Category Archives: efficiency

A Holistic Approach to Reducing Fraud, Waste, and Abuse


Overview

Under the current administration, there is a renewed emphasis on reducing fraud, waste, and abuse (FWA) within the Federal Government.  While this is nothing new, historical initiatives have focused primarily on external threats and only moderately succeeded at reducing operational waste and have made little to no impact in identifying the fraud and abuse prevalent in certain areas of Government.  Historical approaches are top heavy, punitive, and rely on self or third party reporting with only negative consequences for those involved.

Figure 1Decades of experience show that fraud, waste, and abuse can be attributed to three sources: the external threat; the internal threat; and internal/external collaboration.  First, the external threat has received a lot of attention.  In this case, new laws, policies and systems (Figure 2) have been enacted to proactively identify and reduce fraud perpetrated by outside actors.  The second type of threat is the collaborative threat.  In this case, the threat is an external force working with unethical or willingly naïve officials within the Government.  This type of offense is often the most highly publicized aspect of FWA.  The third type of FWA is the internal threat.  In this case, internal Government personnel manipulate resources and abuse the system for unintended purposes.

As mentioned above, a number of important laws and policies have been implemented since 2002 with growing success in reducing the external threat.

Figure 2As we move forward in reducing FWA one must understand that the methods used for external threats do not apply universally to collaborative and internal threats.  The introduction of an insider as part of the equation creates a very different risk profile for the agency.  There are political and cultural implications when exposing an insider threat that do not exist with purely external threats.

To understand FWA and its threat to the Government and Taxpayers, we must come to terms with a common definition.  This is not as simple as it may seem and even with a definition, it is hard to determine what falls where without more clarification.  For the case of this paper, we will use the definition currently being used by the Department of Veterans Affairs (Figure 3).

Figure 3
With a working definition of FWA and an understanding of the FWA Triple Threat (Figure 1), we can now begin to address the issue that appears to be hiding in plain sight, the Internal Threat.   The internal threat comes in many forms, some examples are:

  • Low-Price Technically Acceptable (LPTA) acquisitions for non-commodities.
  • The various forms of acquisition fraud
  • Duplicative programs and functions within or across agencies refusing to consolidate due to the “Uniqueness” of their program or mission on even the most basic of functions (i.e. badging, billing, human resources, acquisitions)
  • Promotions and bonuses in offices/agencies with declining performance and rising inefficiency
  • Artificial barriers to improvement (e.g., Union Agreements)

A New Approach

While current Government initiatives are focused on identifying fraud from external threats and the IG is investigating issues as they are identified, Management Science & Innovation (MSI) has devised a new approach to addressing fraud, waste, and abuse.  Rather than relying on intra-agency inspection and whistle-blowers to identify the effects of internal threats, we propose using a data driven and statistically sound analysis to reduce fraud, waste, and abuse within our organizations in the same way that we are beginning to defend ourselves from external threats.

The MSI approach requires organizations to proactively identify fraud, waste, and abuse and report it along with remediation strategies in a non-punitive manner.  Each organization is given six months to conduct an internal analysis on FWA using an approach that starts with operational outcomes as the handle for pulling threads that can lead to FWA issues.  This analysis is conducted by a third party, ideally from another agency or with contractor resources that are willing to accept OCI restrictions on future work, using proven risk detection, modeling, and analysis tools.

As part of the self-reporting phase, reporting organizations are immune from punitive action, unless egregious or clearly illegal behavior is detected, so long as they propose sound remediation strategies and where possible demonstrate action already taken. Reporting organizations are also given the opportunity to propose expected operational efficiency and effectiveness gains as well as a rewards and punishments system for staff.  From this foundation, the organization is tasked with two things: 1) executing remediation strategies and conducting any internal rewards/punishments and 2) implementing a system for detection and reporting of FWA that will integrate with the agency and Government programs for the elimination of FWA.  Organizations are also informed at the beginning of the process that should they report no findings in the initial six month study, there will be a complete FWA review of their program by the inspector general.

This new approach addresses the concern of FWA from a more positive perspective that emphasizes and prioritizes operational outcomes and works with organizations to understand the impact of removing FWA within their organization.  Additionally, it reemphasizes the importance of reducing the impact of waste by helping employees truly understand what waste is (Figure 4) and how it impacts Stakeholders.  In the case of the Department of Veterans Affairs we can redirect the conversation to the impact on the Veteran for example (Hypothetical):

  1. $100,000 in unnecessary overtime is equal to 10 Veterans receiving Dialysis Figure 4Treatments.
  2. $500,000 in improper billing is equal to housing as many as 50 homeless Veterans for a year.
  3. $1,000,000 in unnecessary acquisition costs is equal to as many as 10 additional Veterans receiving prosthetic limbs.

By refocusing the conversation on the stakeholders and applying a less punitive approach to detecting and preventing FWA, It gives motivated staff (the non-offenders) the opportunity to act in a positive manner and it gives the offenders an opportunity to change their ways and become part of the solution.  Ultimately, this new approach should transform the culture from one in which FWA is ignored and sometimes even tolerated to the point of being condoned to one where even the hint of FWA is adjudicated swiftly.

While there are a great number of organizations and leaders who will  stand up and praise there efforts to eliminate FWA.  These efforts are focused on the external threat unless an internal or collaborative threat has been exposed to them and the world by an outside source.  Unless a serious effort is taken to address the Internal threat and begin to undergo the serious transformational change effort that our government is crying out for,  we will never begin to scratch the surface on eliminating fraud, waste and abuse within our government.

 

For more information contact:

info@msipros.com

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Talent Identification for Peak Human Performance


Corporations, Military Organizations, and Sports Teams are constantly looking to find and attract “Peak Performers”.  As technology continues to advance, it is becoming clear that the human component is most often the limiting factor in any endeavor.  Utilizing proven Lean and Six Sigma approaches in concert with expertise in Anatomy & Physiology, Kinesiology, and Psychology; we understand how the human body is intended to move, how to train an individual to perform efficiently and effectively in their given environment, and that the level of motivation an individual needs to carry out their assigned task is critical to the success of any manually driven process.  However, the question remains, even if we can make people better at what they do, how can we find the best person for the job.

You can read more about Lean Six Sigma for Human Performance here: https://thecommonsensei.com/2011/10/07/human-performance-lean-six-sigma-a-process-based-approach-to-improving-human-performance/

Expanding on the concepts presented in the article above we will refer to peak performance in terms of the 3P’s for Human Performance (Physiological, Psychological, and Proprioceptive) and that maximizing efficiency in these three areas entails reaching peak performance.

3 P's of human Performance

Physiological Factors include one’s skill set, conditioning, training etc.

Psychological Factors include motivation, readiness, self-efficacy etc.

Proprioceptive Factors include spatial awareness, coordination, etc.

In order to identify a specific talent that is best suited for any given activity we must first define what excellence looks like and then identify individuals who share common traits that can be trained to achieve or exceed the stated goal.  Utilizing our Talent Identification Model (seen Below) we can build a customized tool to identify talent, track progress and make training corrections/decisions over the course of time.

Talent Identification Model

Stage 1: Baseline Key Process Indicators for Human Performance is all about building a baseline of core competencies that are required for an individual to develop the required future state capability.

Stage 2: Identify, Filter, and account for variables that may alter individual baseline scores. Individual variables will play different roles in Human Performance.  When accounted for, these variables can be determining factors for future capabilities assessments or guidelines for the development and duration of training required for an individual.

Scale

Step 3:  Match individual Human Performance Scores (HPS) with job classification.Best In Job

  • The use of current job/position classifications in combination with the HPS from current Best in Job performers provides a Job/Task specific HPS to align new individuals to a job/role
  • On the job training can be accounted for through regression analysis and will provide a tracking mechanism to ensure that candidates/employees are on track to reach Best in Job standards

 

Individual and Team TrackingStage 4: Individual and Team Tracking.

Tracking of individuals training and performance against their Best in Job performance goals allows for adjustments to each individual or teams training and/or career path.

Food for thought

This approach has been used informally for decades in the selection of individuals to play roles in teams and organizations.  I utilize formal and informal versions of this approach in coaching as well as business endeavors with great levels of success (see Trust the Process, Winning is the Result).  By instituting this approach, organizations can create their own longitudinal study to identify causal relationships which can boost their production.  If you know that people are the key to your organization’s success, shouldn’t you be maximizing their talent?

Until Next Time,

Happy LEANing,

David Allway

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