Operational Risk Assessment
Briefing to Commission Audit Committee Risk Assessment & Mitigation Accounting & Financial Reporting Department April 14, 2009 Presenters Rudy Caluza Director of Accounting & Financial Reporting Diane Jensen Senior Manager AFR Business Technology Port's Fiscal Stewardship $400-500 million annual revenues/expenditures $600 million annual CIP program $1 Billion in current & other assets $5 Billion net capital assets AFR Department - Core Operations Billing, Receivables & Collection Enforcement Disbursements & Payroll Administration Cash, Debt, General Ledger, Capital Projects & Fixed Assets Accounting Financial Reporting & GAAP Compliance Business Tax Administration Grants Billing & Reporting Corp Credit Card, P-Card & Expense Reimbursements Our Drivers & Foundational Values Accuracy Integrity Transparency External Audit Scrutiny Public Accountability (SAO) Financial Statements (Moss Adams) Performance Effectiveness/Efficiency (SAO) Single Audit Federal Grants Compliance (Moss Adams) Passenger Facility Charge (Moss Adams) Regulatory Compliance (State/Federal Auditors) Labor Contracts Administration (Contracted CPA firms) Controls/Compliance/Performance (Internal Auditors) Risk Assessment & Mitigation Objectives AFR Risk Mitigation Legal Regulatory Policies Procedures Current Comprehensive clearly documented Aligned each key business process Communicated understood Employees trained & refreshed Compliance AFR Risk Mitigation Organizational Structure Control Centric Resource Alignment Staff Competency Accountability - clear Segregation of Duties Review/Approval Points AFR Risk Mitigation Management Oversight Awareness Involvement Control Points Monitoring Approvals AFR Risk Mitigation Records & Documentation Content & Substance Complete & Accurate Justification for Actions Approvals Documented Managed & Safeguarded AFR Risk Mitigation Risk Management Operational Risks Known Exposure Mitigation in Place Integrated into Business Processes Periodic Comprehensive Reviews Risk Assessment & Mitigation Approach & Results AFR Risk Mitigation Project Approach Broad Scope All Key Operations Covered Full AFR Leadership Engaged Facilitated Assessment Sessions Decisions Documented Action Progress Tracked SharePoint Collaboration site AFR Risk Mitigation Key Action Areas Strengthen Control Points & Confirm System Controls Enhance Monitoring & Reviews Refine Policies & Desk Procedures Strengthen Organizational Training & Communication AFR Risk Mitigation Strengthen Control Points Confirm System Controls Vendor Set-ups independent of Purch & AP Clear Lease Administration Resp. Aviation vs AFR CIP Planning & Closing AFR involved/aware Customer Set-ups independent set up and approval AFR Risk Mitigation Enhance Monitoring & Reviews Dual employee & contractor status HR vs. AP GL-AP control acct. reconciliation 2nd sign-off Duplicate vendor analysis mitigate & clean up Marina Mgmt System audit reports Capital Lease worksheet review @ year-end AFR "Project Year-End" refinements (contract dispute info from Legal, tariff rate changes from field, etc.) Mandatory minimum full week of PTO annually Payroll staff AFR Risk Mitigation Refine Policies & Procedures Revenue Recognition Port wide policy Capitalization of IT Project Costs Port wide policy Unclaimed Monies Reporting to DORev procedure AR Accounts Adjustments & Aging procedure P-Card Reconciliation of Wires to AP procedure GL Chartfield Additions/Changes procedure AFR Risk Mitigation Policies & Procedures SharePoint Collaboration "sites" "AFR Risk Mitigation" Interim Depository for Mgt Review "Accounting & Financial Reporting main" Final Depository for Port-Wide Visibility AFR Risk Mitigation Organizational Training & Communication Financial Policies & Controls for Port Managers Port-wide Fiscal Year-End Training Inter-Dept Project Closing Meetings Port-wide Commitment Control Training Additions to HRD's New Hire & Pay Forums AFR Risk Mitigation Current Status 150 Action Items Identified 100 Completed 50 Assigned - Name & Due Date Continue Monitoring with Action Plan Updates Briefing to Commission Audit Committee Risk Assessment & Mitigation Accounting & Financial Reporting Department ? Questions ?
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