[inaudible] for helping with all of the organization. Not to mention [inaudible] at the back whos also been a great help. Thank you to all of you, and its been a wonderful and stimulating evening. Thank you. [applause] [inaudible conversations] every weekend booktv offers programming focused on nonfiction authors and books. Keep watching for more here on cspan2, and watch any of our past programs online at booktv. Org. Coming up next on booktv, Richard Chambers talks about his 40year career as an auditor for both business and the government, including his work with the Tennessee Valley authority, the u. S. Postal service and the u. S. Army. This is about an hour. [applause] thank you, leon, and its great to be with you all. This was my home chapter for a number of years, and im delighted to be back and to be a part of your program. This is the first audit conference that weve done with washington chapter for government auditors in a number of years. So were excited to be back and excited to be a part of the program today. This morning im going to share with you some reflections on a career in internal audit. Next year will mark 40 years for me in this profession, and the vast majority of my career was spent in government. And i was asked for, asked about two years ago by some of my colleagues with the iresearch foundation if i might be interested in sharing some of my experiences in a way that would help internal auditors across the spectrum of their career from entry level to heads of internal audits and government, in the government sector, even inspectors general. Help them with some of the challenges that they might encounter by sharing some of my own experiences, some sort of lifebased stories, if you will, from this, from this profession of audit and government auditing and internal auditing. So this morning i would just say my purpose is to give you a quick overview of the stops that i made along the way and then to share with you several key lessons that identify learned that i think that ive learned that i think you might find applicable in your own careers at some point. As some of you know, i started my career in the private sector, worked very briefly with the a commercial bank before joining the gao. I was over at the gao headquarters yesterday to meet with the comptroller general, and walking in there was very nostalgic because it was almost 38 years ago when i first walked the halls of gao as a young trainee there in the offices on g street. I didnt want spend very long with gao, then i moved over to the army and served in the armys civilian internal audit program, the internal review program, where i spent really a sizable chunk of my career. And i moved back down from washington where id come to start my career, moved back to atlanta, and i spent the next 17 years moving up the ranks in the internal review organization at Headquarters Forces command which was based in atlanta at that time. Over the course of those years, i had an opportunity to serve at every level from what we called at that time auditor intern which was a trainee right up to the chief of internal review at forcecom which was a fourstar command, and ill share a couple of my experiences from over these years over the course of our time together this morning. After 17 years there in atlanta, i decided that i wanted to try my hand at work here in washington again. So i moved my family back here, and i joined the pentagon where i was the director of internal review for the army. Had at that time almost 1400 auditors based in 300 locations around the world that i helped to provide some oversight for. Those were very exciting years, very challenging years because they were immediately after the downsizing following the fall of the berlin wall and the socalled peace dividend that was being sought from the department of defense. So a lot of pressures from a budget standpoint. After four years at the pentagon, then i moved over to right up the street here to the u. S. Postal Services Inspector general offices. They were in the process of setting that office up. Postal ig had not had an office historically. Congress mandated a new Inspector General organization there in the mid 1990s, so i moved up there to help the ig who was putting that organization together and spent the next three years as part of the postal Ig Organization, becoming the first deputy ig for the Postal Service. Then i moved down, as ill talk about later, moved down to knoxville where i served as the Inspector General of the Tennessee Valley authority. And following a turn of events regarding the ig act and the reclassification of that position to a president ial appointee, i took an early retirement and went to the iia and have been with the institute of internal auditors twice over the last 14 years and in the middle i spent about five years as the National Practice leader for pricewaterhousecoopers over their internal audit advisory services. So over the course of my years, ive had an opportunity to work in internal audit and ig work, within government, ive had a chance to work in the notforprofit sector, and ive also had a chance to work in the corporate sector via one of the big four accounting firms. So overall its been an exciting career, and i think i picked up more than a few anecdotes along the way that some of you will find relevant here this morning. So with that, let me share with you some of the things that ive learned that i think regardless of where you are in your career, you east have encount you either have encountered or youre likely to encounter the lessons that auditors in government invariably have to address. The first one is really that stakeholders judge our value. Internal auditors and government auditors definitely have stakeholderrings. It took me a while to figure that out as a young auditor. I assumed that we were there because there was an Army Regulation that said that we should be there. Audit activities were supposed to be organized in every command around the world, this internal review program that had been in place since the end of world war ii. I didnt have any question that we had place to be because the regulations mandated it. It really wasnt until i became the director of internal review for the army right after the fall of the wall and the end of the cold war, and there was a lot of pressure on downsizing within the military. There was an expectation that we were going to save some money for the taxpayers. And what i discovered immediately upon assuming the the role of the director of internal review at the pentagon was that our resources out will around the world were being dramatically downsized, more dramatically than the armys budget. In some places we were seeing our internal Audit Departments cut by 75 or more. Certainly, the budgets in the military were being reduced, but not by that much. So i spent about six weeks right after i got here to washington and joined the staff down at the pentagon. I spent about six weeks traveling around the world and talking to military commanders, to other military officers and to others within Army Activities around the world about what was it that internal review was not delivering that really caused them to make these very difficult decisions to reduce the staffing . And i heard a lot, and i learned a lot, and it was probably most, the most rewarding experience from a learning standpoint that i had encountered up to that point in my career. What i heard was stakeholders, those who relied on internal audits work making very difficult assessments of the value that they were getting. I would hear Army Commanders say, you know, i know how important it is to have an internal audit function, i understand the value that they can provide me, but in this at this time i have to make very difficult decisions. I either have to spend money on i either have money that i have to spend on Family Housing for my soldiers or audit. And i dont think that its a choice for me. I felt like that was a false choice because i thought what they were really doing was, as one of the Army Generals later coined it, they were eating their seed corn. Because be you get rid of your audit if you get rid of your audit capability at a time when youve got to figure out how to reduce your resources, youve taken away the very people who are going to be there to help you do that. So i heard other stories as well. Id hear commanders say, you know, the audits take too long. I need somebody who can come in here and tell me what time it is, and by the time i get an audit report, theyre telling me how to fix the watch. I heard them talk about the auditors were not focused on the real issues and challenges. I heard them talk about the fact that they needed quick decisions or quick information or speedy information for decision can making. So decision making. So i came back with a really keen understanding that the decisions that were being made by those who were making the investment in audit was that they were having to make that assessment based on what they judged the value of the function to be. And it really helped us to formulate our own strategies over at the pentagon for how we were going to reengineer our internal review organization at the time. Today when we think about stakeholders in the corporate sector or even government, were off talking about audit committees who represent the board and their action with internal audit. Were talking about executive management. If im in the ig community, im certainly speaking about the executive management of my agency, but im also speaking about in the ig community, for example im also speaking about congress and the fact that i have these competing or not competing always, but these dual reporting relationships. Were speaking about operating management within our organizations and within our agencies. And were also speaking about citizens and taxpayers and others. So we have a vast portfolio of stakeholders with whom we have to interact and have to address. Some of the common stakeholder concerns that we hear and this is true where were speaking about government or were speaking about the corporate sector, is that the auditors dont understand the business, that we dont understand what it is that theyre trying to do. We heard that a lot in the early years over at the Postal Service because the Postal Service had been in place for almost 200 years before the Ig Organization was created. And postal officials were not all that excited about the idea of having an ig, and even the board wasnt all that thrilled with the ig idea. And so what we often heard as we started to conduct audits there was, you know, this is a little bit complex. Its too complex for your guys to understand. You dont have the expertise, you dont know or understand the business. And i think we hear that a lot today. And youre going to hear that much more frequently when youre trying to audit operations than you will hear it if youre auditing things like financial assessment, financial controls or compliance issues. Youre much more likely to hear complaints about not understanding the business if youre doing operational auditing. Theres also this enduring concern that somehow as internal auditors were not the most effective communicators. And theyre not talking strictly about the written product, although sometimes they feel like those are too voluminous and that theyre very difficult for management to make their way through them, but theyre talking about the regular and Interactive Communications that we should be having throughout our audit processes. Theyre looking for assurance, but theyre also looking for advice. Theyre looking for insights. Because in most organizations we have more expertise on controls and on Risk Management than they do, and theyre looking for us to tell them at the outset of an initiative or while an initiative is being undertaken, theyre looking for our insights on that. I had the opportunity during my years at the pentagon to serve on a reengineering project of the travel program for the department of defense, and i wasnt there as an auditor, i wasnt in the room to vote, but i was definitely there as senior officials were making decisions about cutting controls and streamlining processes. I was there to offer my perspectives about which ones, which controls were critical and what the risks would be if some of the key controls were eliminated in the interest or in the name of speeding up the process. And then finally, were also hearing even today the same thing that we heard 20 years ago at the pentagon, were hearing about value for money. Were making a big investment in audit, are we getting our moneys worth . What is the value that i get out of audit . And so these are enduring challenges whether youre in the corporate sector or whether youre in the public sector. The second of the lessons that i want to share with you is that about building and sustaining relationships. You know, unlike our external audit colleagues who tend to be a bit more nomadic, they will serve at an organization for a while and then they move on perhaps to a different client, they serve one client from an external audit standpoint, then they move to a different one. Unlike them, we have to live where we work, and thats true whether were auditing government or whether were in the corporate audit world. We need to be in the organization, and our mission is to be within the organization and to be organized within our organizations over the long term. And im going to tell you from my experiences over the course of my career, those who are more successful whether youre in an ig model or whether youre in an internal audit in government model or an internal model in the corporate sector, those who are more successful in building and sustaining relationships within the organization notice i didnt say cozy relationships, im talking about relationships, the ability to communicate and to have a degree of trust in interactions those who are able to do that are far more successful. Things are not well organized, petraeus are not working something has to be communicated at some point. Management doesnt want to hear and i would tell you that the ability to do that diplomatically and the nonthreatening way will often be to benefit more in the long run. The ability to help manage and understand what lies ahead or that lies around the corner. We would have to be able to demonstrate. There has to be a perception on the part of management and Agency Officials that we can be trusted to do the same under the same circumstances. Leadership and empathy these are all characteristics that i think we have to be able to demonstrate. I think relationships can also enhance relationship acumen can also enhance your value and can actually help you be more successful over the course of your career. When i look at the Postal Service early in 2000 and the act at that point was appointed by the agency and in our case to the board, so the board offered me the position and i went down and i assumed the role of the Inspector General. For a lot of reasons i wont get into there was a bill working its way through congress to amend the act and make the position of plaintiff. I understood the risks when i went down and i did things that we might have a little longer before the bill was enacted but sure enough i only been there for a few months and there was a writer attached on the legislation right about the end of 2000 plus while the election it was while the election was still hanging about and actually did make that a president ially appointed position and there was a provision that said that the incumbent could stay in that post until the president elected to make an appointment. I needed to have 25 years to take the early retirement and so i just thought that this is going to take a while, new president coming in whichever one it was able to take a while to work their way down the list to the position and sure enough it did that the next summer in 2001 i was traveling out of town and i got a call and it was the director of the president ial personnel calling on behalf of president bush and he said. Tell me just a little bit of the back story and once i knew. If i were to retire and do Something Else one of the things i did was to work very hard in those ensuing months to build some strong relationships on the hill because the service area spans seven states and the 28 house members who have jurisdiction over some part of the service area. We spend one or two days every month coming to washington from knoxville and walk the halls of capitol hill meeting the staffers and members of congress listening to their concerns and making sure that the plans address the concerns and being responsive that they had concerns i thought thats what i needed to do to be an effective ig so when that call came in the summer of 2001 and the voice on the other end told me the president decided to make his appointment to be determined by a assumption is that they had gone through a vetting process and they were going to be naming someone who had been nominated or put forward by congress so i was very surprised when he said i asked him who is the nominee going to be and he said the president has decided he would like to nominate you for the position. Im a career Civil Servant and i never indicated an interest in the post. He said weve been talking on the hill and almost everyone weve spoken with all of the key senators who have jurisdiction over the area all want you to stay because they feel like you have a strong working relationship and so i guess i would simply say that was not my intent and it was the furthest thing from my mind to be able to build relationships so that i would somehow get the nomination but that is in fact the way things worked out so building and sustaining relationships will make us stronger in every post that we hold in the career. As i discussed in the book the buck ive done a lot of soulsearching and i finally did decide to decline the opportunity and take the early their early retirement but it certainly was another important lesson about why its important to build and sustain those relationships. I think its also important and this is something that the government weve got to really make a priority is to follow the risks. We really need to follow the risks wherever they