1. datathat savesourworld
ENFOS Webinar
with Environmental Risk Communications, Inc.
Three Critical Financial Controls for Reserve Management
February 24 and 25 , 2015

2. Contains ENFOS confidential and proprietary information.
2
About Us
ERCI builds tools, training
and reports for duty
holders to recognize,
measure and display their
environmental and asset
retirement obligations.
ENFOS is a cloud software
platform that expertly
manages all of the
complexities of remediation
and decommissioning - from
the financial to the technical.

3. Contains ENFOS confidential and proprietary information.
3
 Opportunity Statement
 Financial Controls Overview
 Work Breakdown Structure Control
 Work Commitment Control
 Spend Control
 Questions and Answers
Agenda

4. Contains ENFOS confidential and proprietary information.
4
Speaker Background – Roger Well, C.P.G.
 Currently leading customer deployments on over 100,000
projects and $10B in forecasts and transactions through
the ENFOS enterprise platform
 26 years of environmental remediation and
decommissioning experience in various technical and
managerial roles
 Author of recent white papers:
 The Case for the Enterprise Environmental Liability
Management System
 Operational Risk Management for Environmental
Remediation
 Operational Excellence for Environmental
Remediation Programs
 M.B.A., Keller Chicago
 M.S., University of Toledo (Hydrogeology)
 B.A., Monmouth College (Geology)
Roger Well
Executive Vice President & COO
roger@enfos.com
Naperville, IL

5. Contains ENFOS confidential and proprietary information.
5
Speaker Background – John Rosengard
 21 years at ERCI; founder/creator of Defender software suite
 14 US corporate remediation teams (>60 CPA audits)
 3300 unique liabilities
 200 decision analysis projects
 4 US port authority remediation teams (>10 CPA audits)
 Counterparty/non-performance risk tracking system
 MBA, Northwestern
 BS, Georgetown
John Rosengard
President & CEO, ERCI
john@erci.com
Oakland, CA

6. Contains ENFOS confidential and proprietary information.
6
Write the Caption Contest

7. Contains ENFOS confidential and proprietary information.
7
Opportunity Statement

8. Contains ENFOS confidential and proprietary information.
8
What Every Executive Wants
High Visibility (aka “No Surprises”)
Strategic Alignment with Corporate Value Drivers
Improved Effectiveness and Efficiency of Operations
Data-Driven Decision Making and Narrative
1
2
3
4

9. Contains ENFOS confidential and proprietary information.
9
Convergence of Practices & Competencies

10. Contains ENFOS confidential and proprietary information.
10
The Charge of Internal and External Auditors
 Enforce generally-accepted accounting principles
• Relevant
• Faithful Representation (fair value)
 Encourage good capital stewardship
• Measure similar liabilities in similar ways
• Confirm spending matches liability burn-down
• Anticipate repeats of lessons learned

11. Contains ENFOS confidential and proprietary information.
11
Matching Spending to Liability Burn-down
 Remeasure liability periodically at “fair value”
• Remedy implemented
• Regulator/community accepted remedy
• Counterparty default risk resolved/paid
 Remember: remaining liability ≠ uncommitted funds
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
Q1 Q2 Q3 Q4
Liability Commitment Spending

12. Contains ENFOS confidential and proprietary information.
12
Financial Controls Overview

13. Contains ENFOS confidential and proprietary information.
13
Business Objectives
(Governance, Control, Certification, Risk Management)
Operational System
(front-end)
ERP System
(back-end)
Internal
Controls
Automated
Controls
Reporting
Controls
Security
Controls
Manual&Procedural
Controls
Efficient and
Sustainable
Operations
Technology People
A Business Model for Control Systems

14. Contains ENFOS confidential and proprietary information.
14
Integrated Business Process Management
Enables Financial Controls
Forecasting &
Budgeting
Vendor
Proposals
Purchases
Invoices &
Recovery
Commitments
can’t Exceed
Plan Balance
Spend can’t
Exceed
Commitments
LEVEL 1 – “Phase”
LEVEL 2 (optional) – “Activity”
LEVEL 3 (optional) – “Element”
LEVEL 4 (optional) – “Component”
WORK BREAKDOWN STRUCTURE
Common thread across all processes
Finance Workflow Summary
1
2 3

15. Contains ENFOS confidential and proprietary information.
15
Work Breakdown Structure Control

16. Contains ENFOS confidential and proprietary information.
16
The “Harmonized” WBS Explained
 Definition: A WBS that is uniformly applied across all financial
activities from forecasting through spending on every project
in the portfolio
 But not necessarily applied to all WBS levels in all financial activities
(to be clarified)
 Do not confuse the company-wide WBS to project-level work tasks
contained in a contractor scope-of-work
 The more granular the detail, the more financial control (there may be
a point of diminishing return)
 The operational system contains the detail, the ERP system may not

17. Contains ENFOS confidential and proprietary information.
17
The “Harmonized” WBS Example
WBS Level
Forecasts &
Budgets
Proposals &
Purchases Invoices Example
 Phase X X X Remedial Implementation
 Activity X X X Groundwater Remediation
 Element X X Engineering Design
 Component X Direct Labor
 When the work is invoiced, the lowest level of details are known and should be
tracked uniformly across the portfolio
 When forecasts are made, because of the uncertainty, lower levels of detail may
be useful for cost buildup but not for financial control purposes
 Harmonized WBS provides the highest visibility and the baseline data required
for additional financial controls during project execution stages

18. Contains ENFOS confidential and proprietary information.
18
Work Commitment Control

19. Contains ENFOS confidential and proprietary information.
19
 Definition: Monitoring and controlling the expenditure
commitment against a budget and balance
 A harmonized WBS is essential if the control is to be made in any
detail below the overall total budget/balance
 Four key financial variables used for the control:
1. Current Balance (e.g., of the Reserve or Budget)
2. Open Commitments
3. Available to Commit
4. New Commitment Request Amount (i.e., the Proposal)
 All four variable amounts change through time as work progresses
– many moving parts
The Commitment Control Explained

20. Contains ENFOS confidential and proprietary information.
20
Commitment Control Example
Phase Activity
Current Year
Plan
CY
Expenditure CY Balance
Open
Commitments
Available
to Commit
Site Characterization
Project Management $1,000 $1,000 $0 $0 $0
Subsurface Investigation $5,000 $5,000 $0 $0 $0
Monitoring & Sampling $6,500 $3,000 $3,500 $1,500 $2,000
Reporting $5,000 $2,000 $3,000 $3,000 $0
Interim Corrective Measures
GW Plume Control $12,000 $2,000 $10,000 $5,000 $5,000
Water Disposal $5,000 $2,500 $2,500 $2,500 $0
Remedial Options Appraisal
Hydrogeological Assessment $10,000 $4,000 $6,000 $6,000 $0
Alternatives Evaluation $4,000 $0 $4,000 $0 $4,000
Engineering Study $25,000 $10,000 $15,000 $15,000 $0
Construct & Startup
GW Remedial System Install $350,000 $0 $350,000 $0 $350,000
OM&M Plan $1,000 $0 $10,000 $0 $10,000
H&S Plan $5,000 $0 $5,000 $0 $5,000
System Startup $18,000 $0 $18,000 $0 $18,000
TOTALS $456,500 $29,500 $427,000 $33,000 $394,000
Configuration Options: 1. Current Year by WBS
2. Current Year by Plan Total
3. Lifecycle by WBS
4. Lifecycle by Plan Total
Commitment Controls
Control Monitoring
Hard Stop/Control

21. Contains ENFOS confidential and proprietary information.
21
Spend Control

22. Contains ENFOS confidential and proprietary information.
22
The Spend Control Explained
 Definition: Monitoring and controlling expenditures against
a work commitment for an entire project or a subproject
 A harmonized WBS is essential if the control is to be made in any
detail below the overall total budget and work commitment scope of
work detail
 Three key financial variables used for the control:
1. Commitment Open Amount
2. Available to Spend
3. Expenditure Amount being Processed
 May be linked to Earned Value Management

23. Contains ENFOS confidential and proprietary information.
23
Spend Control Example
Phase Activity
Open
Commitments
Purchase
Order 1
Balance
Purchase
Order 2
Balance
Invoice 1
(PO1)
Invoice 2
(PO2)
Site Characterization
Monitoring & Sampling $1,500 $1,500 N/A $1,500 N/A
Reporting $3,000 $3,000 N/A $2,000 N/A
Interim Corrective Measures
GW Plume Control $5,000 $5,000 N/A $6,000 N/A
Water Disposal $2,500 N/A $2,500 N/A $1,500
Remedial Options Appraisal
Hydrogeological Assessment $6,000 $4,000 $2,000 $4,000 $2,000
Engineering Study $15,000 $5,000 $10,000 $5,000 $12,000
TOTALS $33,000 $18,500 $14,500 $18,500 $15,500
Configuration Options: 1. PO Total
2. PO and Change Order Individually
3. By WBS Level
4. Rate Sheet Item Quantity Level
Validated
Rejected
Spend Controls

24. Contains ENFOS confidential and proprietary information.
24
In Summary: Putting it Back Together
Forecasting
& Budgeting
Vendor
Proposals
Purchases
Invoices &
Recovery
Commitments
can’t Exceed
Plan Balance
Spend can’t
Exceed
Commitments
LEVEL 1 – “Phase”
LEVEL 2 (optional) – “Activity”
LEVEL 3 (optional) – “Element”
LEVEL 4 (optional) – “Component”
WORK BREAKDOWN STRUCTURE
Common thread across all processes
Finance Workflow Summary
1
2 3

25. Contains ENFOS confidential and proprietary information.
25
Thank You for Attending
For follow-up, please contact:
Lacey Orr
(630) 689-0220 x17
lacey@enfos.com

26. Contains ENFOS confidential and proprietary information.
26
Questions and Answers