Audit Release, Oregon Department of Revenue: Enhancing Organizational Culture and Addressing Customer Service Challenges Will Optimize Agency Performance


Report Highlights

Organizational culture is key to shaping how members interact with each other and how they achieve their mission and objectives. However, organizational culture in an organization, such as the Department of Revenue (DOR), can be difficult to assess or change. Both DOR staff and management have identified a desire to shift towards a more collaborative agency culture and share perspectives on how culture can be enhanced to meet employees’ needs. DOR leadership makes decisions regarding agency operations; this report provides information that can help inform some of those decisions. DOR leadership has been engaged with the audit and acknowledged that enhancing the culture is a good opportunity within the agency.

Background

DOR has undergone tremendous change in the last five years. This include several changes in leadership positions, including the Director, and implementation of a critical and expansive information technology system. These significant governance and operational changes affected both internal and external stakeholders. For example, DOR’s customer service rating decreased dramatically, drawing the attention of the Legislature in 2017. We utilized a specialized methodology to assess how enhancing culture could help optimize the agency’s performance. The DOR Director has been supportive of our methodology and appears committed to enhancing the agency’s culture.

Purpose

The purpose of this audit was to determine how changes to DOR’s culture could improve agency performance and to identify factors for the decline in customer service satisfaction from 2013 through 2016 that can be addressed to enhance customer service moving forward.

Key Findings

  1. Opportunities exist to enhance DOR’s operating culture and employee morale. Specifically, DOR management should develop a formal strategy and take action to better incorporate collaborative values within the agency. The strategy should include robust internal communications, an effective accountability framework, a collaborative feedback process, and improved workplace interactions.
  2. The agency’s customer satisfaction declined between 2013 and 2016. A portion of this decrease was due to implementation of a critical and complex IT system known as GenTax. DOR has already identified and addressed a number of customer service deficiencies; as a result, customer service ratings increased in 2017 and 2018. DOR should complete efforts underway to address these challenges.

Recommendations

We made five recommendations to DOR for actions needed to improve its organizational culture and customer satisfaction. DOR agreed with all of our recommendations. The agency’s response can be found at the end of the report.

Read the full report here.

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Internal Auditor Repost: How to audit culture

Enron, Worldcom, FIFA, General Motors, Volkswagen, and Wells Fargo are just a few examples of scandals caused by organizational cultures that encouraged inappropriate behavior. The reputation risk cries out for audit coverage, yet only 42 percent of internal audit functions are auditing their organization’s culture, according to The IIA’s 2016 North American Pulse of Internal Audit study.

Auditing an organization’s culture can be challenging because of its complexity, its subjectivity, and the potential resistance of key players. However, approaches and techniques pioneered by some internal audit functions can help auditors successfully enhance coverage of culture.

James Roth, president of Audit Trends LLC, explores the difficulties and potential rewards of auditing organizational culture. He also highlights some of the possible methods and techniques that can be used to measure a topic that is notoriously hard to pin down, and even harder to influence with audit recommendations. Read more here.

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Internal Auditor RePost: Toxic leaders, toxic culture

O’Connor often flashes back to his time as a loss-prevention officer at Tiffany & Co.’s in New York City, a busy store containing immensely valuable items. Each day, tourists would come into the store to marvel at the magnificent jewelry. “It was an amazing experience to stand and monitor the crowd: hundreds of people, all basically following the pattern of a shopper — except for the three or four people who are not, the toxic outliers,” he recalls. “It’s the same for managers in an organization. There are going to be those outliers. With our unique experience, internal auditors can help keep the honest people honest as well as identify the truly toxic leaders before they cause too much damage.”

Read more here if you are an IIA subscriber (it is behind a paywall, unfortunately) about how internal auditors can create positive change in the face of toxic forms of leadership, and how that change can cause a ripple effect that improves not only leadership, but the culture of an organization.

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