FEATURE ARTICLE

Internal Audits A Manager's Best Friend

Auditing your agency should go beyond the numbers to include staff, safety, customer service and procedures

BY MICHAEL CLARK, CLP

It is dangerous in today's business climate to assume that all operations are running smoothly because the surveys say so or the number of complaints coming into the office are down.

When you hear the word "audit," it's easy to recall an image of two accountants wearing thick eyeglasses, sitting in a conference room, pounding on calculators and thumbing through mounds and mounds of paper.

However, you do not need to be a or financial wizard in order to conduct audits on items pertinent to your agency. Audits aren't solely financial in nature. Finance is only one small aspect of internal audits that are important to a manager. Furthermore, a manager probably does not realize that he or she conducts internal audits everyday without that formal "audit" name or procedure.

This article will expand the realm of internal audits beyond accounting and identify other important areas where internal audits can be useful. In addition, the article shows how to implement internal audits for recreational facilities and related programs and services. Last, and most importantly, it will identify die benefits of a well planned and implemented internal audit.

Several audits can be conducted internally to guarantee a manager in real time that their staff, facilities and programs are operating effectively and efficiently. In addition to financial audits, others include personnel, safety, customer service, and procedural.

Personnel

Screening applicants and setting-up interviewing tactics is a form of an internal audit. In any service industry the most important aspect, in terms of survival, is personnel. Moreover, in most cases personnel is the highest level of overhead expenses and can make or break an agency.

Any form of an "in-basket" exercise is an internal audit prior to hiring applicants. Can the applicant for a facility cashier add, subtract and give back change? Can the lifeguard tread water for ten minutes and perform victim releases? For these examples, the tests or skill identification becomes important to the success of a managers trust of personnel.

Simple procedures such as reference and criminal background checks are also personnel internal audits.

Safety

Agencies with safety committees may already be masters at this type of internal audit. Unfortunately, the current legal climate has mandated internal audits involving safety related issues in cases of negligence and levels of liability. Too often, sacrifices or deletion of programs and services in recreational facilities are made solely on the legal ramifications and not on the issues at hand. Yet, internal audits involving safety issues are important to any manager and a well-planned safety portfolio is necessary for any agency.

Safety internal audits can come in the form of fire drills, "red cap" drills, checklists on equipment and facilities. It is also important to allow individuals from outside the immediate responsibility of a manager to cross check safety internal audits. For example, a safety committee can assign members to inspect the agency's parks, facilities and programs with employees who do not directly work in the areas being inspected (i.e., day care employees inspect parks while park employees inspect programs).

This should be an ongoing procedure and can be very successful. However, no manager can succeed by

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wearing blinders or relying on a successful safety track record. New perspectives are often appreciated and this type of internal audit system provides the community that uses the parks, facilities and programs with an assurance of a top-notch safety portfolio.

Customer satisfaction is a 1990s trend in any industry, and the field of parks and recreation is no different. If the agency does not meet or exceed the needs of the community, somebody else will.

Customer Service

Customer satisfaction is a 1990s trend in any industry, and the field of parks and recreation is no different. If the agency does not meet or exceed the needs of the community, somebody eke will. No park and recreation agency can afford to lapse in their customer service efforts. Thus, internal audits become a tremendous tool to guarantee high levels of customer satisfaction within a particular program or facility.

One effective way to audit customer service at a facility is to send "proxies" or "secret shoppers" through the system and observe how they are greeted, treated and whether procedures are followed accordingly.

McDonald's Corporation thrives on its customer service and performs an intense internal audit of every franchise store. The system it uses is called "The Blitz," which is basically an unannounced visit by an individual not known to the restaurant personnel, who acts like a normal customer. After the visit the "blitzer" grades the store personnel on all facets of the operation, including:
a prompt and friendly greeting; an efficient order taking process; suggestive selling techniques; food quality; and cleanliness levels in the entire restaurant, including the washrooms. This provides corporate officers with timely and factual information about operations in stores all over the nation.

Sending proxies into your facility or related programs can achieve the same goals. In addition, it can also be used as a public relations tool by using regular customers and illustrate to them by being involved in the process that their satisfaction is important to the agency.

Procedural

As previously mentioned the procedural internal audit assures the manager that the support staff is following all systems that have been implemented in order to create effective and efficient operations. The key with this audit is consistency towards positive treatment of customers. There is nothing more aggravating to a manager than hearing from a customer who says that their friend was able to enter the facility without a membership pass, yet they were stopped and not allowed in.

How does the manager reply to this particular customer? Why has a precedent been set? Where is the system failing and how can it be corrected? Is the staff member involved the problem, or is it the system developed by the manager?

One technique to attain consistency is to once again have a proxy visit the facility and grade the procedural end of their visit. This will provide a manager with the customers perception for how the procedures made them feel as a paying customer. This way the manager not only is provided with timely information on whether the staff followed procedures, but it also allows the manager with an opportunity to evaluate the procedures set in place by sensing how this effects customer satisfaction.

Checklists, daily reports and videotaping are also other types of internal audits that deal with procedures. For example, a current trend in aquatics is to videotape lifeguards while in the chair. The goal in this instance is to view if each guard is paying attention to the water and scanning the area of the pool they are responsible for within a designated amount of time.

However, how far should internal audits go? Legal council may already have the answer to this question, but even from a management perspective an agency must evaluate the consequences of not creating some form of checks and balances in all the areas discussed in this article.

Financial

The major premise within this area is to follow good accounting principles. Current technology is available to allow this premise to occur without occupying the majority of a managers time. In accounting for cash receipts, accounting principles are important to the integrity of any manager's operation.

Many traditional gimmicks at the point of purchase may seem trivial but do work when implemented properly. For example, placement of signs at registers staring that if a customer does not receive a receipt their next purchase is free. Simple markings placed on a roll of register tape prior to use can also be effective. In this instance, if the customer receives a receipt with a designated winning marking on it they will receive a $1 off on their next purchase. In both instances, the customer understands that they should receive a receipt. Plus the integrity of the financial audit system assures that all cash transactions are being accounted for accordingly.

Managers also need to maintain a daily log on shortages and make sure patterns among staff members are not occurring. Last, all voids should be completed by management staff. Allowing cashiers to complete their own voids opens up opportunities for transactions not to be tabulated correctly.

Reporting and posting deposits are also important parts of the financial audit arena. Always make sure that more than one individual counts the cash for each deposit. This creates a cross reference and again adds to the integrity of the systems initiated by the manager. Finally, always maintain neat, complete documentation.

Implementation

There are several factors to keep in mind during the implementation stage of internal audits.

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• All internal audits must be known by the staff affected by them. Manager's should not inform staff when proxies will arrive, but they should be upfront from the start when the audits take place.

• During the planning process, the audits must be developed to accomplish new levels of performance in whatever audit areas the manager has identified as being important to the operation. Without tying the audits to performance goals, the validity of the audits diminish and then open the door for personnel to perceive them as a threat.

• Never isolate audits to prove wrongdoing by any staff member. Again, this will only become more detrimental to the process and will jeopardize any developed levels of trust among staff and management. In addition, this approach will create negative attributes such as animosity and poor morale.

Tips

• All staff, including the manager, must realize that audits are designed to better serve customers. Internal audits will not relinquish the same results if they are implemented with a "rescuing" type of management style. Performance goals must be planned upfront and be attainable. In addition, the internal audit must make the connection in the minds of the staff that the process is a tool to accomplish identified performance goals.

• It is critical that the manager creates a culture within their operation that provides staff with the opportunity to have a say in the process. The manager must be approachable and willing to listen.

• There must be a legitimate "management- by-walking-around" approach. If staff only sees or hears from a manager during, then the threat and trust factors will once again come into play. In a rescuing effort by the manager, internal audits will really only occur when the staff sees the manager pull their car into the facility parking lot.

• Attach an incentive program to the internal audits. If performance goals are related to the audits, then reward staff accordingly. Keep in mind here that the same premise of isolating efforts is also not effective with rewards. All staff need to be awarded accordingly and collectively as a team.

• Follow through and inform staff of their grades in the audit. A lack of follow through will once again affect the integrity of the entire audit system. Audit evaluations need to be two-way communications.

Benefits

The benefits of any internal audit system are endless, and they can have positive influences in both the short and long run. Personnel issues of trust, morale and a sense of belonging can go a long way. In addition, individuals tend to strive when challenges are stated upfront. This creates teamwork and motivation. If this process does not create these attributes, then go back to the screening process and ponder why an individual was hired in the first place.

Managers also receive immediate feedback in cases utilizing proxies. This is real perceived information regarding the procedures and staff performance in several areas of the operation at hand. High safety marks and positive public relations in all these areas are also tremendous benefits. Again, the benefits are endless and site specifics will play a role in the planning and implementation phases. However—regardless of the facility, program or service—the general principles still apply.

Conclusion

Internal audits are an essential foundation of any operation and should be part of a manager's portfolio on a daily basis. It is dangerous in todays business climate to assume that all operations are running smoothly because the surveys say so or the number of complaints coming into the office are down. Identified performance goals tied together with informal internal audits are a manager's best friend. •

MICHAEL ClARK, CLP
is the manager of golf operations at the River Trails Park District. He is a MBA graduate and has nearly 10 years of facility management experience.

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