# Presentation: 874256

## Writing Effective Corrective Action Plans

**Writing Effective Corrective Action Plans**

**November 29, 2007**

**Ms. Carmen Covey**
**CFO Compliance and Systems**
**Directorate**

## A lighthearted but practical approach to writing effective A-123 Appendix A        Corrective Action Plans

- Purpose

- Disclaimer:
- I take credit for all the jokes and illustrations you enjoy.  The rest were slipped in by my staff.

## After we determine we have a problem, what’s next? 
	a. Ignore it.  The problem will go away eventually.
	b. Blame it on your predecessor.
	c. Create a Corrective Action Plan.

**He’ll take **
**care of it!**

- After we determine we have a problem, what’s next?
- 	a. Ignore it.  The problem will go away eventually.
- 	b. Blame it on your predecessor.
- 	c. Create a Corrective Action Plan.

- Houston, we have a problem.

- Answer:
- c. Corrective Action Plan

## Corrective Action Plan

- What is a Corrective Action Plan anyway?
- Corrective – A practical strategy to resolve the impediment
- Action – Active steps we can realistically accomplish
- Plan – Organized, purposeful, accountable, measurable

- +

- =

- No solution without a CAP

## State the weakness succinctly 
Have “owners” who are accountable for results  
Break the solution into discrete actions
Identify the accountable office for each action
Set achievable deadlines 

- Have “owners” who are accountable for results
- Break the solution into discrete actions
- Identify the accountable office for each action
- Set achievable deadlines

- Effective Corrective Action Plans

- A journey of a thousand miles begins with a single step.

- Monitor progress and specify measurable results

## Corrective Action Plan Components

- 1. State the weakness succinctly
- Address _a specific problem_ related to one of the _five audit assertions._*  The assertions will be on the quiz at the end of this slide show.
- DON’T:	Military equipment is not audit ready    (Too vague)
- 	In FY 2007, we reported military equipment of $100M   (No problem specified)
- 	This corrective action plan is designed to correct the problem with Accounts 	Payable which was that we cannot explain the amount reported on the financial 	statements because the transactions don’t match up.   (Not succinct)
- ***C**ompleteness, **O**bligations, **V**aluation, **E**xistence & **R**eporting  (COVER)

- Huh?

## Corrective Action Plan Components

- 2. State the weakness succinctly
- Address _a specific problem_ related to one of the _five audit assertions._*

- ***C**ompleteness, **O**bligations, **V**aluation, **E**xistence & **R**eporting  (COVER)

- Thuccinct equalth thucceth

- DO:	Accounts Payable transactions do not reconcile to 	the amount reported on the MDA Financial 	Statements
- 	All military equipment is not reported on MDA 	Financial Statements
- 	Military equipment may not be valued accurately 	on MDA Financial Statements

## Corrective Action Plan Components

- 2. Owners who are accountable
- The Comptroller is responsible for Appendix A implementation.
- Program Managers write Corrective Action Plans.
- So who’s in charge?   Who’s accountable?
- _It’s a joint effort._

## Corrective Action Plan Components

- How do the Comptroller and Program Managers work together?

- Step 1: 	Program Managers identify impediments during their day-to-day routine
- Step 2: 	Program Managers write Corrective Action Plans
- Step 3: 	As part of the Appendix A process, the Comptroller requests Corrective 	Action Plans from Program Managers
- Step 4: 	The Comptroller ensures the Plan meets Appendix A requirements

- Step 5: 	Program Managers review/approve any 	revisions recommended by the Comptroller
- Step 6: 	The Comptroller checks in with Program 	Managers in order to report progress as required 	by the Statement of Assurance

## Corrective Action Plan Components

- Bonus slide!!   Bonus slide!!  Real MDA experience

- To increase accountability for Corrective Action Plans:
- In the Targets and Countermeasures Corrective Action Plan, management specified the number of additional personnel required to implement the Plan.
- Real Property management included property accountability targets in their NSPS performance goals.
- Material weaknesses and associated Corrective Action Plans for Real Property and Environmental Liabilities were included in the 2007 MDA Statement of Assurance.

## 3. Break the problem into discrete actions
Weakness: All military equipment is not reported on MDA Financial Statements
DON’T:	E-mail Program Managers with a request for a list of their military 	equipment and its value.  Add the list of equipment to the financial 	statement
Too much is included in a single step. Further, critical details are omitted.

- Weakness: All military equipment is not reported on MDA Financial Statements
- DON’T:	E-mail Program Managers with a request for a list of their military 	equipment and its value.  Add the list of equipment to the financial 	statement
- Too much is included in a single step. Further, critical details are omitted.

- DO:	a. The Comptroller works with Program Managers 	to inventory assets on hand
-   	b. Jointly document value/title via Form DD 250
- 		c. The Comptroller updates amounts reported on 	financial statements with documented inventory

- How do you eat an elephant?  One bite at a time.

- Corrective Action Plan Components

## 4. Identify the accountable office for each action
DON’T:	a. MDA issues a data call for Military Equipment
		b. MDA reports Military Equipment on its Financial Statements
		c. MDA writes an SOP for the new process

DO:		a. The Comptroller issues a data call to Program Managers with a request for            Military Equipment asset information
		b. Program Managers send a spreadsheet and supporting information to the            Comptroller
		c. The Comptroller verifies the information received
		d. The Comptroller reports the information on the Financial Statements
		e. Program Managers develop SOPs; the Comptroller reviews the SOPs for           adequacy

- DON’T:	a. MDA issues a data call for Military Equipment
- 		b. MDA reports Military Equipment on its Financial Statements
- 		c. MDA writes an SOP for the new process
- DO:		a. The Comptroller issues a data call to Program Managers with a request for            Military Equipment asset information
- 		b. Program Managers send a spreadsheet and supporting information to the            Comptroller
- 		c. The Comptroller verifies the information received
- 		d. The Comptroller reports the information on the Financial Statements
- 		e. Program Managers develop SOPs; the Comptroller reviews the SOPs for           adequacy

- Corrective Action Plan Components

- Many hands make light work in the kitchen or at the office!

## Corrective Action Plan Components

- 5. Set achievable deadlines
- DON’T:	                        Tasks		Deadline
- 	- Inventory all MDA real property 	28 DEC 2007 	(too fast)
- 	- Update SOP for new process		29 NOV 2017 	(too slow)
- 	- Move to new system		TBD	(no accountability)
- Deadlines that are too short or too far off are not realistic.  TBD is not acceptable.  Unrealistic deadlines and TBD mean that more detail is required.

- TBD

## Corrective Action Plan Components

- 5. Set achievable deadlines
- DO:	Task:			Deadline
- 	_Inventory all MDA real property_			30 JUN 2008
- 	a. Determine all MDA locations  			28 DEC 2007
- 	b. Obtain POC for each location 			11 JAN 2008
- 	c. Meet with all POCs 			14 FEB 2008
- 	and request inventory or schedule
- 	property inventory
- 	d. Conduct property inventory			30 JUN 2008
- Based on the additional detail, the inventory task can be completed by 30 JUN 2008.

## Corrective Action Plan Components

- 6. Monitor progress and specify measurable results
- DON’T:	- Improve the financial reporting process for Accounts Receivable
- 	- Learn how the current system of calculating payroll accrual operates
- 	- Determine if all Military Equipment is reported on Financial Statements
- Hint:  If you saw these statements on a resume, you’d think “that person isn’t telling me anything.”  The same philosophy applies here.
- DO:	- Establish an allowance for loss on Accounts Receivable if needed
- 	- Verify the payroll accrual is accurate
- 	- Inventory MDA Sensors Directorate Military Equipment

**This clip art looks like the guy **
**who created this briefing.  **
**Steve, please stand up and **
**embarrass yourself.**

## To recap:
State the weakness succinctly 
Have “owners” who are accountable for results  
Break the solution into discrete actions
Identify the accountable office for each action
Set achievable deadlines
Monitor progress and specify measurable results

Put these components together and you get ....

- State the weakness succinctly
- Have “owners” who are accountable for results
- Break the solution into discrete actions
- Identify the accountable office for each action
- Set achievable deadlines
- Monitor progress and specify measurable results
- Put these components together and you get ....

- Effective Corrective Action Plans

## Effective Corrective Action Plans

## Effective Corrective Action Plans

- For my next trick, I will walk you through two actual Corrective Action Plans.  The first was created weeks ago expressly for this conference.*

- *No animals were harmed during the creation of this Corrective Action Plan

## Example #1 - Straighten the leaning Tower of Pisa*

- *Trust me. I’m not an architect but I stayed in a Holiday Inn Express last night.

## The Leaning Tower of Pisa

**DON’T**
- Blow it up and build another tower in its place.
- On three, PUSH!

**DO**
- Ensure the land underneath the Tower is solid and then straighten the foundation.

- Corrective – A practical strategy to resolve the impediment

## The Leaning Tower of Pisa

**DON’T**
- Nature created the problem so nature will cure it.
- Tilt your head a bit and its fine.

**DO**
-  Assess the foundation and the land underneath, get the required permits to do the work, and hire people to do the work.
- ACT! ACT! ACT!

- Action – The problem won’t go away on its own

## The Leaning Tower of Pisa

**DON’T**
- No fishing expeditions.  (Cast your line and hope it works)
- No mazes.  (Keep going until you stumble, then back up and try a new path)

**DO**
-  Concrete, measurable steps with realistic milestones that lead to a solution
-  Assess the foundation (January 1)
-  Obtain permits, hire crew (March 1)
-  Straighten the tower (June 1)

- Plan – Organized, purposeful, accountable, measurable

## The Leaning Tower of PisaCorrective Action Plan (1 of 3)

- Weakness: The Tower of Pisa leans
- The AALT* will assess the foundation and land underneath (January 1)
- 	1a. Hire an independent surveyor experienced with limestone, lime mortar, and marble.  Italian a plus.
- 	1b. The surveyor will assess the tower foundation and the surrounding land.
- 	1c. The surveyor will write a report stating how the tower can be straightened.  The report will include the materials and labor required.
- AALT: Architects Against Leaning Towers

## The Leaning Tower of PisaCorrective Action Plan (2 of 3)

- 	2a. The AALT government liaison will take the report to the Italian government and request permission to shore up the foundation (and land, if needed).
- 	2b. The AALT site manager will use the independent surveyor report to hire a project team and procure the building materials.
- AALT: Architects Against Leaning Towers

- The Leaning Tower of PisaCorrective Action Plan (2 of 3)

## The Leaning Tower of PisaCorrective Action Plan (3 of 3)

- 	3a. The AALT site manager will oversee team straightening the tower.
- 	3b. After work is complete, the independent surveyor will re-assess to make sure the work is acceptable.
- AALT: Architects Against Leaning Towers

- The Leaning Tower of PisaCorrective Action Plan (3 of 3)

## Effective Corrective Action Plans

- Questions?