As children, we are told that honesty is the best policy. We are also told that
- Being honest is an admirable trait
- It reduces stress and increases our self esteem
- Honesty builds trust
- Trust is the basis for all healthy relationships
But the truth about truth, is that it is one of the hardest things to hold on to. Society often ostracizes those who seek and speak the truth. This has been a prevalent problem in the modern workforce for many years. The structure of corporations should be set up to combat dishonesty. Unfortunately, the system does not always work the way that it is supposed to.
Every organization should have a board of directors. This is a group of people who jointly oversee organizational activities. The goal is to look out for the best interest of the organization’s stakeholders. It is, admittedly, a very difficult job. Board members must depend on a variety of people within its support system to help it carry out its duties.
And while we would like to believe that every person in every organization is a model citizen, that simply is not the case. In a perfect world, when an employee sees wrongdoing he should be able to report it without fear of repercussion.
Is honesty the Best Policy?
Why do we continue to see news stories in which honest individuals I punished for doing the right thing?
Allow me to introduce you to Zach Manning. Zach worked in the purchasing department at the Dallas Independent School District (DISD). He noticed irregularities surrounding how the organization handled construction projects. He alleged that they were violating internal policy and possibly state law. He was terminated for performance issues shortly after voicing his concerns.
Fortunately, a Savvy auditor, Andrea Whelan, picked up where he left off. She performed a thorough investigation that confirmed Zacks allegations. She drafted a 30-page report and submitted it to her supervisors. After receiving the report, her supervisors suggested that she needed training. She resigned her position. Prior to being employed at DISD, Andrea spent 25 years as an investigator for the IRS. So it seems as though she would know a little bit about investigating allegations.
The Truth Always Comes Out…But At What Cost?
If you’re keeping count, two employees have left the organization under unusual circumstances. Thankfully, the local news station heard about the situation and continued the investigation. That draft report became public. The board hired an outside investigator who confirmed what Zach and Andrea disclosed.
Board member, Joyce Foreman, is quoted as saying, “Their complaints had merit. I think we should be more serious about what our employees are bringing forward in terms of any allegation of fraud and waste.”
Way to go Joyce. This is what you want to hear Board members say.
Thankfully, in this instance this board was in pursuit of the truth. According to the local news station, Andrea was negotiating to get her job back. Unfortunately, that same courtesy was not extended to Zach. He moved to another city and began working for another school district.
Boards Have a Broad Support System
Auditors are paid to be in pursuit of the truth. We are an excellent resource when used appropriately. When faced with challenging situations, it is important for boards to remember that Auditors have nothing to gain from being dishonest. Let me put that statement in context. Obviously the Arthur Andersen auditors had something to gain during the Eron incident years ago. I’m referring to situations in which auditors disclose items in audit reports. There is no benefit to reporting a control weakness when/if there is none.
Additionally, statistics show that odds are against the employee who comes forward with any allegation. As a result, it is highly unlikely that anyone would willingly put themselves in that position for some sort of personal gain.
Ultimately, the board’s support system needs to be, well…supported in order to operate effectively. Otherwise, you create an environment of chaos and fear. Individuals become afraid of speaking the truth. No one wins in the end.
Honesty over everything
Auditors must realize that your job is to be honest at all times. Honesty comes with a price. That price can be more detrimental for the non-audit whistleblower, as is the case with Zach. Therefore, while you’re out on the audit trail supporting your stakeholders, remember that there are real people behind the processes you’re auditing.
My name is Robert Berry. I help improve people, processes and profits. I specialize in communicating through questions.
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