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Assurance Review Guide

The following should be used as a guide in conducting an Assurance Review. The objective is to recommend improvements in quality, time, cost and controls by identifying and analyzing the efficiency and effectiveness of activities and applicable controls of a business process, sub-processes and activities.

Keep in mind the principles of process improvement:

• Customer Focus
• Improvements in Quality, Time, Cost and Controls
• Short-Term Results
• Foundation for Continuous Improvement
• Process Owners' Participation

TARGET PHASE (Pick a Process)

Review current processes at a high level to determine the potential for attainable process improvements. Select a process or sub-process(es) to evaluate.
1. Telephone customer contact to set up kickoff meeting.

2. Set date, time and attendance for kickoff meeting. Stress the importance of including as many key employees as feasible in the kickoff meeting.

3. Have customer contact be thinking about processes in his/her department which the team could help improve. (If not already requested.)

4. Prepare agenda for kickoff meeting.

   Kickoff Meeting

5. Distribute and discuss agenda for kick-off meeting.

   Process Identification and Scoping

   Identify major processes or sub-processes for possible review.

   Note: Do not attempt to identify all possible processes--only those that have a significant impact on customers, resources, etc. If the customer has requested a process to review, complete Schedule I for only that process. Completing the schedule will enable you to document process customers and related products/services.

6. Prepare Schedule I, Major Process Identification Worksheet.
   • Determine if the department has a list of their processes, key work activities, systems, tasks, etc.

     Note: If the department has a PACE team or has developed their Strategic Plan, a schedule similar to Schedule I may already exist.

   • Complete the schedule by having focused discussions with the key staff members and management. The following may be helpful when identifying processes:
     • Department Strategies/Goals.
     • Products/Outputs and Customers of the department.
     • Job descriptions (EPQ's).
     • Functional organization chart.
     • Departmental budget (by activity).
     • Department procedures manual.

       Note: If possible, limit the number of major processes to no more than five.

   • List any areas that may not be processes, but the customer would like us to review.

7. REALITY CHECK - From discussion with key staff members and management, determine whether one or two processes can be selected for evaluation, based on knowledge of their potential for improvement. If so, interview or survey process customers to document their level of satisfaction and opportunities for improvement. Then proceed to ANALYZE PHASE. If not, continue with next step.

8. Prepare Schedule II, Customer Rating Summary Worksheet for those customers identified in Schedule I.
   • Review the "Instructions For Preparing Schedule II" for completing this schedule.

   • Determine product importance and satisfaction ratings of process customers via focus groups, interviews, or surveys.

   • Complete the Customer Rating Summary Worksheet.

   • REALITY CHECK - From discussion with key staff members, and department and audit management, determine whether one or two processes can be selected for evaluation, based on knowledge of their potential for improvement. If so, proceed to ANALYZE PHASE. If not, continue with next step.

9. Prepare Schedule III, Major Process Evaluation Worksheet. Note: This schedule will rank the processes in order of potential for improvement.
   • Review the "Instructions For Preparing Schedule III" for completing this schedule.

   • Copy all of the processes from Schedule I to Schedule III.

   • Complete the schedule with the key staff members or department management, using a scoring matrix (i.e., 1 - 5 points) for each of the 5 criteria.

     Note 1: You must develop your own scoring matrix based on the resulting range of customer ratings, team ranking, process complexity, percentage of time and estimated budget dollars related to the processes while completing this schedule.

     Note 2: Not all factors have to be used in the scoring matrix for each evaluation.

   • Sort this schedule by total Ranking score.

   • From discussion with key staff members and department and audit management, select one or two processes for evaluation that you can complete within the time allotted. Proceed with the ANALYZE PHASE of PREP.

   ANALYZE PHASE (Analyze the Process)

   Document and analyze the current state of the targeted process(es). The objective is to obtain a thorough understanding of the targeted process(es) and detailed documentation of the "as is" condition.

10. Process Documentation and Analysis
    • Gain management's commitment to make available appropriate representatives of personnel who perform activities in the targeted process.

    • From interviews with the above representatives and other appropriate personnel, perform the following:
      • Flowchart the activities that comprise the target process.
      • Document the employees and/or positions performing each activity.
      • Document the inputs and outputs of each activity.
      • Document significant control points.

    • Verify your completed process flowchart with personnel interviewed above.

    SCOPING PHASE

    Develop detailed review program to include the steps required to test controls as well as the activities requiring further evaluation for elimination or efficiency improvements.

11. Develop a Risk Analysis that identifies control strengths and weaknesses of the process(es) and items to test in your detailed review program.

12. Determine whether any activities could potentially be eliminated or made more efficient, and include them in your detailed review program for further evaluation. In making your determination, it may be helpful to document the root causes of each activity. Capture the root causes by asking Why is this activity necessary? and keep asking why until you get a reasonable answer. Ask for reasons and/or problems preventing the process from working as it would in the "Perfect World", only performing the activities which the "customer" finds valuable or which are otherwise required by law, regulation, or process necessity.

13. Prepare a Review Plan that includes background data, planned review objectives and scope, and planned reporting process (including estimate of time to complete).

14. Develop the detailed review program, based on the completed Risk Analysis.

    TESTING PHASE

15. Perform detailed review program steps.

    REPORTING PHASE

    This phase occurs throughout the course of the process review. Communicate interim recommendations for improvement by means of Interim Review Memos. At the conclusion of the process review, prepare a process review report to include:
    • Background · Provide general information about the department, focusing primarily on the process(es) evaluated.

    • Review Objective and Scope - the C.A.R.E.S. objectives.

    • Review Summary and Opinion · Express an opinion on the system of internal control and summarize the major review comments and management action plans that will improve controls, and efficiency and effectiveness of the selected process(es). Identify any positive comments for inclusion in the report.

    • Detailed Review Comments