Several years ago, I became involved in a finance audit with a public sector client. These things are about as much fun as a boot in the butt with a frozen mukluk in any organization, but public sector organizations are even worse because of their inherent risk aversion.
It turns out the finance clerks were spending a ridiculous amount of time processing expense accounts for the considerable number of employees that were constantly travelling for business purposes.
Without doing the necessary internal investigating first, I got the bright idea to check with the relevant tax authorities as to whether we could simply offer people a per diem and dispense with all the $10 lunch receipts that were clogging up the system.
The federal tax agency did indeed have a provision for this that I thought would solve a considerable problem, and make everyone’s lives easier.
I was incredibly wrong. I hadn’t been this wrong since I predicted Whitney Houston’s big comeback.
After lobbying hard inside the Finance group for such a change to be implemented, I was told in no uncertain terms, that we couldn’t do this because the people who didn’t spend the entire amount would pocket the difference, and that would be unacceptable. Never mind that the amount was only about $50/day for a person on the road to pay for breakfast, lunch, and dinner.
Further, this policy could not be adopted because two senior managers had been caught abusing their expense accounts while travelling for business.
The VP of Finance initiated a root cause analysis of this problem, and concluded they did not have adequate control measures, and poor policy on expenses accounts.
He got it wrong. He was treating a symptom of a much greater problem. The root cause of his problem was a corporate culture with zero accountability. Had a similar expense account abuse taken place in the private sector, the offending employees would have been terminated with cause, and common sense on a per diem expense policy would have prevailed.
Instead the VP of Finance chose to treat a symptom of a far larger problem by adding more bureaucracy. He also chose to disregard the thousands of hours of labor required to process lunch receipts. It’s a good thing he didn’t have the burden of worrying about shareholder value.
So instead of addressing the root cause, the Finance Department spent months rewriting the expense account policies, and ultimately came up with a completely ridiculous 75 page document that all employees with expense accounts were expected to adhere to.
Another genius example of your tax dollars hard at work.