Organizational culture is a strange creature we have all heard about, talked about, and maybe even tried to describe. In the 2016 North American Pulse of Internal Audit Report, 59% of respondents either agreed or strongly agreed that internal audit is capable of "Identifying and assessing measures of organizational culture." However, I don't think I've ever seen a government audit on culture. If you have, send me a copy! At the same time, I have seen culture included in many audit reports as a cause of performance issues.
As auditors we often talk about "tone at the top," and we refer to manuals as the guiding principles of operations, but rarely have I seen government auditors delve into organizational culture. I believe part of the issue stems from the political ramifications — real or imagined — as well as the disconnect for many government staff from the mission of the organization.
In his presentation at the 2016 General Audit Management (GAM) Conference, Richard F. Chambers, CIA, QIAL, CGAP, CCSA, CRMA, President and CEO of The IIA, stated that culture is "how we do things around here," or, if you are in government, "That's the way we've always done it." Often within government agencies there are the political appointees, their staff, and the "lifers," or career civil servants. There are two separate cultures within a single agency. In my experience, while there is one agency mission, goal, strategic objectives, and set of policies, each of these groups interpret them differently.
At GAM, Chambers pointed out the myriad benefits of a healthy culture, such as encouraging a long-term focus, promoting healthy risk-taking, mitigating myopic behavior, incubating new and challenging ideas, and affording quick resolution of differences.
On the other hand, toxic cultures lead to loss of confidence in leadership, groupthink and judgment errors, unethical or illegal behavior, different standards for different people, poor communication, blame, and defensiveness. They also breed silos, empire building, "us vs. them" mentality, and, for government agencies especially, a lack of confidence and public support. The public and legislative backlash from a toxic culture can be significant.
Despite the negative fallout of toxic culture, only 42% of CAEs polled for the 2016 North American Pulse of Internal Audit Report say they audit culture. My guess is that within government agencies that percentage may be lower. But as agency funding decreases and calls for transparency and accountability increase, I imagine organizational culture audits will increase. I also think that the aging civil service workforce and introduction of millennials to civil service will change the inherent dynamic of government culture as a whole. What are your thoughts?
About the Author
Mara Ash, CIA, CGAP, CGFM, CRMA, is a federal compliance specialist whose career has spanned federal, state, and local governments as well as private industry. Her goal is to help organizations improve service delivery, ensure compliance, and enhance transparency. She is an active member of The IIA and the Association of Government Accountants, where she has held various leadership positions.