Chief Performance Officer

Reuters reported today that  "President-elect Barack Obama, who faces trillion-dollar government deficits stretching into coming years, named on Wednesday a former Treasury official as the first U.S. "chief performance officer" to oversee budget and spending reform. "Nancy Killefer, a director at McKinsey & Company and a former assistant Treasury secretary in the Clinton administration, will work with economic officials to increase efficiencies and eliminate waste in government spending."

 

"'We can no longer afford to sustain the old ways when we know there are new and more efficient ways of getting the job done," Obama told a news conference just hours after new official projections put the fiscal 2009 U.S. budget deficit at a record $1.186 trillion."

 

This is fantastic, and reminds me that when I was hired at Maxtor (since acquired by Seagate), I negotiated a position where I was responsible for Internal Audit, Sarbanes-Oxley, and process improvement.  The title was VP, Internal Controls and Process Assurance, and I reported to the Audit Committee (for IA), the CEO and COO (for process improvement), and the CFO (administratively).

 

I believe that these are great opportunities for internal auditors.  We can assess and provide recommendations to improve process and resource efficiencies, permitted by our charter as management continues to have responsibility for deciding what to implement.

 

This form of integrating auditing has great value for stakeholders and is fun!

Posted on Jan 7, 2009 by Norman Marks

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  1. I agree that increasing efficiency and eliminating waste in any organization should be a top priority but do we really need to add a another layer of bureaucracy to accomplish this? In Mr. Obama's own words "we know there are new and more efficient ways of getting the job done," - why not just do it then? - until the exisitng managers are held accountable for their actions is anything really ever going to change? - when in doubt, hire a consultant or announce a new initiative -

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    I’m not sure I see this as adding another layer.  (As an aside - one of my favorite sayings is “Bureaucracy is the wrong solution to any problem.”) As Norman indicates, this should already be part of our charter (and is already part of the definition of Internal Audit.)  One of my greatest fears for the profession is that, with the allure of Sarbanes-Oxley, our pendulum has swung too far toward becoming experts in financial controls. I am not going to say that previously we had not gone overboard in our addiction to being called “consultants”, but there is a middle ground, and it is time to find it.  A good audit shop has the holistic understanding of the company than can lead to the most successful process improvement identification.  I think it is fundamental to the future success of Internal Audit as a profession to grasp any opportunity to be more than the tic and tie financial group. Being a part (or, if necessary, the driver) for process improvement and resource efficiency represents an important opportunity.
  1. The call for efficiencies from the entity that levies regulatory compliance on public corporations is indeed a challenge to management and auditors. Some would say it is an oxymoron. Auditors must consider recommending reasonable efforts in processes that adhere to regulatory compliance if you want to gain efficiencies in operations. This also gives them the opportunity to see the "white space" between business towers or silos of operations that could be made more efficient by well placed recommendations. Moreover, when organizations start to cut back their labor force, processes need to also be revisited to determine which ones stand as is, and which need to be amended to accommodate reduced volumes, assets, and resources.

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