Audits not necessary – just answer two simple questions
Troy Media – by Robert Gerst
Issues and controversy are piling up like rail cars in an organizational train wreck. In the past two months we’ve had poor food quality in seniors facilities, the bungled closing of an extended care facility in Carmangay and now, news Alberta Health Services (AHS) hired someone with a history of controversial expenditure claims as its Chief Financial Officer (CFO), the position responsible for financial control.
Allaudin Merali was CFO at AHS for three months. He resigned just as news of his $346,000 of expense tab as CFO of the former Capital Health Authority was about to be made public. Expenses included extravagant meals, wine and accessories for his Mercedes Benz.
When Capital Health Authority was folded into AHS in 2008, Merali left with $2.6 million in severance and supplementary retirement benefits and went to work as a consultant for eHealth Ontario. He was among the consultants whose fees and expenses fueled concerns about overspending and mismanagement at that agency.
Despite this, or perhaps because of it, Merali was hired back by AHS as CFO. AHS only sought his resignation when it became clear CBC was breaking the story. Shiela Weatherill resigned from the AHS Board of Directors shortly thereafter. Weatherill was CEO of Capital Health and Merali’s boss when many of the expense claims were made.
Two big questions linger. How could Mr. Merali have been hired? What does this say about AHS’s culture and ability to exercise care and diligence?
Accountability through auditing
Despite claims to the contrary, these questions won’t be answered. That’s because audits, three of them in this case, are being used to provide the answers. Audits don’t do that.
Audits are public relations tools, designed to convince the public somebody is doing something, even though that something is nothing of consequence. Providing only an illusion of accountability, audits guarantee that root causes of problems go unaddressed. Stealing a phrase from Norman Augustine, former Chairman of Lockheed Martin Corporation; “The only thing audits fix is the blame“, and you can bet no audit blamed the guy hiring the auditor.
That’s because audits are not concerned with ethical or rational behavior. They’re about compliance, comparing actions to a set of rules to determine if the rules were followed. What is not examined is whether the rules themselves make any sense. Typically, they don’t.
That’s why people in rules-obsessed organizations are caught between a rock and hard place. They must choose between compliance, doing their job according to the rules and doing it badly, or competence, doing the job well and risking the whip of auditing overseers. This is accompanied by mass confusion at head office as to why morale is low.
True to form, the first of the audits will have an independent accounting firm determining whether Merali’s expense claims adhered to policies and practices. Who cares? Regardless of the policies, why would anyone apply and expect sign off on such expenses? Why was Merali hired? What kind of organization finds these things acceptable, but only when kept from public view?
Another promised audit has the Auditor General examining AHS expense and travel policies. The result is preordained. When auditors audit the rules, you only get more rules.
The last of the audits arising from the Merali Affair will review AHS hiring and contracting practices. Both are rightly, and widely, seen within AHS as rules-driven exercises in bureaucratic butt covering, and that they do well. That’s why two questions remain unanswered:
Who hired Mr. Merali?
These are simple questions. If there was any real accountability at AHS, both would have been answered a week ago and we wouldn’t need any audits.
Substituting compliance for competence
Replacing competence with compliance is at the heart of AHS’s ongoing issues and a big reason why government struggles with delivering efficient and effective services. As detailed in The Decline of Health Services in Alberta, you can have a political culture of compliance, or a performance culture of competence, but you can’t have both.
AHS’s decision to close the extended care facility in Carmangay is a good example of why. The facility is closing not because it isn’t efficient; it is. Not because it doesn’t deliver quality care; it does. It’s closing because, according to AHS, it isn’t compliant with standards.
Contrast this with the transformation of Continental from the worst performing airline in North America to the best in three years, Gordon Bethune ordered corporate policies and procedures burned (marshmallows were roasted). Labour, ethical and customer issues disappeared. Corporate performance skyrocketed.
The bottom line: real leadership doesn’t hide behind the auditors.
Troy Media Columnist Robert Gerst is a Partner in Charge of Operational Excellence and Research & Statistical Methods at Converge Consulting Group Inc. He is author of The Performance Improvement Toolkit: The Guide to Knowledge-Based Improvement and The Decline of Health Services in Alberta.
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