Scandal and Headlines Could it Happen to Your Facilities - PowerPoint PPT Presentation

Questions to Ask • Do our staff and customers understand what constitutes billable and non-billable work? Do we have a published schedule of services and rates? APPA • Boston • 2010 New Mexico State University (36)

Questions to Ask • Are markups and shop labor rates developed in accordance with Office of Management and Budget A21 Guidelines and periodically reviewed by the appropriate central administrative unit? APPA • Boston • 2010 New Mexico State University (37)

Questions to Ask • Do we have clear procedures about callouts, scheduled overtime, and overtime approvals? Is there a method in place to conduct spot checks of hours worked? APPA • Boston • 2010 New Mexico State University (38)

Questions to Ask • Are there guidelines in place regarding vendor relations? APPA • Boston • 2010 New Mexico State University (39)

Questions to Ask • Do we have an established process to encourage confidential reporting? Is it publicized? APPA • Boston • 2010 New Mexico State University (40)

Financial Controls and Reports APPA • Boston • 2010 New Mexico State University (41)

Accounting Controls & Management Reporting • Risk management and risk assessment processes help focus efforts and prioritize – High level financial overview to identify target areas – Weaknesses and deficiencies are often consistent in other areas APPA • Boston • 2010 New Mexico State University (42)

Accounting Controls & Management Reporting • Control Environment - The overall control tone of the organization – What is management’s operating philosophy and is it practiced? APPA • Boston • 2010 New Mexico State University (43)

Accounting Controls & Management Reporting • Risk Assessment - The process used to identify, measure, evaluate, and prioritize risks that may affect an organization’s ability to achieve established objectives. – Have agreed upon goals and objectives been established? APPA • Boston • 2010 New Mexico State University (44)

Accounting Controls & Management Reporting • Control Activities - The policies and procedures established to assist in accomplishing objectives – Is the acceptable level of risk identified? – Are the checks and balances sufficient? APPA • Boston • 2010 New Mexico State University (45)

Accounting Controls & Management Reporting • Information & Communication - Provides for the identification, establishment and delivery of information and data to assist in accomplishing objectives – Do employees have all the information they need to do their jobs? APPA • Boston • 2010 New Mexico State University (46)

Accounting Controls & Management Reporting • Monitoring - The process of assessing the quality and effectiveness of the established internal controls. – Are the established controls working as intended? APPA • Boston • 2010 New Mexico State University (47)

Accounting Controls & Reporting • Visible support and changes • Established a foundation • Demonstrated commitment to accountability and ethics • Opened facilities “ operational doors ” • Set the “ tone at the top ” APPA • Boston • 2010 New Mexico State University (48)

Leadership & Culture Change APPA • Boston • 2010 New Mexico State University (49)

Organizational Culture • How the organization functions • How things get done • Must understand it first APPA • Boston • 2010 New Mexico State University (50)

Culture Change & Entitlement APPA • Boston • 2010 New Mexico State University (51)

Culture Change • Starts at the top • Need to know where you’re going • Review organizational structure • Selection and evaluations • Mission and value statements APPA • Boston • 2010 New Mexico State University (52)

Culture Change • Be patient • Remember the ‘tipping point’ – the levels at which the momentum for change becomes unstoppable ( Bryan Walsh ) – Term first coined by Morton Grodzins • Communications and Communications APPA • Boston • 2010 New Mexico State University (53)

Sense of Entitlement • It starts with you! • Develop accurate perceptions of management goals and behaviors • Facilities is in a position to be a campus leader APPA • Boston • 2010 New Mexico State University (54)

Accountability • Procedures • Financial controls and reports • Leadership = ACCOUNTABILITY APPA • Boston • 2010 New Mexico State University (55)

Accountability APPA • Boston • 2010 New Mexico State University (56)

Questions? APPA • Boston • 2010 New Mexico State University (57)

Leadership • #1 value in study after study - T RUST O UR L EADERS TO DO THE RIGHT THING APPA • Boston • 2010 New Mexico State University (58)

Thank You! Angela Throneberry athroneb@nmsu.edu Glen Haubold ghaubold@nmsu.edu APPA • Boston • 2010 New Mexico State University (59)

The Accountant and the Engineer Angela Throneberry Glen Haubold

Presenters  Angela Throneberry Associate Vice President of Business, Finance, and Human Resources  Glen Haubold Assistant Vice President of Facilities and Services (2)

Learning Outcomes  Use metrics and comparative data to measure organizational performance and identify areas for improvement (3)

Learning Outcomes  Discuss approaches to initiating culture change (4)

Learning Outcomes  Ideas and actions to combat that pervasive sense of entitlement that leads to the rationalization for theft and fraud  Questions to ask of your Facilities organization (5)

Personal Note  You shouldn’t wonder if scandal is possible  Rather, is the level of risk acceptable? (6)

What the engineers think (7)

What the accountants think (8)

Learning Outcome #1  It’s much easier and a lot less painful to conduct an internal audit than to read about it in the newspapers  Must work together to accomplish this goal (9)

NMSU  New Mexico’s land grant institution  Groundbreaking research in biosciences, natural resources, aerospace, information sciences and U.S.-Mexico border development (10)

NMSU Demographics  97th out of 657 institutions in terms of federal research and development (11)

NMSU Demographics  NMSU FY2010 -  $612 million operating funds FY 2010  $84 million capital outlay FY 2010 (12)

Headcount by Campus Students Faculty Staff Alamogordo 3,474 125 138 Carlsbad 1,998 92 110 Doña Ana 8,796 415 286 Grants 1,385 65 45 Las Cruces 18,497 1,215 3,360 NMSU Unduplicated Student Headcount 29,468 (13)

NMSU  NMSU football team  Western Athletic Conference (WAC)  Won 3 Lost 10 (14)

Facilities Demographics  288 buildings  3,106,670 Institutional & General sq ft  5,283,294 sq ft including Auxiliaries  1,125 acres  425 maintained acres (15)

Facilities Demographics  230 + staff in Operations and Maintenance  300 total FTE in Facilities  $12 million operating  $5 million recovery / reimbursable  $5 million deferred maintenance (BRR) (16)

Allegations  Timekeeping abuse  Supervisor / employee collusion  Excessive overtime  Personal use of equipment and materials (17)

Allegations  Project cost overruns  Rate issues  Tied in with OT abuse  Excess materials (18)

How was the behavior discovered?  Whistleblower  Elevated to the President (19)

Headlines  Played out in newspaper  Campus focus (20)

A question:  Could it happen in my organization?  Is it happening already? (21)

The question:  Will I have the information I need to hold people accountable when I find out?  And how will I find out? (22)

Areas for improvement  Management by memo  Strayed from core mission  Inadequate reports  Absence of checks and balances  “The way we’ve always done it” (23)

Targeted Areas  Procedures  Financial controls and reports  Leadership (24)

Procedures If you think it’s expensive to hire a professional (25)

Procedures Wait until you hire an amateur - Red Adair (26)

Procedures  Procedures should be clearly stated in writing, systematically organized, and properly approved  Or is management by memo used?  Is review process adequate?  Are they adequately maintained and updated? (27)

Procedures  Procedures should be systematically communicated to all officials and appropriate employees of the organization  Are they accessible?  Do you discuss in staff meetings?  Are they understood? (28)

Procedures  Procedures must incorporate Internal Controls  Coordinate so one employee’s work is checked by another performing separate prescribed duties  Call out verification by plant  Business office overtime checks  Utilize central support services (29)

Procedure Checklist  Procurement of supplies through the warehouse and the procurement system?  Regular inventories of small tools and shop stock?  Procurement card, fuel card, and petty cash purchases?  Is physical security of assets adequate? (30)

Procedure Checklist  Intra- and inter-departmental use of equipment?  Job estimation and planning?  Operation of the Work Order System including defined administrative and security roles? A written procedure for adjustments? (31)

Procedure Checklist  Employee and supervisor review of timesheets?  The use of cell phones and the operation of vehicles?  Conflict of interest and outside employment? (32)

Questions to Ask  Are frequent, documented, training and review sessions conducted? (33)

Questions to Ask  Are management and supervisor reports appropriately distributed and employees properly trained on how to use the information? (34)

Questions to Ask  Is everyone clear about timekeeping and how travel time, training, and “shop time” are calculated on work orders and billed? (35)

Questions to Ask  Is our organization consistent with how projects funded through state appropriations and with research grants are billed for work?  How do you verify? (36)

Questions to Ask  Do our staff and customers understand what constitutes billable and non-billable work? Do we have a published schedule of services and rates? (37)

Questions to Ask  Are markups and shop labor rates developed in accordance with Office of Management and Budget A21 Guidelines and periodically reviewed by the appropriate central administrative unit? (38)

Questions to Ask  Do we have clear procedures about callouts, scheduled overtime, and overtime approvals? Is there a method in place to conduct spot checks of hours worked? (39)

Questions to Ask  Are there guidelines in place regarding vendor relations? (40)

Questions to Ask  Do we have an established process to encourage confidential reporting? Is it publicized? (41)