Internal Property Audits

1. Internal Property Audits GDAIS Property Managers June 14, 2010 NES - 2010

2. Welcome / Introductions • Introduction: • Presenters today: • Mark Smith, CPPM • Roy DeLauder, CPPM, CF • Wendy Latimer, CPPM • Glenn Markle, CCPM • Topic: • Conducting self assessment audits at General Dynamics Advanced Information Systems (AIS). • Thanks for coming. • Questions are welcome at the end.

3. What will be discussed today? • Why conduct a self assessment audit? • What planning goes into conducting a self assessment audit? (Pre-audit activities) • How do we conduct our self assessment audit? • What happens after the self assessment audit is completed? (Post audit activities) • What are some lessons learned? • What are the benefits?

4. Why Conduct a Self Assessment Audit? • Yes, we are required to by FAR 52.245-1. • FAR 52.245-1 states; “The Contractor shall establish and maintain procedures necessary to assess its property management system effectiveness, and shall perform periodic internal reviewsand audits”. • Another requirement, one more box to check off? Is this how you see it? • It’s more than just a requirement – it’s an OPPORTUNITY. • Conducting Self Assessment audits has opened more doors for our team and our profession than anything we have done.

5. How do we conduct the audit? • Who will audit? • What to audit? • When to audit? • Where to audit? • How to audit?

6. Who will audit? • Audit Team • Managers have several major and minor sites • Managers audit each other • Lead auditor is not from the site. • Manager is tasked to support the audit. Provides documents, records, logs, etc.

7. What to Audit? Analysis Close-out Property Management (Planning) Disposition Acquisition Subcontractor Control (Including Buy/Build/Lease Decisions) Life Cycle of Property (15 Business Processes) Receiving Inventory Maintenance Identification Utilization Records Consumption Reports Movement Risk/liability Storage

8. What to audit? • Questions on each Business Process • Canned set of Starter questions • Broken out by role: PM, CA, SCA, Custodian, Specialist, Material Control, & Security • Interviews • Artifacts (records, logs, inventory results, etc.) • Includes list of contracts, list of all direct purchases over last 12 months. Etc. • Samples chosen

9. When to audit? • Can anything be done before the team arrives on site? • Samples chosen • Communicate to players • Some interviews can be but not all. • Schedule for on-site time: • Interviews / Entrance & Exit briefings • Record to Floor & Floor to Record Checks

10. Where to audit? • What contracts are covered by the audit? • ???? • Managers set 5 or 6 per year?

11. How do we audit? • Notify site about 45 days out. • Artifacts posted into a shared file location. – 30 days prior. • Samples picked and communicated. • Entrance and Exit brief scheduled. • Pre-site interviews scheduled. • On-site interviews scheduled. • Focused on touching equipment. • Exit Brief => Final Report 2 weeks after.

12. Exit Brief/ Final Report Analysis Close-out Property Management (Planning) Disposition Acquisition Subcontractor Control Property Management System (15 Business Processes) Receiving Inventory Maintenance Identification Utilization Records Consumption Reports Movement Risk/liability Storage

13. Audit Finding 1Business Process - Receiving • While conducting interviews, it was communicated that there are no procedures that are being used for performing the receiving process. • Reference Document: PPQ-PRO-5.2 • Assigned to: Al Thomas Final Report

14. Results • Lots of Audit Information Provided • Our Methods comply with the FAR • We touch every business process • Through Interviews and Artifacts • Process is thorough • Results can be reviewed by any Property Administrator (Online Repository) • Every Stakeholder/Key Player has a role and the importance of their role is realized

15. Results • We know the health of our Property Management System • We have a way to capture areas that need improvement and follow up until closed. (Next Slide is an example of fields in our correction action log) • Training • Procedures

16. Corrective Action Log • Finding Number: Example: PMO001 • Division • Description • Corrective Action Type (Tools, Execution, Procedures, Training) • Documented By • Finding Date • Site/Program • Assigned to • Manager of Assigned to • Status • Due Date for CAR Completion • Date Closed • Notes/Comments

17. Results • Most Important part of the audit is to Capture Observations and Findings and FOLLOW UP!! • There has to be a system/tool to document the findings • There has to be a person continuously following up on the status of the corrective actions • There must be a history of what was done and how it was improved (we often look at that area again to see if the corrective action worked)

18. Lessons Learned • Gain Upper Management Support! • Have Someone Designated as the Audit Lead/Audit Chair • Be Prepared • Be Organized • Be Ready for Pushback • I need a charge number • I don’t have time for this • Blah, Blah, Blah!

19. Lessons Learned • Do what you can by telephone • Assign Interviews to the Auditors and let them schedule and coordinate their portion of the audit. • Have daily meetings and post whatever you can on a daily basis. • We didn’t get to this point overnight! • Communication with Audit Team • Communication with Sites and Participants • Teamwork

20. Questions? • Thank you!! • Mark Smith, Greensboro NC 336-698-8834 • Roy De Lauder, Fairfax VA, 703-277-1529 • Glenn Markle, Santa Clara CA, 650-966-3802 • Wendy Latimer, Washington DC 240-427-7230