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United States ArmyUnited States ArmyInternal Review ProgramInternal Review Program

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Local Solutions to Local ProblemsLocal Solutions to Local Problems

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Internal Review is a Internal Review is a Command and Control Command and Control

Function!Function!

Reports directly to Reports directly to the Commander, the Commander, Principal Deputy Principal Deputy Commander or, Commander or, Chief of StaffChief of Staff

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is the ultimate management is the ultimate management control for it enables control for it enables

management to evaluate management to evaluate all other controls.all other controls.

Internal Internal AuditAudit

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HistoryHistory

• IR grew out of command’s needs to IR grew out of command’s needs to maintain accountability.maintain accountability.

• 1946 - IR spaces pulled into HQDA 1946 - IR spaces pulled into HQDA to form US Army Audit Agency.to form US Army Audit Agency.

• 1947 - Commanders reestablish 1947 - Commanders reestablish IR to solve problems locally.IR to solve problems locally.

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Historical EventsHistorical Events• 1947 - 19831947 - 1983 - Local problem solving/ - Local problem solving/

accountability reviews - No standards accountability reviews - No standards employedemployed

• 1980’s1980’s - “Professionalized” - “Professionalized”

• 19831983 - Removed from RM to assure - Removed from RM to assure independenceindependence

• 19931993 - IR supports Desert Shield/Storm - IR supports Desert Shield/Storm

• 19971997 - ASA(FM&C) Rejects Command - ASA(FM&C) Rejects Command Audit (FORSCOM)Audit (FORSCOM)

• 1990’s1990’s - Reengineered program - Reengineered program

• 19991999 - Additional Skill Identifier - Additional Skill Identifier

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OverviewOverview

CustomersCustomers – Local CommanderLocal Commander

– Commander’s StaffCommander’s Staff

– Tenant Commanders/ManagersTenant Commanders/Managers

LocationLocation– Owned by Local CommandersOwned by Local Commanders

– Installation, MSC, MACOMs, DA Staff Installation, MSC, MACOMs, DA Staff levelslevels

– Active Component, Guard, ReservesActive Component, Guard, Reserves

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IR Satisfies NPRIR Satisfies NPR“Consider for a moment the frustration

and the vulnerability of an agency head who wishes to look quickly at an emerging financial problem, but has to wait until it has grown into a scandal because the auditors are under someone else's control . . .”

“Therefore, managers need to create their own capacity to audit internal operations and ensure compliance. . .”

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NPR Audit GoalsNPR Audit Goals

Auditors “. . . should see their mission as not Auditors “. . . should see their mission as not only to identify problems, but to get them only to identify problems, but to get them solved.”solved.”

““. . . to maintain objectivity, . . . . . . to maintain objectivity, . . . recommendations must be viewed by recommendations must be viewed by program management as being free from program management as being free from outside influence.”outside influence.”

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By The NumbersBy The Numbers

• 283 IR Offices Army-wide283 IR Offices Army-wide• Avg IR office staffing - 3 auditorsAvg IR office staffing - 3 auditors• Professional series - GS-511Professional series - GS-511

– Required 80 hours of CPE every two Required 80 hours of CPE every two yearsyears

– Training of IR auditors is a responsibility Training of IR auditors is a responsibility of The Auditor Generalof The Auditor General

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By The NumbersBy The Numbers• IR StaffingIR Staffing

– Authorized Spaces - 1,226Authorized Spaces - 1,226

– Assigned - 923 (75%)Assigned - 923 (75%)• Professionals Assigned - 840Professionals Assigned - 840

• Support Staff Assigned - 79Support Staff Assigned - 79

• Other - 4Other - 4

• Staff CompositionStaff Composition – Civilian - 736Civilian - 736

– Military - 187Military - 187• AC - 5AC - 5

• RC - 182RC - 182– Guard - 81, USAR 100, ODCSOPS - 1Guard - 81, USAR 100, ODCSOPS - 1

– Full-time - 749Full-time - 749 Part-time - 174Part-time - 174

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1402

843

0

250

500

750

1000

1250

1500

89 90 91 92 93 94 95 96 97 98 99

Staff ReductionsStaff Reductions

40%40%

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ServicesServices

• Formal (Full Scope) AuditsFormal (Full Scope) Audits

• Quick Response AuditsQuick Response Audits

• Consulting & Advisory ServicesConsulting & Advisory Services

• LiaisonLiaison

• Audit Compliance Audit Compliance & Follow-up& Follow-up

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Our mission is to provide a Our mission is to provide a professional internal audit capability professional internal audit capability and deliver pertinent, timely and and deliver pertinent, timely and reliable information and advice to reliable information and advice to Army leaders that:Army leaders that:

Evaluates risk Evaluates risk Assesses management Assesses management controlscontrols Improves quality, economy Improves quality, economy and and efficiencyefficiency Fosters stewardshipFosters stewardship

MISSIONMISSION

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Based on Strategic Plans (94, 96, 98)Based on Strategic Plans (94, 96, 98) Highly Successful!Highly Successful! PATs Led by IR Professionals!PATs Led by IR Professionals!

Quick Response AuditsQuick Response Audits ConsultingConsulting Quality ControlQuality Control PlanningPlanning ReportingReporting MarketingMarketing Performance MeasuresPerformance Measures

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As a world-wide community of professionals,As a world-wide community of professionals,

we meet the changing needs of the Armywe meet the changing needs of the Army

by providing by providing the most responsive, timely,the most responsive, timely,

and flexible internal audit and relatedand flexible internal audit and related

advisory services to Commanders.advisory services to Commanders.

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Be a valued member of the management Be a valued member of the management team team

Identify current and emerging needs of Identify current and emerging needs of customers customers

Deliver quality services that add value Deliver quality services that add value and meet or exceed customers’ and meet or exceed customers’ expectations expectations

Enhance IR staffs’ professional Enhance IR staffs’ professional capabilitiescapabilities

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WorkloadWorkload

23%

18%23%

19%

10% 7% Formal AuditQRAC&ASLiaisonFollow-upOther

+ 6%

+ 2%

- 1%

- 10%

+ 1%+ 2%

Change From 1998Change From 1998

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0500

10001500200025003000350040004500500055006000650070007500

90 91 92 93 94 95 96 97 98 99

ProductivityProductivity

EN

GA

GE

ME

NT

S

316% Increase

Since 1993

FY 90-99

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5.35.6

6.97.7

0

1

2

3

4

5

6

7

8

1996 1997 1998 1999

Productivity Per AuditorProductivity Per Auditor

R A T I O

Goal - Goal - 7 to 17 to 1

20

0

10

20

30

40

50

60

92 93 94 95 96 97 98 99

Production TimeProduction Time

Direct Auditor Days Per Engagement Have Been Reduced 74%

14.59

55.74

21

0

2

4

6

8

10

12

1996 1997 1998 1999

PM Goal

ISR PM Goal

Sustain a Return of Investment of Sustain a Return of Investment of at least 12 to 1 - 3 to 1at least 12 to 1 - 3 to 1

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501

399

309

250

0

100

200

300

400

500

600

1996 1997 1998 1999

Millions $$

Actual Savings ReportedActual Savings Reported

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CertificationsCertifications

265 273

0

50

100

150

200

250

300

1998 1999

CPACIACISACFECMACGFMOtherTotal

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3.6

3.8

4

4.2

4.4

4.6

4.8

FY 97FY 98FY 99FY 00

FY00 Customer Survey ResultsFY00 Customer Survey Results

IR Products and ServicesIR Products and Services

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3.4

3.6

3.8

4

4.2

4.4

4.6

4.8

No. Services KnowsNeeds

HS Pro's MC Tool Advice

FY 97

FY 98

FY 99

FY 00

FY00 Customer Survey ResultsFY00 Customer Survey Results

The IR OfficeThe IR Office

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3.4

3.6

3.8

4

4.2

4.4

4.6

4.8

Mgmt Team Interact Attitude Liaison Fair

FY 97

FY 98

FY 99

FY 00

FY00 Customer Survey ResultsFY00 Customer Survey ResultsInternal Review AuditorsInternal Review Auditors

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3.8

4

4.2

4.4

4.6

4.8

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Request Services Promote IR Standards

FY 97

FY 98

FY 99

FY 00

FY00 Customer Survey ResultsFY00 Customer Survey Results

In the future, I willIn the future, I will Support Support ProfessionalProfessional

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IR Training SymposiumIR Training Symposium

• Annual Training EventAnnual Training Event– 1 week1 week– 400 Attendees400 Attendees– 12,000 hours of CPE12,000 hours of CPE

• 21 - 25 August 200021 - 25 August 2000

• Scottsdale, AZScottsdale, AZ

• Host - AZ National GuardHost - AZ National Guard

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AgendaAgenda

• Keynote Address - Mrs. Keynote Address - Mrs.

• Future Needs - Future Needs -

• Digital Army of the Future - Col Digital Army of the Future - Col

• Control Self Assessment - IIAControl Self Assessment - IIA

• Out-of-the-Box Auditing - AKNGOut-of-the-Box Auditing - AKNG

• IRSG Update - John TempletonIRSG Update - John Templeton

• The Future of Business Technology - Intel CorpThe Future of Business Technology - Intel Corp

• Career Planning & Prof Dev - Career Planning & Prof Dev -

• Excellence Doesn’t Come Easy - Mr. Excellence Doesn’t Come Easy - Mr.

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BreakoutsBreakouts

• Control Self Assessment - Control Self Assessment - • CFO Auditing - CFO Auditing - • Fiscal Law - Fiscal Law - • Communications - Communications - • High Tech Auditing - High Tech Auditing -

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Awards BanquetAwards Banquet

• LTG Ballard - SpeakerLTG Ballard - Speaker

• Excellence in Auditing AwardsExcellence in Auditing Awards

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Where Do We Go Where Do We Go From Here?From Here?

• Continue to Offer a Full Array of Continue to Offer a Full Array of Professional Audit ServicesProfessional Audit Services

– Modeled after private sectorModeled after private sector

– Benchmarked Against Industry StandardsBenchmarked Against Industry Standards

• Strategic Planning PAT - May/June 2000Strategic Planning PAT - May/June 2000– Young auditorsYoung auditors

– Customers includedCustomers included

• Survive Army’s Cannibalistic Period????Survive Army’s Cannibalistic Period????