CTQC Background Information Cost Data Integrity Project

Some basic definitions: Critical to Quality (CTQ) or Critical to Quality Characteristics (CTQC): Specific factors or attributes that are associated with your products, processes, and services that customers consider extremely important. This is often identified by listening to your customers through surveys, interviews, complaints, and other ways for fully understanding the requirements of your customers. Six Sigma professionals refer to this as Voice of the Customer or VOC. Once you have captured VOC, you can then translate this information into CTQ's. Translation of CTQ to Operational Definitions: This project did not rely heavily on "Voice of the Customer" through surveys, focus groups, and other techniques since the customer audience (project personnel) did not provide much insights into the sources of the problems. Therefore, it was considered necessary to create a CTQ Diagram that drilled down to the CTQ related sources. A total of fourteen sources were identified as listed on the next tab. Once each CTQ was identified per the CTQ Diagram, operational definitions were established to help indicate what is acceptable performance. Operating definitions (acceptable performance) has been expressed in terms of three dimensions: 1. Performance Standard - Set a threshold or benchmark for measuring if performance is acceptable or not. 2. Measurement Test - Describe a procedure or task that can be performed to determine if the actual transactional data is actually meeting the Performance Standard. 3. Measurement Results - What is the output of the measurement test?

Critical to Quality Characteristics (CTQC) Cost Data Integrity Project

Once you have completed the CTQ Diagram, define the operational definitions for each CTQ. You may want to focus on the major CTQ's as opposed to all. < - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Operational Definition - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > No CTQ per Diagram Performance Standard Measurement Test Measurement Results All System Administrators confirm that updates received after 6 months Comparison of sample data between source system and Project Management System All System Administrators confirm that updates received after 6 months Comparison of sample data between source system and Project Management System Comparison of sample timesheets at selected cutoff dates within Project Management System Analyze sample timesheets for accuracy within the Project Management System Analyze sample timesheets for accuracy within the Project Management System Analyze sample vendor invoices and test for approval in processing Analyze sample vendor invoices and compare to expense entries in Project Management System Analyze sample expense statements and test for approval in processing Analyze sample expense statements and test accuracy in the Project Management System Analyze sample expense statements and test accuracy in the Project Management System Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Refer to Sample Procedures and Attribute Measurement System Analysis Do Not Measure - not material to costs per Pareto Do Not Measure - not material to costs per Pareto Do Not Measure - not material to costs per Pareto Continuous or Discrete Preliminary Testing Results

1 Timely Base Rates 2 Accurate Base Rates 3 Timely Fringe Benefits Rates 4 Accurate Fringe Benefits Rates

Updated Listing provided every 6 months Actual Base Rate of Pay for Employee is within 1% accurate of the source system Updated Listing provided every 6 months Actual Fringe Benefits Rate of Pay is within 2% accurate of the source system All weekly timesheets approved - 99% approval processing rate All weekly timesheets coded and entered correctly - 99% accuracy rate All weekly hours have been accounted for and entered - 99% accuracy rate All monthly vendor invoices have been approved - 95% approval rate All monthly vendor invoices have been coded and entered correctly - 99% accuracy rate All monthly employee expense statements approved - 95% approval rate All monthly employee expense statements coded and entered correctly - 99% accuracy rate All monthly employee expense statements accounted for - 99% accuracy rate All procurement credit card purchases approved and authorized - 99% approval rate All procurement credit card purchases coded and entered correctly - 99% accuracy rate

Discrete Discrete Discrete Discrete

Working UTD Working Broken

5 Manager Approval of Labor Hours 6 Correct Coding of Labor Hours 7 Completeness of Labor Hours 8 Officer Approval of Vendor Invoices

Continuous Continuous Continuous Continuous

Broken Broken Broken Broken

9 Correct Coding of Vendor Invoices 10 Manager Approval of Employee Expenses

Continuous Continuous

Broken

11 Correct Coding of Employee Expenses 12 Completeness of Employee Expenses

Continuous Continuous

13 Manager Approval of Credit Card Expenses

Analyze sample credit card purchases and test for Do Not Measure - not material to costs per approval in processing Pareto Analyze sample credit card purchases and test for Do Not Measure - not material to costs per accuracy in the Project Management System Pareto

Continuous

14 Correct Coding of Credit Card Expenses

Continuous

Cost Data Integrity Project

Preliminary Testing and Reviews for each CTQ listed above: 1. Compare the Financial Reporting System Cost Runs for a sample of IT projects and compare these to the Expense Print Outs from the Project Management System. Determine the extent to which vendor invoices, employee expenses, and credit card payments are not entered correctly into the Project Management System. 2. 3. 4. Compare the active personnel assigned to a sample of projects and determine if the weekly timesheets are entered and approved. Contact the System Administrators over the Project Management System and determine how often actual labor rates get updated. Contact the System Administrators over the Project Management System and determine how often actual fringe benefits rates get updated.

Based on the four tests above, one of three grades was assigned to the CTQ: Working - The process related to CTQ appears to meet the performance standard defined. Broken - The process related to the CTQ appears to be broken and needs improvement. U T D - Unable to Determine; need to sample and test the population data. This preliminary review helped determine the scope and downstream work required for this project.

Cost Data Integrity Project