FFY2011

1. FFY2011 Presented at FFY2011 EAP Annual Training August 11 & 12, 2010 Section 2 content: Chapter 1 Program Control Environment Chapter 2 Overview of Service Provider Responsibility Chapter 3 Vendor EAP Annual Training Section 2(Of 6)

2. Chapter Content Chapter 1 Program Control Environment • Program Description • EAP Business Strategy Model • EAP Internal Controls Framework (ICF)

3. Program Management Chapter 1 Program Control Environment • A number of concepts have been developed over time • Each added to EAP improvements & made a good program even better • Lately we have tried to more fully integrate these concepts into whole comprehensive approach • We are not yet done, further work is ahead Incremental Development Of EAP Business Models & Strategies

4. The Minnesota Model Chapter 1 Program Control Environment • EAP employs a “Coordinated Responsibility Model” • The Model assumes households, vendors, and the program all have a role in assuring heat for low-income households during the winter. • Program responsibility includes providing heating payment supplements, case management and advocacy for households, and maintaining influence with vendors. • Energy Vendor responsibility is to be as flexible as possible so energy payments leverage the highest possible level of service to the household. • Household responsibility is to make reasonable and planned payments for energy service, access government aid when necessary and communicate with vendors and government service providers.

5. EAP Management Approach Chapter 1 Program Control Environment Proven Process Including • Project Plans • Tools • Continuous Improvement

6. Formal & Documented Project Plans Chapter 1 Program Control Environment • Built with stakeholder input • PAC • EACA • JAD • State Staff • Policy makers • Puts a well-understood and accepted process in place for reaching the project’s results

7. Approach by Advanced Strategies Chapter 1 Program Control Environment • Used to develop eHEAT • Trained all EAP State Staff • Developed Internal Plans • Master Plan • Project Plans • Conducted JADs • Issues Management • Broadened application

8. Project (Effort) Definitions Chapter 1 Program Control Environment • Intentions: Goals or outcomes intended • Values: Principles, standards and ideals incorporated into the project or effort • Focus: What’s included and excluded • Context: Situations existing around the project, not part of it but can affect it

9. Business Strategy Model Chapter 1 Program Control Environment Why Do We Need a BSM? Provides a Shared Vision • Gives people a sense we are all serving the same goals ... we are all working together • Helps build a high-performing team • Helps provide consistent messages to key stakeholders • Helps guide day-to-day decisions and actions • BSM Intention Statement is our Mission – State Plan, Local Plan • We know you have heard it before but this is our basic foundation/strategy/mission

10. EAP BSM Intention Statement Chapter 1 Program Control Environment Maintain affordable, continuous, and safe home energy for low-income Minnesota households

11. Vision Chapter 1 Program Control Environment What happens if we don’t have a shared vision? • We each have a vision that underlies our behavior • If it is not shared – we appear to be • Out of sync • Disorganized • Inefficient • Inconsistent • Selfish • Ultimately not worthy of confidence • Appear unreliable (different responses from different individuals)

12. Intentions Values Means Environments • Definitions • Why does your unit or organization exist? • What guides the behavior of your organization? • What products or services do we provide? • To whom do we provide them? • What factors outside our organization must we monitor and adjust to? • How should we organize ourselves to meet our intentions, within our values? Chapter 1 Program Control Environment The Business Strategy Model Handout in Folder

13. Program Management Chapter 1 Program Control Environment EAP and PAC BSM Shared EAP & PAC BSM are same except means, but share • Intentions • Values • Means (Offerings & Markets) • Environments

14. Program Management Chapter 1 Program Control Environment PAC BSM- Background How we got here • Developed for the program by the State Staff • Extracted PAC specific content from a combination of program BSM and PAC effort definition

15. Chapter 1 Program Control Environment EAP BSM - Values 4 categories • Overall • Regarding Households • Regarding Collaboration • Regarding Policy Direction

16. Chapter 1 Program Control Environment EAP BSM - Values 1. Overall a. Affordable, safe, and dependable energy b. Advocacy c. Good stewardship of resources d. Being realistic about limitations e. Quality f. Partners and Partnerships (see Coordinated Responsibility Model) g. Understanding the program in the context of broader public policy and other needs of low-income Minnesotans h. Being the compass but not the map i. Reward positive, proactive behavior by all energy stakeholders

17. Chapter 1 Program Control Environment EAP BSM - Values 2. Regarding Households a. Dignity and privacy b. Participation (see Coordinated Responsibility Model) c. Empower people to make informed decisions regarding their energy use and needs d. Serving the most in need – balancing total number of participants makeup of participants, and levels of service

18. Chapter 1 Program Control Environment EAP BSM - Values 3. Regarding Collaboration a. The responsibility to provide a safety net b. Working towards the same goals c. Stakeholders personal commitment and accountability d. Represent our own personal perspective, the views of our stakeholder group, and the world from multiple perspectives e. Actively coordinate across programs and departments

19. Chapter 1 Program Control Environment EAP BSM - Values 4. Regarding Policy Direction a. Creative and flexible approaches b. Consistency c. Balance of simplicity and fairness d. Recommendations based on a sound community analysis e. More strategic than operational d. Timely and proactive in order to mitigate emerging problems

20. Chapter 1 Program Control Environment EAP BSM - Means Offerings Offerings (Program Products & Services) • Energy bill payment • Furnace repair or replacement • Energy related crisis intervention • Advocacy • Outreach • Referral • Information • Education • Conservation, coordination and collaboration • Demonstrate effectiveness of investment

21. Chapter 1 Program Control Environment EAP BSM - Means Offerings State Staff Offerings • Oversight, monitoring and quality control • Compliance with Federal and State requirements • Policy • Decision making • Planning • Training and Technical Support • Stakeholder involvement and communication • Program advocacy and information

22. Markets (Customers) Households, emphasizing low-income: Families with children under age five Families with members who are disabled Seniors EAP Director and Staff Local Service Providers Policy decision makers Funders (e.g. HHS) Energy Vendors Mechanical Contractors PAC members Weatherization Assistance Program Partner organizations Community Tax payers Utility rate payers Chapter 1 Program Control Environment EAP BSM - Means Markets

23. Chapter 1 Program Control Environment PAC BSM - Offerings • Direction • Oversight • Advocacy, education and outreach

24. Chapter 1 Program Control Environment BSM Environments • Internal • External

25. Chapter 1 Program Control Environment Internal Environmental Considerations

26. Chapter 1 Program Control Environment External Environmental Considerations

27. Chapter Description Chapter 2Overview of Service Provider Responsibility • Chapter outlines at a high level activities required of the EAP Coordinator & SP leadership. • It outlines using Internal Controls Framework (ICF). • Summarizes information detailed in the Policy Manual, referring to the appropriate chapter for policy details. Page 1

28. Chapter Contents Chapter 2Overview of Service Provider Responsibility • Control Environment • Risk Assessment • Control Activities • Communication and Information • Monitoring Page 1

29. Training Topics Chapter 2Overview of Service Provider Responsibility • Advance EAP internal Controls & Framework by • Reviewing ICF understanding? • Reviewing where EAP is with ICF • Discussing what is next with ICF?

30. What is ICF? Chapter 2Overview of Service Provider Responsibility The Framework is used assess the Internal Controls maturity to determine how competently an organization • Identifies its risks • Documents & assigns its control procedures • How it monitors performance & effectiveness its procedures

31. Internal Control Definition Chapter 2Overview of Service Provider Responsibility Defines internal control as a process, effected by individuals within an organization, designed to provide reasonable assurance regarding the achievement of these objectives: 1. Effectiveness & efficiency of operations 2. Reliability of financial reporting 3. Compliance with applicable laws & regulations. Page 1

32. The Framework InteractionsThe Schnese Snow Globe illustrates the relationship if control frames Chapter 2Overview of Service Provider Responsibility

33. 1. Control Environment Chapter 2Overview of Service Provider Responsibility Page 1 Service Providers should establish and maintain an ethical and procedural work environment throughout the organization that sets a positive and supportive attitude toward internal control and conscientious management.

34. Chapter 2Overview of Service Provider Responsibility Page 2 Service Provider EAP Organizational Competence Service Providers should assure: • Service Provider human resource materials • A reasonable EAP resourcing model • EAP staff have functional position description • EAP staff have proper agency knowledge • EAP staff have proficient eHEAT competencies • EAP staff demonstrate knowledge of Service Provider policies and procedures • Formal and new staff training • Support of technical environment necessary to deliver EAP • Training for staff to work with diverse populations

35. Implementations Control Environment Chapter 2Overview of Service Provider Responsibility • Local Plan, contracts gives assurances by documenting internal controls competencies • SP connects Business Strategy Model (BSM) & SP Mission • SP participates in EAP management methodology including joint approach to development, EACA, JADs, training etc. • SP have realistic staffing model, structure of authority and show a commitment to EAP • Service Providers participates in EAP training and trains staff

36. 2. Risk Management Chapter 2Overview of Service Provider Responsibility Page 2 Risk planning is geared toward events that occur when things are different than planned. ServiceProviders should have procedures in place to deal with unplanned events. . . . . . .The goal is assuring the Service Provider’s ability to maintain financial strength, a positive public image, and the overall quality of its products and government services.

37. Risk Competence Chapter 2Overview of Service Provider Responsibility SP has risk a assessment process • Indentifying Internal and external risk • Assessing the impact and the likelihood these risks might occur • Selecting whether to avoid, reduce, share, or accept various risks • Considers controls to mitigate risk or to contain it to an acceptable level

38. ImplementationsRisk Management Chapter 2Overview of Service Provider Responsibility • SP conduct risk assessment & mitigation activities • State and SP conduct oversight activities including: • Data, file and other checks • Data & Technology practices (eHEAT user management) • SP make a maintain disaster plans • Local Employee Applications processes and utilization of state requirements • SP uses incident reporting process • SP uses error & fraud processes

39. 3. Control Activities Chapter 2Overview of Service Provider Responsibility Page 3 Service Provider should design and implement internal control in processing applications, determining eligibility and delivering benefits. These procedures assure program services are timely, accurate, uniform and equally available throughout the State. They address essential EAP required procedures

40. Control Activities Competence Chapter 2Overview of Service Provider Responsibility • There are realistic policies & procedures to help ensure management directives are carried out • Control activities occur throughout the organization at all levels in all functions

41. Implementation Control Environment Chapter 2Overview of Service Provider Responsibility • SP processes have approvals & authorizations for benefit determination & payments (Separation of duties) • SP conduct and support verifications for: • Income eligibility & documentation • vendor registration • payment process for ERR contractors. • Household check points • SP conducts analytical procedures or quality controls • SP conducts reconciliations like allocation and FSR

42. 4. Information & Communication Chapter 2Overview of Service Provider Responsibility Page 6 Service Provider’s should communicate the internal control policies and procedures to all staff and stakeholders so they understand what is expected of them and the scope of their freedom to act in relation to program participants and partners.

43. Information & Communication Competence Chapter 2Overview of Service Provider Responsibility • Organization identifies, captures & communicates pertinent information in a timely manner to the right people to enable them to carry out their responsibilities • Information systems are effective • Internal information, and external events, activities & conditions are communicated to enable management to make informed business decisions and employees & partners to perform their roles & duties

44. Implementation Communication & Information Chapter 2Overview of Service Provider Responsibility • SP has communication plan to dissemination information • SP has routines, like meetings, to inform staff and partners • SP conducts appropriate and effective outreach • SP retains information over time • SP is up to date with routine EAP communication: • Weekly newsletter The Energizer & Ad hoc email • Web information and program tools • Association meetings (Executive Directors & Coordinators) • T&TA • SP is responsive to reporting & other deadlines

45. 5. Monitoring Chapter 2Overview of Service Provider Responsibility Page 6 Monitoring relates to Service Provider’s separate evaluations of internal control, such as control self-assessments or internal procedures and performance . . .

46. Monitoring Competence: Chapter 2Overview of Service Provider Responsibility • Monitoring is performed by management & supervisors on a continuous or periodic basis • Identifying control deficiencies and reporting to top management and are remedied in a timely manner with appropriate corrective actions • Is periodic follow-up on corrective actions taken to ensure control weaknesses are strengthened and no longer exist

47. Implementation Monitoring Chapter 2Overview of Service Provider Responsibility • SP uses performance goals like WACT to adjust resources • SP measures average days from log to paid to monitor efficiency • SP uses customer feedback • SP monitors effect on production when implementing new tools or processes (Ex: Scanning)

48. What is Controls Maturation Chapter 2Overview of Service Provider Responsibility • Internal Controls mature as people become more aware of them • It becomes the culture and language • Results in improvement of Control Activities in a continuous improvement process • Risk management is strengthened

49. Our Responsibility Chapter 2Overview of Service Provider Responsibility • Advance our understanding ICF • Understand how existing EAP controls fit ICF • Continue to implement new ICF activities • Strengthening controls when weaknesses are detected • Provide supervision to ensure controls operate effectively • Obtain ICF information & training for selves & staff necessary to meaningfully take responsibility for internal controls • Share these Chapters with SP leadership

50. ICF Improvements Next Chapter 2Overview of Service Provider Responsibility In FFY2011 EAP will focus on: • Advancing Risk Management • Improvement of self monitoring internal controls for continuous improvement • Continue framing is a way of organizing existing & then making improvement if needed • Everything you see is organized through ICF & this will continue