Mind of Jacka: Empty Seats, Training, and Root Cause

And, surprise, surprise! Next year, the same task, or some other task, was not being performed. And we would dutifully report that the department had a breakdown in controls because that task was not being completed — full stop. Nothing else. And the department's corrective action would be… you get the picture. Think Einstein and his definition of insanity.

(And don't tell me this isn't still happening out in the real internal audit world. I've had conversations.)

We eventually caught on and began working to identify better root causes. As we did so, we found that two root causes were leading the pack. They were:

• Resources: Not enough people to accomplish all tasks required of the department.
• Inadequate Training: "We didn't know."

Considering the upheavals of our current business environment — the Great Resignation, low unemployment rates, and accelerated turnover — I would not be surprised if many of your audits are finding that important work is not getting done. If you have appropriately moved beyond "Honest, they will do it next time," you are probably also identifying these two root causes: resources and training.

Resources (or "How am I supposed to get the work done when I don't have anyone to do the work?")

In some instances, the issue of resources may be a budgeting problem. The department isn't being provided the authority to hire enough people. In those cases, internal audit can provide great value by supporting the department in its need for additional people, assuming such need is legitimate.

But because of the current environment, the resource issue has grown beyond budgets. Now the issue is that people are leaving, and there are no bodies to fill the empty seats.

It is nice to blame the economy and the Great Resignation for an inability to hire and retain employees. And there is no doubt it has had an impact on everyone. However, if your audit has identified a lack of resources as an issue, there are deeper questions you should be asking. These include such things as: What are the working conditions, how are employees treated, what is the tone at the top, and how do salaries match the quickly escalating available pay outside the organization? (Yes, while money may only be a demotivator, it has become an important part of the current discussion.)

These questions should lead to interesting and challenging discussions. Internal auditors cannot shy away from them because they are challenging. They are the tough discussions that lead to valuable answers about why people are leaving and why there are insufficient resources.

Training (or "I haven't got time to train you; just do the work.")

In this new and unusual world of business, not only are there a lot of new people out there, but they seem to be floundering in their new positions. They are being thrown in with little training and being asked to perform at the highest levels without the tools necessary to do so. Mixed-up orders, confusing conversations, customers knowing more than the employee, etc. It seems employees not only do not understand how they should do their jobs, they do not even understand why the job needs to be done.

Processes fall apart, steps are missed, and controls evaporate in the vacuum.

The training issue is the more important of the two because it has its roots in problems that existed before the pandemic. Of course, everything was wonderful back then, and we could ignore a lot of the fundamental flaws in the way we got work done. Unfortunately, that truth has come home to roost.

So, even if your audit does not find specific process breakdowns, it is still important to dig into the training questions. Is there a problem in the training of new and existing employees? Are people unprepared for the positions they will hold? Are they being set up to fail? Is there a comprehensive training program — one that provides not only an introduction to the organization but the details of how to actually do the job? And how much follow up is there to ensure that training has been effective?

Of course, while we're at it, let's turn this back on ourselves. One audit team I recently worked with was doing an excellent job of ensuring that their auditors received training. Leadership allotted at least 10% of available time to training, they ensured it was actually used, and they worked with the auditors to ensure the training met the areas of need.

On the other hand, I also recently talked with someone who said that not only were they not using the allotted time that had always existed for training, but the function was no longer bothering to allot that time. Weep for those in our profession who are not allowed the opportunity to learn, grow, and become more effective.

Root cause is a multi-faceted and tricky area. But it is the only way we can develop corrective actions to effectively correct identified issues. You may find that the cause of a breakdown is that there are not enough people, that there is not enough training, that management doesn't understand the risks, or executive management just doesn't care. And, by doing so you may identify an issue that goes beyond the area under review. You may find an issue that is endemic within the organization. You may be solving problems that go well beyond the area under review.

How is the culture within the organization? How good is training? And are there issues that permeate every aspect of the organization's operations? When you identify a global issue during one audit, that is when you are providing value in every single audit.