A Good Auditor has Courage

Many times I read audit reports and a crucial element of the audit finding is missing – the cause of the finding. Sometimes, auditors will identify a component of internal controls as a cause – typically, some policy or procedure is lacking.

This comes from the Government Auditing Standards which defines cause as one of the five elements of a good audit finding. Specifically, it says:

4.17 Cause: The cause identifies the reason or explanation for the condition or the factor or factors responsible for the difference between the situation that exists (condition) and the required or desired state (criteria), which may also serve as a basis for recommendations for corrective actions. Common factors include poorly designed policies, procedures, or criteria; inconsistent, incomplete, or incorrect implementation; or factors beyond the control of program management.

This standard focuses on lower level causes which are not controversial. If there are poorly designed policies or procedures, the next logical question is to ask why. Is it because management failed to  assess risk in this area? Is management incompetent?

Often, auditors will not focus on the higher level causes because it is controversial and may create conflict with the senior staff being audited.

Without getting to a higher level cause, it is not possible to make a real recommendation that will actually bring about change.

This week, I did read an audit report where the Inspector General of the Nuclear Regulatory Commission had the courage to take on the management style of the Chairman of the Commission. You can read the report at:
http://republicans.energycommerce.house.gov/Media/file/Hearings/Environment/061411/IGREPORT.PDF

The Inspector General paints a complex picture of Commissioners and senior NRC staff being misled by Chairman Gregory Jaczko, of critical information for Commission decision-making being withheld from Commissioners, and of matters required for full Commission action being blocked from resolution. He describes the Chairman’s bad behaviors in his interaction with staff members and other Commissioners. For example, the Chairman would use his power to approve foreign travel as a way to get other Commissioners to support him on issues.

Congratulations to Inspector General Hubert T. Bell and his team. They had the courage to address some real issues that negatively affect professional staff concerned with public safety of nuclear matters.