Blessed are the soft of heart, for they shall see productivity.
It's not everyday that one finds his name between the covers of a book. Under ordinary circumstances, it would be cause for celebration. But not in this case. In The Price of Government,[i] David Osborne and Peter Hutchinson use an article that I wrote for the Local Government Auditing Quarterly to demonstrate what's wrong with auditors and auditing.
In my article, I made a case for fear as a compliance tool and adversarial auditing as an effective weapon in the oversight arsenal. Of course I realized I would be running afoul of the received wisdom that thoughtful people (those who think, as opposed to those of us who don't) are pleasant, nonjudgmental, and supportive, not prickly, critical, and condemning. God forbid auditors should be the source of anyone's existential angst.
But moving beyond the post-modern mindset, Osborne and Hutchinson argue that organizations that are "too tightly controlled" (those that insist on rigid compliance) stifle innovation. "Reasonable elasticity" and "reasonable tolerance for noble failure" are a must, if meaningful productivity is to be achieved.
According to Osborne and Hutchinson, the Cro-Magnon mindset that I personify was roundly condemned in the 1993 report of the National Performance Review.[ii] For those of you unfamiliar with this publication, it was coauthored by Vice-President Al Gore and a cast of thousands. The report was the result of a six-month performance review of the federal government. No friends, you didn't misread that: Mr. Gore and his associates conducted a performance review of the federal government in six months. You might find this astonishing, if it has taken you six months to evaluate a single activity of a single department. But you forget, these were not ordinary people: they were empowered.
The vice-president spent much of his six months listening to tales of woe from frustrated public servants who had had their innovative flow thwarted by "heavy-handed" zealots from the corps of inspectors general. Instead of encouraging workers to use their imaginations to find the best way to serve the public, these storm troopers slapped people down, whenever they displayed the slightest deviation from defined norms.
And what's Osborne and Hutchinson's solution to this relentless war over mindless prohibitions? ─ performance auditing. Evidently, once the focus shifts from rules and regulations to performance measures, the lion will lie down with the lamb. Yeah, there will be universal agreement on the measures to use, their method of calculation, the validity of the data employed, and the manner of presentation. Verily, the auditors will beat their checklists into ploughshares, and there will be audit anxiety no more. Gentlemen, how little you know!
The cause of audit anxiety is not the yardstick employed, but the process of evaluation itself. We can fight over benchmarks as easily as we can fight over accounting procedures. The conversation generally goes like this:
Auditor: "We've surveyed major cities across the country. The standard for parking-enforcement officers is 38 to 45 tickets written per day. In Nonpareillia, it's 25. We (note the collegial use of the first person plural) need to explore strategies to improve performance."
Management: "Oh you can't use that standard here. Our streets are configured differently; our laws are tailored to local custom; and our method of enforcement is unique."
Unique - that's the key word. If innovation is the gold standard, Nonpareillia is the 24-carat city. Everything they do is unique: how they fill potholes; how they collect trash; how they cut grass; how they bag pimps; how they bid toothpicks; how they fix carburetors; how they demolish buildings; how they feed prisoners; how they try cases; how they defend lawsuits; how they invest cash; how they teach phonics; how they provide healthcare; how they transport cardiac arrests; and how they fill prescriptions.
Nonparellia is the city that defies comparison. They're so unique they can't even be compared to themselves. This year can't be compared to the last because circumstances have changed. They're arresting a different kind of drunk nowadays. At bottom, you will find that when it comes to performance measures, the thing being measured is often affected by the process of measurement itself. It's the indeterminacy principle applied to management.
What particularly galls about The Price of Government is its condescending naiveté. Government is run by selfless tribunes of the people slaving tirelessly in the public interest, only to be thwarted by mindless automatons, stifling creative flow. Haliburton and pork are unique to federal administrations of the wrong party; the rest of government is simon-pure.
I don't know where these guys spent their years of government service, but it must have been under a large rock. For heaven's sake gentlemen, if you were insensible to what was going on right under your own noses, didn't you ever pick up a newspaper or turn on a television set? Corruption is as much a part of government as infidelity is a part of human relations. It's pandemic. And it won't go away by joining hands and singing Up with People.
Sometime back, I was treated to a lecture on the subject of the auditor as social worker. This was just about the time that Dick Cheney was locked in mortal combat with GAO over access to the minutes of his energy meetings. Apparently, Mr. Cheney had been holding powwows with the warlords of petroleum, and our colleagues at GAO thought their deliberations might be of public interest.
Having taken the recent lecture on social work to heart, I wondered, "What's all the trouble about? Don't those troglodytes over at GAO know that we need to empower people? Don't they realize that when you trust people, they do the right thing? Haven't they heard that, under the new dispensation, auditors are supposed to function as a performance-measure resource? Don't they know that their job is to help the vice- president, not stand in the way of the obvious progress he is laboring to achieve? Why can't they just hand him a few benchmarks and back off? I mean, just because he's closeted with a group of campaign contributors, that's no reason to get all judgmental."
Osborne and Hutchinson's understanding of the audit process is bizarre. They claim that auditors roam the corridors of government, looking for people to punish, hitting them over the head with arcane regulations. The truth is, we don't make the rules; we don't enforce them; we don't mete out punishment to the wrongdoers (oh, we can always dream). Our job is to report on compliance. We're the snitches - not the policemen, not the judges, and certainly not the executioners. If rules are ill-conceived, that's not our doing; although we will listen to and report on arguments to that effect. With regard to rule making and enforcement, management is free to be as progressive or retrogressive as it pleases. And if action on audit findings is any barometer of the temper of the times, we hardly live in a draconian age.
True to their gospel of help, Osborne and Hutchinson don't just hit and run; they provide words of advice to the audit community, like Focus on results, not just money. I love this one. I hope the budget officers across this great land are listening.
To begin with, the charge that auditors (even the Cro-Magnon variety) focus on money to the exclusion of performance is patently ridiculous. But that aside, just how important is money in local government?
In some cities, people die when the fire department can't get EMS units to them fast enough. It's not that the fire departments are lax; they just don't have enough units to go around. And it's not that city management doesn't realize they're short EMS units; it's that there isn't enough money in the budget to provide them. That's why many cities don't have enough police to keep the murder rate in check, doctors to treat the indigent sick, pharmacists to fill prescriptions, or social workers to protect battered kids, keep the homeless from freezing to death, or keep the elderly from dying of heat prostration. Money is a scarce resource, and conserving it is often a matter of life and death. So please excuse those of us who see money conservation as more than a bureaucratic annoyance. Please have patience with those of us who believe that zeal in the pursuit of waste is no vice.
Enhance competition. As an example of productive audit assistance in this area, our authors offer a program under which auditors in the city of Phoenix audit the competitive-bidding process. In Philadelphia, we took a look at this a few years back. We found that city management was bidding one set of commodities and buying another; that a vendor list for office supplies included a hot dog stand, a hauler, a bag company, a pest control company, an iron supplier, and a cutlery dealer; and that the city had managed to auction off 16 floors of office furniture for $5,900. What went wrong? Maybe we hadn't spent enough time consulting with management about performance measures.
Spread best practices. Auditors should maintain a database of best practices and publish guidebooks. I'm sure this would work very well in Philadelphia. Between sessions of wracking recalcitrant managers in our local version of the Inquisition, we do find time to speak to them of benchmarks. The answer is generally the same. "If only we had the money to do that. But we're so short of resources; the only thing we can do is try and keep the fires under control." Talking about efficiency measures around here is like spitting into the wind. What we generally do is highlight just how poor conditions are, and then outline how even the most primitive performance measures are lacking.
Emphasize managing risks, not zero tolerance. According to Osborne and Hutchinson, traditional auditors emphasize "zero tolerance, . . . slapping people's wrists when they bend the slightest rule to improve service to customers." If auditors would only do risk analysis, they wouldn't be wasting time harassing well-intentioned managers who cut a few corners in pursuit of the higher good.
I've seen a lot of rules bent in the last 28 years, but I can't remember a single instance where they were bent to improve service delivery. In general, rules are bent (crushed, decimated, laid waste) either to avoid work or to serve someone's personal interest, not the public interest. And with regard to risk assessment, auditors have been doing this since the beginning of time. Even we Cro-Magnons do it. Granted, it involves animal entrails and conjuring the dead, but we do it nonetheless.
Osborne and Hutchinson's management theories suffer from a logical fallacy that afflicts many thinkers of the post-modern age, namely, that man is not only capable of infinite perfection, but that he is quickly approaching the perfection point, evidence to the contrary from across the globe notwithstanding. Homo homini lupus (man is a wolf to man) is as true today as when Plautus coined it in the 2nd Century B.C. Much of what goes on in the public sector is not in the public interest, and government auditors need to be as ruthless in rooting out self-serving activity as the folks are who pursue it. Auditors should be courteous, polite, and professional; but making friends is not the first order of business. Our customer is the taxpayer, not the auditee.
Mike Egan is an audit administrator with the Philadelphia City Controller's Office, where he has been employed for the past 28 years. For the last 17 of those years, Mr. Egan has specialized in performance auditing. The opinions expressed in this article are those of Mr. Egan and do not necessarily reflect the opinions of the City Controller's Office or the city controller.
[i] The Price of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis, David Osborne and Peter Hutchinson, Basic Books, 2004.
[ii] From Red Tape to Results: Creating a Government that Works Better and Costs Less, Al Gore and the National Performance Review. September 1993.
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