LLNL AUDIT PLAN
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LLNL AUDIT PLAN

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UNIVERSITY OF CALIFORNIAINTERNAL AUDIT PLAN2001 NARRATIVE & ASSUMPTIONS(Lawrence Livermore National Laboratory)______________________________________________________________________________1. Available Hours—The FY 2001 Annual Audit Plan is based on 15,600 available hours (7.5FTE’s). The FTE total is comprised of 6.0 FTE internal auditors, 1 FTE Audit Manager, and.5 FTE A&O Director. This represents an increase of .5 FTE over last year. 2. Indirect Hours—The total budgeted indirect charge percentage is 14.86%, which is underthe UCOP Guideline of 15.00%. No unusual variances are anticipated. Professionaldevelopment for Laboratory planning purposes includes training hours specific to theLaboratory, the DOE, and other specialized training that may not be typically acquired as CPEfor purposes of meeting professional standards and certification requirements. Therefore,hours budgeted in this category exceed a minimum standard of 40 hours per staff member.Audit management time is allocated evenly to direct and indirect hours at the same rate ascharged by the audit staff.3. Audit Program—63.50% of Total Net Available Hours are allocated to this years auditprogram. Audit topics are primarily composed of high-risk audit topics compiled from thisyear's risk assessment exercise. Six of the top ten high risk audit topics, and seven of the nexttop ten high risk ranked audit topics are covered in this year’s audit plan. Four of theremaining top ten, and two ...

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UNIVERSITY OF CALIFORNIA
INTERNAL AUDIT PLAN
2001 NARRATIVE & ASSUMPTIONS
(Lawrence Livermore National Laboratory)
______________________________________________________________________________
1.
Available Hours—
The FY 2001 Annual Audit Plan is based on 15,600 available hours (7.5
FTE’s).
The FTE total is comprised of 6.0 FTE internal auditors, 1 FTE Audit Manager, and
.5 FTE A&O Director.
This represents an increase of .5 FTE over last year.
2.
Indirect Hours—
The total budgeted indirect charge percentage is 14.86%, which is under
the UCOP Guideline of 15.00%.
No unusual variances are anticipated.
Professional
development for Laboratory planning purposes includes training hours specific to the
Laboratory, the DOE, and other specialized training that may not be typically acquired as CPE
for purposes of meeting professional standards and certification requirements. Therefore,
hours budgeted in this category exceed a minimum standard of 40 hours per staff member.
Audit management time is allocated evenly to direct and indirect hours at the same rate as
charged by the audit staff.
3.
Audit Program—
63.50% of Total Net Available Hours are allocated to this years audit
program.
Audit topics are primarily composed of high-risk audit topics compiled from this
year's risk assessment exercise.
Six of the top ten high risk audit topics, and seven of the next
top ten high risk ranked audit topics are covered in this year’s audit plan.
Four of the
remaining top ten, and two of the remaining next top ten audits were either in progress at the
time of this plan submission or recently completed.
This year, we will not be required to
perform the CFO Payroll audit as was mandated in the past by the OIG.
However, we will
continue to perform the mandated Cost Allowability audit.
We are confident that this year’s
risk assessment exercise provides a reliable identification of high-risk areas.
For FY 2001,
time devoted to Planned Carryforward Audits, work in progress at year end (4.10%) is
significantly lower than amounts reported in last year’s plan.
Accordingly, this year’s plan
reports an increase in time devoted to Planned Audits – Current Year (50.70%) over last year.
Supplemental Audits represents (8.70%) of net available hours.
Reducing audit budgets for
audits has increased breadth of coverage in this year’s plan.
We plan to continue use of
facilitation in our audits to generate project risk assessments, focus on business objectives,
improve audit planning and scoping, and shorten audit reports.
This year, one full FTE has
been allocated for IT audit topics.
This is an increase of .5 FTE’s over last year.
In addition,
we plan to rely to a greater extent on integrated auditing performed by general internal
auditors.
One information systems audit topic ranked as high risk has been included in our
plan.
We will assess the need to adjust the plan should we receive any requests during the
year from the DOE, OIG, Laboratory management, or UCOP exceeding this level.
4.
Advisory Services— Advisory Services, Investigations, and External Audit
Coordination—
The percentage of time devoted to Advisory Services has decreased slightly
from last year to 12.22% of net available hours.
It is anticipated that effort in this category
will be divided among three primary areas: support of the Appendix F – Self-Assessment
Program; support of internal systems development and reengineering initiatives; and
performance of CRSA workshops.
5.
Investigations—
N/A
6.
Support Activities—
The percentage of time budgeted for Support Activities (9.42%) is a
slight increase over last year.
The largest component of this category is Audit Planning,
composed primarily of the annual risk assessment exercise.
This year, we will be conducting a
comprehensive risk assessment, including facilitated workshops and email surveys.
Time has
also been allocated to: (1) Audit Committee Support, to reflect time anticipated for the newly
formed Laboratory Internal Audit Working Group; (2) Systemwide Audit Support, to reflect
anticipated participation on University work groups; (3) Computer Support, for maintenance
of our systems hardware and software; and (4) Quality Assurance, in anticipation of
participation of UC and DOE Peer Reviews.
In addition, the Audit Manager has been re-
elected to serve on the DOE Contractor Audit Managers Professional Standards Sub-
Committee.
7.
Total Direct Hours & Percent—
This year’s annual plan reflects an 85.14% direct hour
charge percentage, slightly exceeding the 85.00% UCOP Guidance, but slightly lower than
last year.
To emphasize our commitment to meeting the audit plan, each auditor is assigned a
direct hour charge rate.
Each auditor is also expected to maintain projects within amounts
budgeted, both hours and schedule.
These metrics are used for the purposes of evaluating
employee performance.
8.
Time Phasing Assumptions—
Time phasing was used where possible.
Holidays were spread
according to local schedule, and sick leave and vacation were spread based on anticipated
usage; i.e., higher sick leave usage in winter and spring months, with more vacation devoted
to summer and winter months.
Special Project time planned for the Laboratory Appendix F –
Self-Assessment project was time phased to correspond with the actual schedule, during the
summer months.
Audit planning was also time phased to the 2
nd
and 3
rd
quarter of the
Laboratory fiscal year.
Planned Carryforward Audit hours were allocated to the 1
st
and 2
nd
quarter of the Laboratory fiscal year.
Lastly, Professional Development hours were time
phased to account for the All-Auditors Conference in the 1
st
quarter of the Laboratory fiscal
year.
Direct audit plan hours by quarter was the byproduct of actual available hours by
quarter, less time allocated/time phased to all other categories by quarter.
9.
Other Matters—
A major obstacle for the Laboratory in completing the plan as submitted is
timing and response to external drivers.
Submitting the plan five and a half months in advance
of the fiscal year makes it difficult to predict with any reasonable level of certainty unforeseen
demands which may impact work on the plan.
In addition, we are uncertain at this time about
the level of effort DOE and the OIG may place on us, in response to changing DOE
stewardship responsibilities and OIG participation in CFO financial auditing.
Internally, the
Laboratory is committed to reducing general & administrative costs, which impacts our ability
to filling open vacancies and generally translates to doing more with less. While we anticipate
devoting audit resources to all audits included in this plan, we also recognize that
circumstances beyond our control could result in audit schedule “slippage.”
As such, our goal
is to have fully completed at least 80% of all planned topics by fiscal year-end, with the
remaining topics in progress at year-end.
In addition, this year’s audit plan topics were
identified at a relatively high level (Tier 3).
To complete the breadth of coverage called for in
this plan, we will be focusing on selected operational and business risks within each topic and
will not be providing assurances of topic coverage as a whole.
As this plan demonstrates, we
are committed to scoping down our audits and focusing on only the most significant risks that
can be covered within the available budget hours.
We anticipate a shift in our traditional audit
approach with more emphasis on up front planning and facilitated risk assessment to identify
only those areas worthy of audit testing.
Accordingly, we expect audit testing to be
optimized.
This year’s audit plan is a stretch goal, predicated on our ability to change our
traditional auditing approach paradigm.
UNIVERSITY OF CALIFORNIA
SCHEDULE 1
INTERNAL AUDIT PERSONNEL
FY 2001
LLNL
I.
Authorized Personnel
Profess.
Admin.
Total
Number of Authorized Personne
7.5
1
8.5
(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
0.5
1
6
7.5
Anticiapated Additions**
Estimated Separations**
End of Period
0.5
1
6
7.5
*
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**
7.5
7.5
7.5
7.5
7.5
Hours in the period
2080
520
520
520
520
Sub-Total
15600
3900
3900
3900
3900
Other Resources:
Overtime
Contract Labor/Interns
Recharge In or (Out)
Admin. & Other
Sub-Total
0
0
0
0
0
Gross Available Hours
15600
3900
3900
3900
3900
Less Non-Controllable Hours
2549
825
611
532
581
Non-Controllable Percent
Total Net Available Hours
(1)
13051
3075
3289
3368
3319
(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
LLNL
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%
9.80%
1279
340
315
315
309
Professional Development
2--5%
5.06%
660
200
145
155
160
Other
0--3%
Total Indirect Hours
1939
540
460
470
469
Total Indirect Percent
15%
14.86%
14.86%
17.56%
13.99%
13.95%
14.13%
Direct Hours
Audit Program
Planned Audits - Current Year
6613
1367
1745
1882
1619
Planned Carryforward Audits
540
440
100
0
0
Suppl. Audits - Current Year
10%
8.70%
1135
283
284
284
284
Total Audit Program
8288
2090
2129
2166
1903
Total Audit Percent
40--60%
63.50%
67.97%
64.73%
64.31%
57.34%
Advisory Services
Consultations/Spec. Projects
907
80
130
147
550
Systems Dev., Reengineering Teams, Etc.
353
80
90
90
93
Internal Control & Accountability
335
75
90
90
80
External Audit Coordination
IPA, COI & Other
Total Advisory Services
1595
235
310
327
723
Total Advisory Percent
10--25%
12.22%
7.64%
9.43%
9.71%
21.78%
Investigations--Hours
Investigations--Percent
10--20%
Audit Support Activities
Audit Planning
394
20
180
180
14
Audit Committee Support
200
60
60
40
40
Systemwide Audit Support
200
50
60
45
45
Computer Support
160
30
40
40
50
Quality Assurance
275
50
50
100
75
Total Audit Support
1229
210
390
405
224
Total Audit Support Percent
5--10%
9.42%
6.83%
11.86%
12.02%
6.75%
Total Direct Hours
11112
2535
2829
2898
2850
Total Direct Percent
85%
85.14%
85.14%
82.44%
86.01%
86.05%
85.87%
Total Net Available Hours
(1)
13051
3075
3289
3368
3319
Total Net Available Percent
(2)
100%
100.00%
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
INTERNAL AUDIT PLAN DETAIL
SCHEDULE 3
FY 2001
LLNL
High Risk?
Planned
Primary
Additional
Auditor
Mgmt
Name/Title of Audit
Yes or No
Hours
Index Code
Index Code(s)
Hours
ross-up (2
Carryover--(WIP)
Laboratory Safety Programs
H1
263 C.a.04
230
263
Energy Program Administration
H3 (H1 in PY)
277 J.a.00.11
242
277
Subtotal Carryover
540
New Audits
Travel
H1
487 E.e.04
425
487
National Security Office Administration
H1
516 J.a.00.16
450
516
Export Controls
H1
487 J.b.03
425
487
Utilities
H2
469 D.d.03
409
469
N Program Administration
H2
516 J.a.00.13.03
450
516
Compensation - Dual Appointments
H2
499 F.b.01
435
499
Accounts Payable - Disbursement Controls
H2
516 E.e.01
450
516
Recharge Activities - Job Order Cost
H2
602 E.k.06
525
602
Cost Allowability FY01
H3
401 J.b.05
350
401
Bank Account Administration and Reconciliation
H2
258 E.d.01
225
258
HR/Payroll Feeder System Linkage
H2
358 G.g.01.01.07
312
358
Accounts Payable System
H3
264 G.g.01.01.32
230
264
Reimbursables Systems Development (RWS)
H1
367 G.e.02.02
320
367
G/L Mass Allocation System Process
H3
373 G.g.01.03
324
372
Audit Followup
500
400
500
Subtotal New Audits
6613
Total Plan Audits
(1)
7153
Planned Advisory Services
0
(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.
1595
(1)
Must tie to "Planned Audits" on Attachment D (Schedule 2 - Allocation Worksheet)
(2) Management time is allocated to audit projects in arriving at Total Planned Hours using the following factors:
540 Total Planned Carryforward Audit Hours/ 472 Auditor Planned Carryforward Audit Hours
1.1441
6113 Total Planned Audit Hours - Current Year / 5330 Auditor Planned Audit Hours Current Year
1.1469
500 Total Auditor Followup Hours/400 Auditor Followup Hours
1.2500
LLNL Schedules 1 thru 4 Revised.xls7/24/00
UNIVERSITY OF CALIFORNIA
SCHEDULE 4
INTERNAL AUDIT PLAN STATISTICS
FY 2001
LLNL
Annual
I
Coverage of High Risk*
Hours
Number
Goal
In Planned:
Audits
2397
10 (1)
Advisory Services
Investigations
Total
2397
10 (1)
Percentage
N/A
100.00% 80--100%
*DEFINITION OF HIGH RISK
The highest 10 risk scores assigned at the local campus or laboratory.
II
Coverage of Next Tier Risks**
Hours
Number
In Planned:
Audits
2602
9 (2)
Advisory Services
Investigations
Total
26
9 (2)
Percentage
N/A
90.00%
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
24
0.34% (3)
B
Development & External Relations
0
0.00%
C
Environmental Safety and Security
351
4.91%
D
Facilities, Construction & Maintenance
504
7.05%
E
Financial Management
1981
27.69%
F
Human Resources & Benefits
523
7.31%
G
Information & Communications
1456
20.36%
H
Campus Research Departments & Instruction
0
0.00%
I
Health Sciences Research, Instruction & Clinical Service
0
0.00%
J
Lab Research Programs & Processes
2314
32.35%
K
Office of the President
0
0.00%
Total
7153 100.00%
Notes:
(1) 6 of 10 H1 audits were planned for FY01.
Of the other 4 H1 audits,
3 were in progress and 1 had recently been completed at the time of this plan submission (4/14/00)
(2) 7 of 10 H2 audits were planned for FY01.
Of the other 3 H2 audits,
1 was in progress, 1 had recently been completed at the time of this plan submission (4/14/00),
and the remaining was issued in FY98
(3) 1 audit within this category was in progress at the time of this plan submission (4/14/00)
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