Traditionally auditors have been accountants, who audit the books for misuse of funds and government property, make recommendations and follow up on corrective actions. With Enhanced Auditing the auditors job function is expanded to audit all government resources. Government resources include use of public funds, property (including facilities) and employee man-hours. If you are tasked with eliminating waste fraud and abuse why would you limit this to money and property? Most government waste is in man-hours yet this is mostly off limits for auditors. The reason is found in that tradition auditors are usually accountants who have only looked at the books to follow the money and property trail limiting the scope of their job.
With Enhanced Auditing Budget Analysts are added to the staff to support the implementation of Enterprise Lean by maintaining the Enterprise Lean Data which contain the bottoms-up databases of actual labor costs for each state Agency.
I see Enhanced Auditing as the best independent way to monitor Functional staffing. This is done by periodically reviewing staffing levels to be sure they are following those determined by the original Lean studies. When there is a significant change in the Function’s processes an Budget Analyst Audit team should be brought in to determine the correct staffing requirements.
Why is Enhanced Auditing one of the best tools for reforming government? Because it is a cost effective way to monitor reforms. The reason is found in the duty of auditors to protect the public’s interests. Using simple logic public interests include all of the state’s resources and logically auditors should be tasked with protecting all of the public’s resources. This is the best argument that can be used in convincing the State Legislature to fund Enhanced Auditing. A second reason is that Budget Analysts staff can be added slowly to the State Auditor’s office until they prove their worth over time.
Example of Enhanced Auditing
A large bureaucratic agency fails to meet its Performance Budgeting goals and does nothing to take corrective action. There is suspected over runs in man-hours and the legislature wants to cut the agency’s budget. The agency responds that if the budget is cut public services will be cut. The legislature calls for an audit of the specified public services and the Budget Auditors respond. They determine what the correct man-hours should be and the budget is cut accordingly. The new method for doing a function’s processes is included in the functions next budget.
The reason that current state auditing practices can be easily adapted to enhanced auditing is that it is an established part of all state governments and is accepted as a watchdog of state funds and property. The added responsibility for monitoring waste in man-hours would require the addition of time-study auditors. Although the state auditing function would require increased funding the payoff can be as much as five times the expenditure for the time-study auditors. With the current waste in some bureaucracies there is an enormous potential for savings in tax dollars.
One of the first problems to be encountered is the rules and regulations set by bureaucracies and employee unions. Bureaucracies and employee unions have both worked to set unnecessary rules that encourage inefficiency in order to guarantee employment. If it can be established that these rules and regulations were enacted to purposely create the inefficient use of man hours then they may actually be illegal because of the resulting loss in public resources. Budget Auditors are tasked to time study a function’s processes, determine the correct staffing level and implement the revised work methods.
I recommend that a form of enhanced auditing be implemented to provide review support for the work that my recommended Lean Teams have done as a result of my General Reform Model implementation. Over time efficient functional processes need to be reviewed due mostly to changes in the method of performing the function. Auditors and Budget Analysts are the best qualified state personnel for identifying and correcting problems of over staffing.
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