design-Build Process Weigh Station Pay Differentials Effectiveness -Audit Plan Page 11 of 12

12 DISTRIBUTION, PROJECT TEAM AND STATEMENT OF ACCORDANCE Action Official Distribution: Approved by: Ananth Prasad, P.E., Secretary Information Distribution: Brain Blanchard, Assistant Secretary for Engineering and Operations Brian Peters, Assistant Secretary for Finance and Administration Richard Biter, Assistant Secretary for Intermodal Systems Development Francis Gibbs, Chief of Staff Melinda M. Miguel, Chief Inspector General, Executive Office of the Governor Project Team: Project was conducted by Patricia Phillips and Amy Furney Under the supervision of: Sarah Beth Hall, Deputy Director of Audit Submitted by: Robert E. Clift, Inspector General Statement of Accordance The mission of the department is to provide a safe transportation system that ensures the mobility of people and goods, enhances economic prosperity, and preserves the quality of our environment and communities. The mission of the Office of Inspector General is to promote integrity, accountability and process improvement in the Department of Transportation by providing objective fact-based assessments to the DOT team. This work product was prepared pursuant to Section , Florida Statutes, in accordance with the applicable Principles and Standards for Offices of Inspectors General as published by the Association of Inspectors General and the International Standards for the Professional Practice of Internal Auditing as published by the Institute of Internal Auditors, Inc. This report is intended for the use of the agency to which it was disseminated and may contain information that is exempt from disclosure under applicable law. Do not release without prior coordination with the Office of Inspector General. Please address inquiries regarding this report to the department s Office of Inspector General at (850) Audit Plan Page 12 of 12

ANNUAL AUDIT PLAN FISCAL YEAR

Florida Department of Juvenile Justice ANNUAL AUDIT PLAN FISCAL YEAR 2014 2015 Robert A. Munson, CIG Inspector General Michael Yu, CIA, CIG Director of Auditing Wansley Walters, SECRETARY TABLE OF CONTENTS