Risky Business – the GAO’s High Risk Series

We have long since been fascinated with the United States’ Government Accountability Office’s High Risk Series.  

Recently the GAO provided their biennial update and it makes for interesting reading.

We are, however, not going to focus on what are the high risks but the thinking behind why such a process is undertaken.

In doing so we are hoping that a similar process is adopted by organisations.  

A high risk list is not that which is necessarily going to be audited next week or next quarter – although some may be.

Rather it is a discussion starter so that the focus of the attention of the list either seeks to address the identified issues or rebut, with evidence, the suggestions made.

There is a reason why the GAO is one of the great auditing offices – the quality of the framework that is adopted in the development of the High Risk Series is one such reason.

The GAO puts the need for the Series in financial context:

The (US) federal government is one of the world’s largest and most complex entities: about $3.5 trillion in outlays in fiscal year 2014 funded a broad array of programs and operations.

The focus of the Series is:

GAO maintains a high-risk program to focus attention on government operations that it identifies as high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement or the need for transformation to address economy, efficiency, or effectiveness challenges.

The challenge of such a program is that – like some national sporting teams – it is easier to get on to the list than it is to get off it.  The GAO has set up the criteria for the list’s off ramp:

Since 1990, more than one-third of the areas previously designated as high risk have been removed from the list because sufficient progress was made in addressing the problems identified. The five criteria for removal are (1) leadership commitment, (2) agency capacity, (3) an action plan, (4) monitoring efforts, and (5) demonstrated progress.

This is an example of an auditor – within the boundaries of independence – being proactive rather than reactive.  The GAO notes:

This biennial update describes the status of high-risk areas listed in 2013 and identifies new high-risk areas needing attention by Congress and the executive branch.

Solutions to high-risk problems offer the potential to save billions of dollars, improve service to the public, and strengthen government performance and accountability.

The only change that we would make is a chronology of high risk problems over time – it would be a fascinating window into the organisational (and political) challenges of the day and how they were addressed.

We particularly like the use of video and podcast as mediums to distribute the messages contained within.

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