Facilities, Plant and Equipment

Control Objectives for Facilities, Plant and Equipment

(a) To ensure that appropriate and sufficient facilities, plant and equipment
are provided in order to support the achievement of defined business objectives;
(b) To ensure that buildings provide adequate, efficient, and well laid out
working spaces complete with all the necessary services;
(c) To ensure that plant and equipment are properly maintained in working
order, operated correctly by sufficiently trained staff and in accordance with the
manufacturers directions and recommended loadings;
(d) To ensure that the production area is logically and safely laid out in order
to maximise operational efficiency;
(e) To ensure that machinery and equipment is correctly installed, configured,
calibrated, tested and maintained in order to avoid the disruption of the
production processes;
(f) To ensure that the necessary ancillary equipment (i.e. cranes, conveyor
systems, environmental systems, etc.) are provided and fully operational;
(g) To ensure that machine loadings and performance are recorded and
monitored in order to achieve the optimum safe utilisation of plant;
(h) To ensure that all plant and equipment is adequately identified and
accounted for;
(i) To ensure that all usage, operational and overhead costs are accurately
identified and reflected in the accounts;
(j) To ensure that all plant, equipment and facilities are adequately protected
from loss, damage and deterioration;
(k) To ensure that plant and equipment requirements are monitored in
accordance with current and future trends, and that acquisition of new equipment
is appropriately assessed and authorised;
(l) To ensure that all the relevant health and safety issues and regulations are
satisfactorily addressed;
(m) To ensure that disposals and transfers of plant and equipment are justified,
authorised and correctly reflected in the accounts;
(n) To ensure that staff facilities (i.e. washrooms) are adequate and of an
appropriate quality.

Risk and Control Issues for Facilities, Plant and Equipment

1 Key Issues

1.1 How can management be assured that production facilities, plant

and equipment are (and will remain) adequate to fulfill the defined business
and operational needs?
1.2 How would either facility and equipment shortcomings or surpluses
be promptly identified and addressed?
1.3 Are measures in place to ensure the optimum efficiency of the
production facility layout, and how are problems identified and resolved?
1.4 How can management be assured that equipment is operated
correctly, appropriately maintained, and effectively utilised?
1.5 Would management be aware of all production downtime caused
either by failure of or problems with plant and equipment, and what action
is taken to avoid and minimise such disruptions?
1.6 How can management be assured that all plant and equipment is
appropriately accounted for and correctly reflected in the accounts?
1.7 Are all acquisitions and disposals of plant and equipment subject to
adequate prior assessment and authorisation, and how is this evidenced?
1.8 What measures are in place to ensure that all the relevant usage,
operational and overhead costs associated with the production facilities are
identified and correctly accounted for?
1.9 How can management be assured that all the relevant prevailing
health and safety regulations are fully complied with?

2 Detailed Issues

2.1 How does management accurately and reliably assess the production
facility, plant and equipment requirements, and ensure that future needs are both
identified and planned for?
2.2 How does management avoid either shortfalls and excesses of facilities
and equipment?
2.3 Has management prepared and tested contingency arrangements in the
event of a major disruption to production facilities (i.e. a serious fire)?
2.4 Has appropriate, adequate, and current insurance cover been provided?
2.5 Does the production facility layout allow for the logical flow of goods and
avoid unnecessary handling, etc.?
2.6 Are facilities maintained in an orderly and clean manner, and have all
potentially dangers and debris been removed?
2.7 How can management be assured that the facilities conform to the
requirements of the relevant regulations?
2.8 How can management be certain that the appropriate environmental
systems (i.e. heating, lighting, air conditioning, etc) are operating correctly,
efficiently and in accordance with defined standards?
2.9 Have sufficient and appropriate staff facilities been provided and do they
comply with any relevant regulations and standards?
2.10 Have safe and realistic working loads been determined for production
plant and equipment, and how can management be certain that actual operations
conform with the required levels?
2.11 Has management implemented an ongoing programme of equipment
maintenance that complies with the manufacturers recommendations, and how
can they be sure that the programme is correctly conducted?
2.12 How can management be assured that all equipment is correctly installed,
configured, and calibrated?
2.13 Is downtime recorded at an individual machine level, and would problems
with specific equipment be actively pursued with the manufacturers (i.e. through
service and warranty arrangements)?
2.14 Are standard operating procedures defined and documented for all
production equipment?
2.15 How can management be sure that all the relevant staff are aware of the
correct, standard and safe methods of operation, and how can their compliance be
confirmed?
2.16 Are measures in place to detect and resolve instances of either the
inappropriate or unsafe operation of equipment?
2.17 What mechanisms ensure that production staff are appropriately and
adequately trained to perform their duties efficiently and safely?
2.18 Would breaches of the defined safety codes be identified and reacted to?
2.19 Is sufficient ancillary equipment (i.e. conveyors, cranes, handling devices,
specialist tools, etc) provided and maintained?
2.20 Have accurate and appropriate performance monitoring facilities been
established, and what evidence is there that the data is reviewed and actioned by
management?
2.21 How can management be assured that all the production assets (i.e. plant
and equipment) recorded in the accounts are valid and available for use?
2.22 What mechanisms prevent the unauthorised or premature disposal of plant
and equipment?
2.23 What precautions are taken to prevent loss of, damage to, or deterioration
of plant and equipment?
2.24 Would failures to comply with health and safety regulations be detected so
that appropriate action could be taken?
2.25 How is the data input from other systems (i.e. production planning)
confirmed?
2.26 How is the data output to other systems (i.e. fixed assets) confirmed?