- The Quarterly
- Audit Excellence
|Quarterly: Fall 2020 - Eric Spivak|
Towards a Healthier Relationship: Reflections on an Auditee’s Stress at Being Audited
I suggest that as a profession, we consider how our approach to report writing ultimately impacts our ability to achieve the desired results of improved public services.
A speaker at last year’s ALGA conference rhetorically asked, “When was the last time you included a positive finding in an audit report?”
The CAE sitting next to me whispered, “That’s not my job; that’s not what I’m paid to do.”
I cringed at the CAE’s perspective. I believe that in the majority of situations, the “negatives only” approach to internal auditing is counterproductive to developing an open collaborative relationship that can maximize audit’s utility to the organization.
The “negatives only” approach brings back a memory from an exit conference I attended during my first year as an auditor. Holding the draft report, the auditee’s director asked, “I’m not arguing the facts, but can we talk about the tone?” At the time I worked for an audit shop that used the “negatives only” approach.
If, as a county auditor, my goal is to help a department improve its operations, then I have got to consider all the factors that can hinder me. Ideally, auditees would be open about their knowledge or suspicions as to where their operations aren’t optimally efficient or effective. This would allow us to focus our time on verifying the condition (not identifying it) and working towards root cause analysis. However, when auditees are overly worried about the audit report, they are less likely to be forthcoming and the process can turn into a game of hide and seek. This hinders me.
It may be easy to blame the auditee for not being open, but to borrow an old adage, “You shouldn’t judge a person until you’ve walked in their shoes.”
Consider the following….
Recently I was conducting an entrance conference with a department director. His stress and anxiety about the upcoming audit were visibly notable. This surprised me. In the 7 years that I’ve been county auditor, we had audited various areas of his department. In my humble, and of course objective opinion, the audit team had always delivered fair and balanced audit reports. I didn’t see any reason for him to be concerned, even though this would be the first audit of his department since he elevated to the position of department director.
Not one to keep my thoughts to myself, I finally asked him why he was so stressed about being audited. He responded, “I’ve put my heart and soul into this department.”
It was a fact I knew to be true based on my frequent formal and informal interactions with the director and my knowledge of the programs and community partnerships he had implemented during his tenure as director. He was not a slacker coasting towards a cozy government pension. He was, in my opinion, a guy who cared about his community and was doing his best to serve it.
If peer review or your annual performance review makes you nervous, think about what it must be like to undergo a full audit. To us an audit is an objective review conducted for the purpose of identifying opportunities for improvement. For the auditee, an audit is the equivalent of peer review combined with an annual performance review multiplied by the many challenges (budgetary, regulatory, staffing, political, etc. ) involved in running a department that will likely result in the auditors finding some shortcomings. For an auditee, the audit is these shortcomings resulting in a frontpage headline lambasting the auditee for being incompetent.
Though the director had experienced several audits in the past, this was going to be the first audit since he became department director. I should have recognized how stressful this would be for him.
From “Shame and Blame” to “Acknowledgement and Encouragement”: Shifting the Focus
Later, as I pondered the director’s perspective, the phrase “strength-based approach” floated into my thoughts. I hear this phrase often from my wife regarding her organization’s work involving parents with children in the child protective services system. Similarly, I often hear the phrase “positive reinforcement” and the word “encouragement” used in conjunction with parenting. We should consider the degree to which this type of perspective can be adapted to auditing.
As a profession, I believe it is in our best interest to give serious reflection to the perspective of the auditee and to the manner in which our reports are written and received. I believe that if we shift our approach to report writing, we can reduce the auditee’s stress about the audit process. This shift, over time, will build healthier auditor-auditee relationships. In turn, this will benefit our organizations.
Facts are facts. I’m not suggesting that we back off of reporting on operational shortcomings. We do have a role in ensuring accountability and transparency. However, I am suggesting that we have a choice in how we present the findings. Context is everything, as the saying goes.
Towards A Healthier Relationship
Can you imagine a world in which auditees want to be audited? I live in that world. The day after cringing at the “that’s not my job” comment I heard at the ALGA conference, I returned to my office. The first voicemail I listened to started with, “Hi Eric. You probably don’t hear this much, but I was hoping you could start the audit of my department soon.” True story.
I take great pride in the fact that during my tenure as county auditor, the audit team has become seen as a valuable resource. About half our audits are done at the request of department directors. Imagine that—being asked by a director to come in and audit their department!
I ask that you consider whether becoming a kinder, gentler auditor can, in the long term, produce better results for the organization you work for. By being seen as a partner and not an antagonist, you may be more likely to achieve the outcome we all desire: Improved Government Operations.
Avoiding inflammatory language, recognizing real world constrains, and acknowledging sincere efforts will help your department be viewed as fair and objective and ultimately lead to you being seen as a partner.
Implementation of these seven strategies has helped me transition my audit shop from being feared and avoided to being viewed as a resource by the majority of departments I have audited. I am confident that the fearful director I discussed earlier will, after he sees the final report, realize his level of fear was unwarranted. Most importantly, I think he will be comfortable requesting our assistance in the future and that is what best positions audit to be catalyst for organizational improvements. I encourage you to shift from the “blame and shame” approach to report writing and give the "acknowledge and encourage" approach a try.
About the Author
Eric Spivak has been providing audit, consulting, and training services for over 25 years, working primarily at the state and local levels of government. As a trainer, Eric has worked internationally training auditors in Micronesia, Bhutan, and India and has been a presenter at numerous national and regional audit conferences. For the past 7 years he has served as County Auditor for Jackson County, Oregon.