Murphy’s Laws Driven out of the Ministry of Finance SR by a Process Audit

Questionnaires at the last minute
The fifteen processes at the highest level can be broken down into 220 processes. “We then drew up every one of them and had them validated with the process guarantors” specifies P. Boroš. Discussions were held with ministry employees about all the processes and information on input and output was added.
Finding out the real use of the working time of individual employees was the task of the intranet questionnaires filled in by all employees. Even though they had two weeks to fill them in, two days before the deadline, most of them were not ready. Since the next part of the project depended on them, this was one of the most critical moments for the consultants. Under pressure from the management of the ministry, the respondents eventually filled in the questionnaire on time.
Based on the information from employees on their activities, the problem-solving team calculated the average time spent carrying out activities. A slightly extreme example is preparing a payment order, which took on average five hours according to employee data. Material on the new process organisation talks about shortening this time to thirty minutes.
In the final project phases, the team changed ineffective employee numbers. First of all, the existing structure was optimised. Sections, specialisations and departments were not changed, but employee numbers were optimised.
The project team came up with nineteen suggestions for organisational changes, and after the project solvers communicated with the leadership of the ministry, a new organisational structure was created; financial bureaucrats have been fully operational with this structure and its new number of jobs since January 1st this year.
The Murphy of state administration
The first “as – is” model which LogicaCMG prepared talks about the current state of processes. It describes cases where the situation found in the processes was critical, as well as those which were almost comical. “The audit confirmed Murphy’s Law; for example, two bureaucrats employee a third one,” J. Červenáková explains lightheartedly.
“Many activities were found to repeat themselves, output which was destined for no-one and cyclic groups,” she describes the state in which the ministry was in half a year ago.
So-called desert rivers were no exception: a vicious circle, where bureaucrat A works for bureaucrat B, who works for bureaucrat C who is managed by person A. “At various times, various employees from subordinate organisations submitted identical data,” the head of the service office recounts more problems.
Duplicity was another discovery which could have been prevented by better computer support. “There is no central information database. Everything works through hard copies,” J. Červenáková reminds us. The ministry does not only have problems with software, but also with computers.
According to the head of the service office, computers were not allocated according to who looked after what agenda, but according to what type of boss he was: “People who worked with large files, had in general worse computers than certain people in management,” illustrates J. Červenáková.
Too many people
“Of course, we also discovered that in certain areas, too many people were employed,” continues J. Červenáková. The planned number of 849 people, however, was not met, because the head of the institution foresaw the over-employment at the ministry during the audit itself. “When I saw where it was heading, we stopped carrying out recruitment procedures in September,” she justifies.
The official result of the audit confirmed the intuitions of the head of the institution: by January 1st 2004, almost one third – 44 – of organisational sections had been abolished. Along with them, the number of jobs fell by thirty percent. “In reality, 153 employees left the ministry, 23 of them found jobs in service offices; the rest lost their jobs completely,” specifies J. Červenáková.
Reorganisation affected every section. Some changes were unavoidable because the agenda of sections had fallen without this being reflected on the number of employees. For example, the section for international tax relations was abolished in this way. “The section dealt with limiting double taxation. Contracts were concluded, and with entry into the European Union, the extent of the agenda is significantly reduced,” explains J. Červenáková. The section dealing with the financing of regional offices, which no longer exits, ended in a similar way, for example.
What has grown
Because the tasks of the Ministry of Finance are not just changing in terms of the agenda becoming smaller, several new jobs have also been created. Three new sections were created, all concerning the Euro-agenda. “At present, the existing sections have also changed and added to their agenda,” explains J. Červenáková. Where the agenda was not met sufficiently, which is the case for example for budget analyses or drawing structural funds, the ministry will be holding a new recruitment drive in the following weeks.
One of the consequences of the whole resctructuring is also an increase in the attractiveness of working for the ministry. The money saved on the salaries of those who were made redundant is used to increase the salaries of the rest of the employees. The average salary of a bureaucrat at the ministry has risen to 28 thousand crowns.
The most frequently mentioned cause for the failure of a project on process changes in the commercial sphere is usually resistance to change. However, in the end the external consultants praised the cooperation with people at the ministry. Their resistance to change was no bigger in their opinion than that which they are used to facing in companies. The leadership of the ministry, according to them, counts among those who made the importance of the audit clear to their subordinates.
Continuity
Redundancy and reorganisation were not the only results of the audit. For example, it was also discovered that the management of documents was inefficient. An information system for processing documents should be introduced in the first half of 2004, according to the head of the institution.
The introduction of a quality management system should ensure continuity, according to J. Červenáková. The ministry wants to apply for a certificate with one of the foreign certification bodies. “We would like to obtain it in 2005 at the latest,” plans the head of the institution. The standard would not only certify officially the quality of processes at the ministry, but also insure the institution against negative changes in the event of future changes to the management. “The system of quality management means regular control of the quality of processes. If the ministry did not pass, the certificate would be taken away” explains to J. Červenáková.
What about the rest?
The idea of the Ministry of Finance’s management was for radical changes there to be an inspiration to further institutions of state administration. The step which the ministry engaged in allows them to demand optimisation and rationalisation of operations in other budgetary units, too. So the presentation of the audit to other ministers two weeks ago was a logical conclusion to the project. TREND addressed all the Slovak ministries with the question of whether they were planning a similar audit; it received a positive response from the departments of transport and justice, while for the Ministry of Justice, it has been in their plans for a while already.
Photo – Milan Illík, Miro Nôta