In the news today, is the scandalous leak that the MOD is paying £22 for a light bulb supplied by specialist contractors which can be bought on the open market for only 65 pence. The dismay for any observer of this story is ‘who in their right mind would accept paying such an extortionate fee for something so simple and cheap’? Surely, whoever set up the contract, authorised the payment, paid the invoice, audited the accounts, created the monthly financial reports should be disciplined for their derogation of financial duties?
It’s easy to point fingers and observe from the sides, but it does also create an opportunity to reflect on why a financial system and the people working in it allow for such absurdities to happen. The question I have for you is, are you sure it’s not also happening in your organisation and under your watch right now?
As a Finance Director, it was my responsibility to ensure that there were appropriate processes, sign off’s and controls in place. But it was also to foster a climate where every member of the organisation felt they had a stake in their business and a right to be heard.
I learned early on in my career as an Internal Auditor, that it was very easy for staff to fall into the attitude of ‘that’s normal for here’. They ignored their common sense and their responsibility to challenge the status quo. In my career I have come across some daft purchasing decisions including: paying insurance for courtesy cars when the fleet cars were in repair, but then hiring new cars instead of using courtesy car already paid for; paying for excessive overtime because the duty rosters had not been looked at in 10 years; buying over a year’s supply of packaging in order to get a better cost per unit, only for the product to be discontinued within 3 months.
It took one brave soldier to whistle blow to the media that he thought spending £22 on a light bulb was wrong. Have you got an environment in your organisation that anyone of your employees feels comfortable enough to raise issues when they find them?