INTERNAL AUDIT - FY15 COMPREHENSIVE AUDIT WORK PLAN STATUS UPDATE
Risk Rating Work Plan Progress Summary Total
High Total Projects Completed 0
Medium In Progress 13
Low Not Started 21
Total Projects 34
% of Plan Completed (% hours) 15%
New projects added to Original Plan 0
Project # Project Name Risk Rating Scope Status Planned Hours Actual Hours %
1
Capital Projects high
Review existing/new process and control designs collaboratively with Construction Procurement, Capital Projects, and Finance for sufficiency and adequacy for all phases of the construction project process to detect, prevent, and correct errors.
In Progress 1200 200 17%
2
Rehab Process Evaluation and Design medium
Collaborate with management to review existing/new Rehab process and control designs from the point of admission to discharge for effectiveness.
In Progress 250 120 48%
3
Operating Room ("OR") Inventory Management, Charge Capture, CDM, and Billing
high
Collaborate with the OR, Supply Chain, and Finance Administrative Team in reviewing the sufficiency of process and control designs currently in place or to be implemented to ensure they adequately and effectively address the operational, inventory, and charge capture deficiencies identified.
In Progress 500 100 20%
4
Cerner Upgrade project high
Review the sufficiency of process designs and control effectiveness to prevent, detect, and correct errors in production, and adequate training/education provided to staff prior to the implementation for each phase of the Cerner Upgrade.
In Progress 300 20 7%
5
ICD-10 high
Review the sufficiency of controls to prevent, detect, and correct coding errors in production, adequate training/education provided to physicians, and process efficiency exist to appropriately drop inpatient claims prior to the implementation of the new ICD-10 codes.
200 0%
6
Accounts Payable Process Enhancements medium
Assist management on an on-going basis in improving and enhancing the Accounts Payable process design efficiency and control effectiveness for processing vendor payments.
In Progress 150 40 27%
7
Corrections Health Service ("CHS") high
Collaborate with CHS management in reviewing the sufficiency of process and control designs currently in place or to be implemented to ensure they adequately and effectively address the clinical deficiencies identified. In addition, perform follow-up testing to ensure compliance with process design and effectiveness.
In Progress 300 4 1%
8
340B Discount Program high
Review process over the 340B program, including record maintenance and compliance with related regulations. In addition, perform data analysis for optimization and proper reporting (i.e. Cost Report). Subsequently, perform periodic self-analysis to validate patient and physician eligibility on dispensing, assess potential duplicate discounts, and price changes.
In Progress 400 140 35%
9
Denial Management medium
Collaborate with management to review existing/new denial failure points and root cause analysis to develop control points of remediation.
In Progress 400 100 25%
Active participation in JHS denial reduction committee to evaluate the life cycle of patient accounts for deficiencies and gaps for current state and assist management with root cause analysis/solution process mapping from a control perspective. Ensure that Corrections Health Service deficiencies identified by the Department of Justice ("DOJ") review were adequately addressed; if not, assist management from a control perspective in process design and self-testing for compliance with related laws and regulations.
Assist management from a control perspective to ensure compliance and optimization of the section 340B program requirements and restrictions of the Public Health Services Act. On-going collaboration with management to evaluate the Accounts Payable process design efficiency and control effectiveness for processing vendor payments.
as of 12/31/14
Definition
Impact to company's financial statements is considered material; non-financial risk, such as patient outcome, visibility and reputation, is considered high. Other considerations include significant change in management and/or process, and prior internal or external audit findings.
Process impact to company's financial statements may be material; other risk as described above is considered less significant.
Minimal risk to organization from either a financial or operational risk.
Ensure that the organization awareness, impact and communication of ICD-10 implementation standard requirements are met.
Objectives
Proactive oversight and involvement with management from a control perspective in all phases of the construction project process to ensure adequate sourcing, contract language, contracting, scope of work ("SOW") performance, and accounting exist to provide assurance over the expenditure of the miracle bond funds.
Active participation in JHS Rehab process evaluation of deficiencies and gaps for current state and assist management with root cause analysis/solution process mapping.
Assist management with the redesign of existing and/or creation of new process to effectively address controls deficiencies and process inefficiencies identified from prior audits and management self-assessment for the Operating Room ("OR") inventory management and charge capture processes. On-going involvement from a control perspective in the Cerner upgrade to ensure efficient process designs, effective controls, and adequate training is provided to users.
Project # Project Name Risk Rating Objectives Scope Status Planned Hours Actual Hours % 10
Transplant medium
Assess and evaluate current processes and controls and data capture related to organ acquisition in 2014 cost report.
250 0%
11
Graduate Medical Education & Indirect
Medical Education Payments medium
Assess and evaluate current processes and controls and data capture related to Graduate Medical Education & Indirect Medical Education Payments in 2014 cost report.
250 0%
12
Credentialing medium
Review current process to ensure compliance with related regulatory and contractual requirements, design efficiency and operational effectiveness.
250 0%
13
Surprise Cash Counts high
On a periodic basis, perform surprise cash counts to validate the accuracy of cash reported at various JHS locations.
150 99%
14
Emergency Procurement Rotation Process
Review medium
Perform a weekly review of all emergency procurement to evaluate adherence to the established emergency procurement vendor rotational policy and guidelines.
In Progress 120 60 50%
15
Purchase Orders Created After the Fact
Analysis medium
Perform a monthly analysis based on prior month's PO creation for invoice transaction activities to ensure purchasing compliance and address outliers based on trend analysis.
In Progress 120 40 33%
16
Financial Processes high
Perform a periodic review of the following financial processes:
A. Kronos and Lawson Comparison (Payroll Cycle Attribute testing)
1. Bank accounts should be unique to an employee
2. Footing information relating to the number of employees in the HR listing vs. number of employees in Payroll payout
3. Other attributes
B. AP review for potential duplicate payments and exceeding P.O. amount
C. Potential charge capture reconciliation (Outpatient/ Inpatient)
D. Capital Requisition vs. Traditional Requisition financial criteria review
In Progress 600 80 13%
17
Pharmacy Drug Override Process Review - ED/ER high
In collaboration with the Pharmacy department, develop periodic reports to review trend analysis and outliers for potential detection of drug diversion. Specifically, reviewing segregation of duties, proper approvals, and dispensing trend of controlled substance.
300 0%
18
Grants Review medium
Perform random reviews in conjunction with the Grants department of significant grants to ensure adherence to grant agreement, compliance, and regulatory guidelines.
100 0%
19
Balanced Scorecard Initiative high
Periodically assist management with the compilation and review of metrics/criteria ensuring that data and methodology for measurements are consistent with regulatory requirements, operational and strategic objectives.
In Progress 600 8 1%
20
Physician Billing and Collections medium
Review JMG physician billing process to ensure effectiveness, including the McKesson billing process, medical records, coding, collections process, and recording of transactions in G/L.
300 0%
21
Charge Description Master (CDM)
Maintenance high
Review controls related to the CDM update and maintenance process including use of generic/miscellaneous CDM numbers, creation of new CDM, and product markup calculations.
300 0%
Ensure that adequate processes and controls are in place to update and maintain the CDM.
Determine compliance with JHS financial process design and effectiveness based on trend analysis.
Determine whether processes surrounding federal and state grants are appropriate and effective to meet federal and state regulations guidelines.
Assist management with developing and compiling metrics/criteria for new strategic initiatives, ensuring completeness/accuracy of data and methodology used to measure actual performance to target expectations. Enhance components based on strategic objective and goals from internal and external industry benchmarks.
Ensure completeness and accuracy of the data used to develop cost reports related to Graduate Medical Education & Indirect Medical Education Payments.
Perform a comprehensive gap analysis with Compliance and Management to determine the effectiveness and efficiency of the credentialing process.
Determine the effectiveness and efficiency of JMG physician billing process design and controls.
Ensure there are compensating controls in place to address the override process for narcotics/schedule II drugs administered at JMH ED/ER facility.
Determine if JHS Engineering department is complying with the established emergency procurement vendor rotational policy and guidelines.
Determine compliance to the JHS Procurement Regulation and identify opportunity for purchasing enhancement based on trend analysis.
Advisory/Consulting Services - Continuous Monitoring
Advisory/Consulting Services - Strategic Initiatives
Assurance Services
Ensure completeness and accuracy of the data used to develop cost reports related to Transplant.
Determine if JHS established daily change fund and cash receipts are present and properly accounted for. In addition, identify cash receipts and cash handling internal control
Project # Project Name Risk Rating Objectives Scope Status Planned Hours Actual Hours % 22
Payroll high
Review payroll process design and controls for effectiveness related to employee on-boarding, job change, terminations, overtime pay, payroll codes, payroll payment processing.
300 0%
23
Purchasing high
Review compliance with established policies/procedures for the procurement and supply chain functions. Specific areas of focus include sourcing vendors, proper authorizations of requisitions and purchase orders, maintenance of purchase orders, purchase order coding, existence of supporting documentation, and proper segregation of duties.
In Progress 400 10 3%
24
External Audit Assistance N/A Will be determined by the External Auditors In Progress 1000 180 18%
25
Business Continuity/Disaster Recovery
Assessment high
Review and validate current processes and P&P related plans, procedures, and capabilities to restore operations in the event of a disaster, natural or otherwise.
200 0%
26
Privacy Impact Assessment high Review current processes and P&P related to
privacy program. 200 0%
27
Vulnerability Assessment high
Review current processes and P&P related vulnerability management and system patching processes.
200 0%
28
Annual Physical Inventory Count high
Review contract with third party inventory counting vendor to ensure that terms and conditions are adequate. In addition, provide oversight of third party counts by performing sample recounts of items counted by the third party.
150 0%
29
Community Health Inc. ("CHI") low
Review contract/MOU criteria for dollar match requirements for services and programs for compliance with fund allocation.
250 0%
30 Special Projects/Unplanned
Audits/Investigations N/A TBD In Progress 500 120 24%
31
Audit Follow Up N/A TBD In Progress 500 80 16%
32
Annual Risk Assessment N/A
Meet with various business unit management to obtain their concerns and perspective on operational, financial, and compliance risk in order to develop the annual audit work plan.
200 0%
33 Project Carryover from Prior Year N/A TBD In Progress 300 250 83%
34 Public Records Request Review N/A
TBD In Progress 500 210 42%
Process Life Cycle ("PLC) 4,450 724 16% Continuous Monitoring 1,390 180 13% Strategic Initiatives 600 8 1% Assurance Services 4,500 390 9% Admin./Other Services 800 460 58% Total 11,740 1,762 15% TBD
Ensure that policies and procedures are adhered to established criteria for vendor selection, appropriate bidding process, document retention, contracting, and receiving.
TBD
Perform follow-up reviews of prior year's audit findings to ensure adequate and corrective actions are completed as stated.
TBD
To provide support to the external auditors in auditing JHS Financial Statements.
Ensure that the organization has adequate plans, procedures, and capabilities to restore operations in the event of a disaster, natural or otherwise.
Determine whether JHS has an effective privacy program to properly safeguard the use and protection of personal information.
Verify that vulnerability management and system patching processes are operating effectively. Ensure that externally exposed services are secured.
Ensure completeness of year end physical inventory count. Determine compliance with existing contract/MOU for services, proper financial allocation, and effectiveness of payment controls.
Administrative/Other Services
Develop a methodical risk based approach annual audit work plan.
Evaluate the adequacy of internal controls as well as the effectiveness and efficiency of the payroll process.