Sampling Plan for
Cost Data Integrity Project
Summarize important factors behind the Sampling Plan for this project:
Data Collection Reference >
Measurement Parameter >
Describe Population Data >
Sample Selection Method >
Sample Frequency >
Population Source >
What to Sample>
When to Sample >
Cost Data Integrity Project
Five Possible Defects for Employee Timesheets Two Possible Defects for Vendor Invoices
E.1 E.2 E.3 E.4.i E.4.ii E.5.i E.5.ii
Base Rate of Pay per Fringe Benefit Rate per Timesheets are Timesheets are Timesheets are coded Vendor Invoices are Vendor Invoice Amounts
PMS is within 1% of the PMS is within 1% of the submitted in a timely complete and account correctly with valid coded to PMS in a as posted in PMS are
Source Data per System Source Data per System manner within Project for all hours worked charge codes timely manner within 1% of the
Administrators Administrators Management System Amounts per Source
(PMS) Documents
All employees currently All employees currently All employees currently All employees currently All employees currently All unique vendor All unique vendor
assigned to assigned to assigned to assigned to assigned to invoices posted to the invoices posted to the
developmental IT developmental IT developmental IT developmental IT developmental IT General Ledger in General Ledger in
projects. projects. projects. projects. projects. January 2007 for all January 2007 for all
developmental IT developmental IT
projects. projects.
Simple Random Sample Simple Random Sample Simple Random Sample Simple Random Sample Simple Random Sample Select all invoices per Select all invoices per
of employees for all of employees for all of employees for all of employees for all of employees for all the January 2007 the January 2007
developmental IT developmental IT developmental IT developmental IT developmental IT General Ledger Extract General Ledger Extract
projects. projects. projects. projects. projects.
One time to establish One time to establish One time to establish One time to establish One time to establish One time to establish One time to establish
baseline performance. baseline performance. baseline performance. baseline performance. baseline performance. baseline performance. baseline performance.
To be determined for To be determined for To be determined for To be determined for To be determined for To be determined for To be determined for
Statistical Process Statistical Process Statistical Process Statistical Process Statistical Process Statistical Process Statistical Process
Control. Control. Control. Control. Control. Control. Control.
Project Rosters - Project Rosters - Project Rosters - Project Rosters - Project Rosters - All unique vendor All unique vendor
Employee Listings Employee Listings Employee Listings Employee Listings Employee Listings invoices posted to the invoices posted to the
General Ledger in General Ledger in
January 2007 for all January 2007 for all
developmental IT developmental IT
projects. projects.
Base Rate of Pay for the Base Rate of Pay for the Employee Timesheet for Employee Timesheet for Employee Timesheet for Invoices posted in Invoices posted in
selected employee selected employee selected employee selected employee selected employee January 2007 January 2007
Within 30 days of the Within 30 days of the Immediately after the Immediately after the Immediately after the During the four month During the four month
effective date for base effective date for base closing date for a two closing date for a two closing date for a two period January through period January through
rates provided by the rates provided by the week payroll period week payroll period week payroll period April 2007 within PMS April 2007 within PMS
System Administrators System Administrators applicable to PMS applicable to PMS applicable to PMS for expense entries for expense entries
1
 Sampling Plan for
Cost Data Integrity Project

Where to Sample > Rate Table in the Project Rate Table in the Project Electronic Timesheet in Electronic Timesheet in Electronic Timesheet in Invoice Numbers and Invoice Numbers and
Management System Management System the Project Management the Project Management the Project Management Amounts per the Amounts per the
System System System General Ledger General Ledger

Cost Data Integrity Project 2

 Sample Results - Labor Costs
Cost Data Integrity Project
Summarize Steps for Sampling Timesheets:

1. Compile all project rosters and list all employees in alpabetical order.
2. Calculate a population size for the sample:
Total Number of Employees in Population 323
Number of Timesheet Processing Cycles in 2007 24
Total Population of Timesheets in 2007 7,752
3. Calculate a sample size given a margin of error of 5% and a population of 323 employees:
Sample Size Calculator used > http://www.surveyguy.com/SGcalc.htm
Sample Size Required is 176
4. Select the sample of employees for conducting the measurement tests of timesheets (E.1, E.2, E.3, E.4.i & E.4.ii)
5. Select the two week pay period for timesheet testing: 10/26/2007
6. Use Check Sheets to take the sample and capture the sample data.

Determine the Baseline Level of Performance per the Measurement Results:

Total Number of Active Employees assigned to all Developmental IT Projects 323
Number of Defects per Timesheet 5
Total Opportunities for Defects 1,615 Use the Sigma Calculator to
calculate the values below:
Defects per Sigma
Summarize the Results of the Sample: Defects Million (DPMO) Level
Timesheet was not entered into PMS during live pay period 41 126,935 2.64
Timesheet did not account for all hours during the two week period 11 34,056 3.32
Timesheet was entered with an invalid charge code 17 52,632 3.12
Base Rate of Pay applied to Timesheet was not valid within 1% 64 198,142 2.35
Fringe Benefit Rate applied to Timesheet was not valid within 1% 77 238,390 2.21
Total Defects Found 210
Overall DPMO 130,031
Sigma Level 2.63
 Sample Results - Vendor Invoices If the invoice was posted,
Was this invoice posted to is the amount accurate
Cost Data Integrity Project PMS on Time? within 1%?
Unique Invoices per January 2007 General Ledger for Developmental IT Projects
Project ID Cost Code Trans Code Trans Type Vendor Name Invoice Number Date Amount Count
D001196QC02 250 1107MG48732 VP A L International 3778 1/3/2007 27,500.00
D001196QC02 250 1107MG48733 VP A L International 3778 1/3/2007 15,890.35
3778 Total 43,390.35 1 Yes Yes
D009441GS02 250 1107MV23337 VP Abscia Engineering J07-DOE-093 12/29/2006 705.07
J07-DOE-093 Total 705.07 1 Yes Yes
D008763VM01 258 1107PL66733 VP Acess Management 7665R 12/31/2006 316,058.70
7665R Total 316,058.70 1 Yes Yes
D007566MJ03 210 1007JH12004 VP Aiden Management Systems DOEA-088 12/28/2006 1,203.72
DOEA-088 Total 1,203.72 1 No Unable to Test
D008632JS02 251 1107EC11177 VP Applion Services Ltd 345509 1/1/2007 23,864.00
D008632JS02 251 1107EC11178 VP Applion Services Ltd 345509 1/1/2007 8,792.00
345509 Total 32,656.00 1 Yes No
D002889YL02 250 1107AL67110 VP Bishop Testing Serv J-07776 12/31/2006 1,237.43
J-07776 Total 1,237.43 1 No Unable to Test
D002889YL02 230 1107AG01191 VP Central Office Distr 0107-B116 1/2/2007 117.23
D002889YL02 230 1107AG01192 VP Central Office Distr 0107-B116 1/2/2007 360.29
0107-B116 Total 477.52 1 No Unable to Test
D018322HE01 250 1107RN23887 VP Centric Corp JU543 1/4/2007 12,606.12
JU543 Total 12,606.12 1 Yes No
M005912LQ02 251 1107PJ02322 VP Ciper Security LLC 780107223 1/3/2007 150,734.73
M005912LQ03 251 1107PJ02321 VP Ciper Security LLC 780107223 1/3/2007 185,671.08
780107223 Total 336,405.81 1 Yes Yes
D008763VM01 254 1107KB38876 VP Data Control Management 75532 1/3/2007 100,000.00
75532 Total 100,000.00 1 Yes Yes
D002743LB02 251 1107TE47683 VP Data Management Systems 8996 1/4/2007 114,620.35
8996 Total 114,620.35 1 Yes Yes
D001196QC02 250 1107EW89673 VP Defense Systems USA 786-P 1/4/2007 13,848.00
786-P Total 13,848.00 1 No Unable to Test
D002784NC01 251 1107UE76553 VP E S K Systems Eng 5670-01-33 12/31/2006 19,026.26
D002784NC01 253 1107UE76554 VP E S K Systems Eng 5670-01-33 12/31/2006 128,887.20
5670-01-33 Total 147,913.46 1 Yes Yes
D002981BR02 251 1107KU14556 VP Esset Systems 9006-J78 12/31/2006 12,250.00
9006-J78 Total 12,250.00 1 No Unable to Test
D002743LB02 232 1107UB21196 VP Federal Express 25687 1/27/2007 85.57
D002743LB02 232 1107UB21197 VP Federal Express 25687 1/27/2007 33.05
D002743LB02 232 1107UB21198 VP Federal Express 25687 1/27/2007 30.06
D002743LB02 232 1107UB21199 VP Federal Express 25687 1/27/2007 23.61
D002743LB02 232 1107UB21200 VP Federal Express 25687 1/27/2007 38.22

Cost Data Integrity Project Initial Test Results 4

 Sample Results - Vendor Invoices If the invoice was posted,
Was this invoice posted to is the amount accurate
Cost Data Integrity Project PMS on Time? within 1%?
D002743LB02 232 1107UB21201 VP Federal Express 25687 1/27/2007 97.12
D002743LB02 232 1107UB21202 VP Federal Express 25687 1/27/2007 183.23
25687 Total 490.86 1 No Unable to Test
D002743LB02 251 1107FM76341 VP G T S Corp EG783-21 1/5/2007 14,825.24
D002743LB02 251 1107FM76342 VP G T S Corp EG783-21 1/5/2007 24,529.28
EG783-21 Total 39,354.52 1 No Unable to Test
D002784NC02 250 1107ES86752 VP General Computing 0701-932-110 1/3/2007 166,795.60
D002784NC02 251 1107ES86753 VP General Computing 0701-932-110 1/3/2007 19,022.01
D002784NC02 253 1107ES86754 VP General Computing 0701-932-110 1/3/2007 161,689.29
0701-932-110 Total 347,506.90 1 Yes Yes
M005912LQ03 250 1107PM06772 VP Global Network Systems 785-01-07-112 1/3/2007 52,061.41
785-01-07-112 Total 52,061.41 1 No Unable to Test
D009441GS02 230 1107JR30085 VP Heltra Inc 27089 1/2/2007 6,250.00
27089 Total 6,250.00 1 No Unable to Test
D001139HT03 250 1107AG06777 VP Heltra Inc 27096 1/2/2007 129,296.11
27096 Total 129,296.11 1 No Unable to Test
D002743LB02 251 1107DP34283 VP Intimax Technologies 01-78944 1/4/2007 460,623.31
01-78944 Total 460,623.31 1 Yes Yes
D002743LB02 254 1107DP76532 VP Intimax Technologies 01-78948 1/4/2007 34,502.64
01-78948 Total 34,502.64 1 No Unable to Test
D008763VM01 254 1107FR96774 VP J M International B73G099 12/31/2006 628,686.50
B73G099 Total 628,686.50 1 Yes Yes
D002743LB02 251 1107RV10886 VP Juniper Services 7534 12/31/2006 46,239.90
7534 Total 46,239.90 1 No Unable to Test
D002743LB02 251 1107JS75541 VP Juniper Services 7539 12/31/2006 15,860.48
7539 Total 15,860.48 1 No Unable to Test
D018322HE01 250 1107LU46533 VP Juniper Services 7542 1/3/2007 113,727.01
7542 Total 113,727.01 1 No Unable to Test
D002743LB02 251 1107EP20966 VP M L Systems Engineerinig J79086 1/3/2007 9,079.86
D002743LB02 251 1107EP20967 VP M L Systems Engineerinig J79086 1/3/2007 66,249.90
J79086 Total 75,329.76 1 No Unable to Test
D009441GS02 250 1107SW13206 VP M S A Technology 164558 12/31/2006 233,327.32
164558 Total 233,327.32 1 No Unable to Test
D002743LB02 253 1107YZ18897 VP Markus Group Consulting JS-122-03 12/31/2006 63,438.32
JS-122-03 Total 63,438.32 1 No Unable to Test
D018322HE01 250 1107YH17834 VP Markus Group Consulting JS-127-04 12/31/2006 27,866.55
JS-127-04 Total 27,866.55 1 No Unable to Test
D018322HE01 250 1107FG46321 VP Myers Demlin 89-667S 1/3/2007 44,543.92
D018322HE01 250 1107FG46322 VP Myers Demlin 89-667S 1/3/2007 51,989.99
89-667S Total 96,533.91 1 No Unable to Test

Cost Data Integrity Project Initial Test Results 5

 Sample Results - Vendor Invoices If the invoice was posted,
Was this invoice posted to is the amount accurate
Cost Data Integrity Project PMS on Time? within 1%?
D008763VM01 254 1107FC30988 VP Oros Systems Engineering PU449-332 12/31/2006 208,880.32
PU449-332 Total 208,880.32 1 Yes Yes
D001196QC02 250 1107BH21123 VP Puller Staffing Serv UT9956 1/3/2007 29,075.00
UT9956 Total 29,075.00 1 No Unable to Test
D001196QC02 250 1107VS78555 VP Questin Johnson P5666 12/31/2006 19,204.14
D001196QC02 250 1107VS78556 VP Questin Johnson P5666 12/31/2006 15,773.29
P5666 Total 34,977.43 1 No Unable to Test
D002743LB02 251 1107EK45213 VP Simple Systems Inc 1345 12/31/2006 7,420.00
1345 Total 7,420.00 1 No Unable to Test
D003671MT03 251 1107AK11309 VP Singo Technical Serv 78-099 12/31/2006 67,110.82
D003671MT03 251 1107AK11310 VP Singo Technical Serv 78-099 12/31/2006 2,229.15
78-099 Total 69,339.97 1 No Unable to Test
D009441GS02 250 1107TU69922 VP Software Tech Engineering L-09-4445 1/3/2007 327,417.09
D009441GS02 250 1107TU69923 VP Software Tech Engineering L-09-4445 1/3/2007 26,613.72
D009441GS02 250 1107TU69924 VP Software Tech Engineering L-09-4445 1/3/2007 144,913.89
D009441GS02 250 1107TU69925 VP Software Tech Engineering L-09-4445 1/3/2007 118,647.22
D009441GS02 250 1107TU69926 VP Software Tech Engineering L-09-4445 1/3/2007 144,108.76
L-09-4445 Total 761,700.68 1 Yes No
D001139HT03 250 1107PT11477 VP Software Tech Engineering L-11-4451 1/3/2007 249,626.19
L-11-4451 Total 249,626.19 1 No Unable to Test
D001196QC02 251 1107TU32876 VP Southern Research Corp 786-221 12/31/2006 628,517.82
786-221 Total 628,517.82 1 Yes Yes
D001196QC02 251 1107SV45531 VP Southern Research Corp 786-224 12/31/2006 409,777.26
786-224 Total 409,777.26 1 Yes Yes
D002743LB02 251 1107NE34543 VP Stevens Group Ltd J071223 1/3/2007 12,760.78
D002743LB02 251 1107NE34544 VP Stevens Group Ltd J071223 1/3/2007 15,674.22
J071223 Total 28,435.00 1 No Unable to Test
D002743LB02 251 1107RB21987 VP Titan Systems Engineering 01-07-118-01 1/4/2007 476,747.75
D002743LB02 251 1107RB21988 VP Titan Systems Engineering 01-07-118-01 1/4/2007 456,848.77
01-07-118-01 Total 933,596.52 1 Yes Yes
D009441GS02 250 1107UM88911 VP Transfer Tech LLP HJ007-115 12/29/2006 8,432.10
D009441GS02 250 1107UM88912 VP Transfer Tech LLP HJ007-115 12/29/2006 30.00
D009441GS02 250 1107UM88913 VP Transfer Tech LLP HJ007-115 12/29/2006 1,496.25
D009441GS02 260 1107UM88914 VP Transfer Tech LLP HJ007-115 12/29/2006 76.12
D009441GS02 260 1107UM88915 VP Transfer Tech LLP HJ007-115 12/29/2006 271.22
D009441GS02 260 1107UM88916 VP Transfer Tech LLP HJ007-115 12/29/2006 1,001.00
HJ007-115 Total 11,306.69 1 No Unable to Test
D001139HT03 250 1207VN13466 VP V L M Associates J8890 12/29/2006 2,251.58
J8890 Total 2,251.58 1 No Unable to Test
Grand Total 6,879,372.49 44

Cost Data Integrity Project Initial Test Results 6

 Sample Results - Vendor Invoices If the invoice was posted,
Was this invoice posted to is the amount accurate
Cost Data Integrity Project PMS on Time? within 1%?

Number of Invoices Examined & Compared to PMS 44 17

Unable to Test: Vendor invoice was never posted to the Project Total Defects Found per Tests 27 3
Management System. Amount of Distortion to PMS Actual Costs 1,395,727.32
% of Total Cost that did not get posted in PMS 20%
Total Opportunities for Defects 44 17
Calculate DPMO 613,636 176,471
What is the current baseline Sigma Level? 1.21 2.43

Cost Data Integrity Project Initial Test Results 7

 If invoice amount is not
accurate, what is the amount
of the error?

8,792

2,606

Cost Data Integrity Project Initial Test Results 8

 If invoice amount is not
accurate, what is the amount
of the error?

26,614

Cost Data Integrity Project Initial Test Results 9

 If invoice amount is not
accurate, what is the amount
of the error?

38,012
1%

Cost Data Integrity Project Initial Test Results 10

Six Sigma Calculator
The calculation of a Sigma level, is based on the number of defects per million opportunities (DPMO).

In order to calculate the DPMO, three distinct pieces of information are required:
a) the number of units produced
b) the number of defect opportunities per unit
c) the number of defects
The actual formula is:
(Number of Defects X 1,000,000)
DPMO =
((Number of Defect Opportunities/Unit) x Number of Units)

Example:
A manufacturer of computer hard drives wants to measure their Six Sigma level.
Over a given period of time, the manufacturer creates 83,934 hard drives.
The manufacturer performs 8 individual checks to test quality of the drives.
During testing 3,432 are rejected.

Defects 3432
Opportunities 83934
Defect Opportunities per unit 8

Six Sigma Table: 1 690,000

2 308,000
3 66,800
4 6,210
5 320
6 3.4

Six Sigma Calculator:

Enter values in Gray cells only

A. All values required to calculate Sigma level

Defects: 210 DPMO: 130,031
Units: 323 Sigma Level: 2.63
Opportunities per Unit: 5

B. Sigma calculated based on defects and number of opportunities

Defects: 210 DPMO: 130031
Number of Opportunities: 1,615 Sigma Level: 2.63

C. Enter only the known Defects Per Million Opportunities

Enter DPMO 130,031 Sigma Level: 2.63
Source for this calculator:
http://home.xtra.co.nz/hosts/smtconz/Quality/Simple%20Six%20Sigma%20Calculator.xls
opportunities (DPMO).

nit) x Number of Units)

Sigma level.

DPMO 5111.159
Sigma Level 4.1
ulator.xls
 Summarize Test Results
Cost Data Integrity Project
PMS: Project Management System
Overall Monetary Impact of Defects for One Month:
Estimated $ % of
Type of Defect or Error Impact of Defect Total

Vendor Invoice Not Posted to PMS $ 1,395,727 77% < Critical Defect No. 1
Timesheet not entered into PMS $ 296,000 16% < Critical Defect No. 2
Vendor Invoice Amount not Correct in PMS $ 38,012 2%
Fringe Benefit Rate is off by more than 1% $ 36,200 2%
Base Pay Rate is off by more than 1% $ 33,000 2%
Timesheet activity codes are not correct $ 12,400 1%
Timesheet hours are not correct $ 9,600 1%
Total $ Amount of Defects $ 1,820,939 100%

Pareto Chart of $ Impact of Defects

$1,600,000 Vendor Invoice Not
Posted to PMS
$1,400,000
Vendor Invoice Amount
$1,200,000 not Correct in PMS
Impact Amount

Timesheet not entered

$1,000,000 into PMS
Fringe Benefit Rate is off
$800,000 by more than 1%
$600,000 Base Pay Rate is off by
more than 1%
$400,000 Timesheet activity codes
are not correct
$200,000 Timesheet hours are not
$- correct

Types of Defects