Unveiling the Prestigious Knighton Award: Recognizing Excellence in Performance Audits

Value Beyond a Knighton Award SEPTEMBER 23, 2022

Agenda Introductions Overview of the Knighton Award Overview of our Fire Marshal Audit Value beyond the award

Introductions Hanover Internal Audit Hanover Fire Marshal Attendees

Overview of the Knighton Award

What is a Knighton Award? Association of Local Government Auditors (ALGA) developed the Knighton Award Nationally recognizes the best performance audit reports Audit shops compete against peer shops of similar size Judged by audit professionals Award Tiers Exemplary (1) Distinguished (2)

History of the Knighton Award Developed in 1995 and named after Dr. Lennis M. Knighton Originally awarded to one audit shop per year, regardless of the shop size Audit shop size categories added in 1999 small, medium, and large Award tiers implemented in 2005 gold, silver, bronze and honorable mention Judging rubric developed in 2011 to apply criteria Award tiers revamped in 2014 one exemplary report and two distinguished reports Shop size categories expanded in 2014 extra small, small, medium, large, and extra large

Current Award Shop Size Categories Audit shop size categories includes the Chief Audit Executive, staffed auditor positions, and consultants working as full-time employees, but excludes administrative support. Extra Small (1 2 auditors) Small (3 5 auditors) Medium (6 10 auditors) Large (11 15 auditors) Extra Large (16+ auditors)

Timeline and Process Judges review report submissions in each size category per established criteria and recommend performance audit reports for awards in each category. First week of January Deadline to apply to be a Judge Third week of January Deadline for Awards Program Submission First week of March Judging panel complete the judging process Late March Early April Award Program Committee Chair notifies submitting shops of the results and makes them public May Knighton Awards are presented at ALGA s Annual Conference

Criteria Audit Shop Must be a current ALGA organization member May submit only 1 performance audit report each year Grant ALGA permission to publish winning reports Take majority responsibility for conducting the audit

Criteria Audit Report Issued during the award calendar year Conducted per Yellow or Red Book standards Include a standards compliance or modified standards compliance statement

Judging Criteria Audit scope potential impactful and responsive to needs Audit conclusions persuasive, logical, and firmly supported by the evidence Audit recommendations feasible, effective and efficient Audit results clear and concise

J u d g i n g R u b r i c

What do winners receive? Recognition at the ALGA Annual Conference Award plague Congratulatory letter, co-signed by the ALGA President and Awards Program Committee Chair Press release announcing the award and its significance Exemplary Award winners from each category are provided an opportunity to share their report with ALGA members during a concurrent session at the annual Conference. Also they receive one conference registration and travel costs to the annual conference per ALGA policy.

Virginia Winners 2020 Distinguished Small Shop Hanover County, VA Fire Marshal Audit 2019 Exemplary Small Shop Virginia Beach, VA Audit of the Virginia Beach Community Development Corporation 2015 Distinguished Extra Small Shop Springfield Public Schools, Springfield, VA Audit of Student Attendance Reporting 2011 Honorable Mention Medium Shop Richmond, VA Department of Public Works Roadways Maintenance 2008 Honorable Mention Small Shop Chesapeake, VA Fire Department Overtime

Why should YOU apply? Demonstration your audit work is a service to the locality Validation increases credibility, encourages auditees to implement recommendations Retention team members appreciate the recognition of their hard work Recruitment national awards are more likely to attract top talent Competition raises the bar

Why did WE apply? The Fire Marshal Office (FMO) was collaborative in the audit scope development, respected our professional judgment, and openly discussed and implemented recommendations. Peer validation Community-focused performance audit FMO procedural transformations began immediately Value for Internal Audit and FMO

Overview of our Fire Marshal Audit

Audit Highlights Performed per the annual Internal Audit Plan Objectives test compliance with regulatory requirements, controls in the department s procedures and system access rights Scope inspections and permits, plans review and parking fines Audit Planning Job shadowing Interviews Citizen perspective Additional Analysis Benchmarked with other localities Benchmarked revenue collection within Hanover Historical perspective

Fun Facts about FMO Only one L in Marshal Law-enforcement officers Fire Inspector vs. Fire Marshal Specialized services to the community

Environment Prior to the Audit Fire prevention services often are unnoticed Negative public perception of gun-carrying officer collecting fees Difficulty learning about new businesses in the county Number of businesses triggered prioritization when conducting inspections Software implementation resulted in updated inspection procedures Focus on developing interdepartmental and community relationships Changing environment regulatory requirements, staffing realignments, community demands

What we Learned Expansion and complexity of FMO services Training requirements with limited offerings Requirements state code, local ordinances, NFPA specifications, internal SOPs Necessity for FMO involvement in community development Importance of interdepartmental relationships Chain of command & structure

Audit Impacts Immediate Response Community Awareness Launched FMO webpage detailing services and public information Compliance with Regulations Developed permit application forms Established online permit application in conjunction with IT Department Revised permit template to reflect code references and electronic signature of Fire Marshal Revenue Collection Permit Fees & Parking Fines Ceased payment collections by fire inspectors and marshals Revised Treasurer s process & report to allow FMO to reconcile permit payments

Audit Impacts Intermediate Response Community Awareness Further enhancements to FMO and County website with interactive links Compliance with Regulations Adopted county ordinance to designate one Board of Appeals for FMO and Building Inspections Fee Structure & Cost Recovery Enhanced workload analysis and internal metrics for budgeting and staffing Identified restitution and services eligible for cost recovery Developed fee analysis and proposed a cost recovery schedule Revenue Collection Permit Fees & Parking Fines Established an online permit payment process on county website Improved procedures to reconcile permit payments Added functionality in current software to notify delinquent payees Designated short-term administrative support to relieve FMO

Audit Impacts Extended Response Revenue Collection Permit Fees & Parking Fines Designated permanent, primary administrative support for FMO Contracted with third-party vendor to manage billing process for fire permits and hazardous materials incident restitution Vendor collects permit payments and issue permits, eliminating the Treasurer s Office from permit fee collection process Revised reconciliation procedures for vendor s payments and FMO inspection database Implemented procedures to reconcile parking fine payments to the general ledger

Value beyond the award

Beyond the Award Additional analysis actually used Collaborative relationships were developed Credibility with Finance Committee Improved public image Improved services to citizens Support for career-ladder advancements Internal Audit confidence boost

Closing Thoughts Apply the award criteria to your daily audit work Use winning audit reports as a benchmark for good auditing Submit your reports