Posted by: knightbird | April 16, 2012

Audit

It’s been some time since I posted, but I just had an employee come and tell me about the most recent audit of our pension accounts. The entire audit for 2 pension plans took just 4 days and generated only 2 questions that were answered in less than a minute, with document backup. Compare this to audits that lasted the better part of 2 weeks and generated 30 to 40 serious questions taking much longer to answer. We apparently saved about $7,000 as a result of serious lean implementation. Quite obviously, the change didn’t happen overnight. And the lessons were hard earned through staff participation in a number of tough audits over the past few years.

The first improvement requirement is great cooperation and teamwork, which we had. Many other organizations don’t recognize problems readily, and if they do, blame the problems elsewhere. We don’t worry about blame, only on fixing.

And so the second improvement requirement is continuous work to fix-acknowledge defects without the blame and formulate a response. Then we document the response, assign responsibilities and due dates. Guess what? It worked.

We did have a lot of challenges to meet to conduct this audit. We have been working on payroll issues for some time now. A flawed changeover to new financial accounting software caused a lot of issues including pension allocation issues. We had to work on good reconciliation processes, which we did. We also have a great document management system, but some documents are not under our control. So, we had to work on a process of identifying the needs of the auditors (like asking them what they needed in advance) and working to secure the documents. Little by little, with the acknowledgement of each problem, we improved. The end result is a sustainable process for ensuring great audits.

So what’s up next? Our Head Start audit is. We expect to ace this one as well. Why? We have cooperation, teamwork and pursue continuous improvement. I really love my job and the people I work with.

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Responses

  1. Great message for lean initiatives! It is this long strenuous work that scares a lot of management figures resulting in a backslide to old command and control principles. Usually the long time taken to realize these outcomes are not borne all throughout the span of the lean work. Tougher commitment is required to change one’s mind set to “No blame, no shame. Fact based, non judgmental”. A mentor always reminded me, “You can only change yourself”. If this was given you, what would your approach to this be?


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