Confession Time: Are You Overdue for a Self-Assessment?
Many people find it difficult to look into a mirror and make an honest assessment of themselves. The process of determining our own weaknesses and how to address them can be terrifying.
It’s natural to worry: “Oh no, they’ll find out I’m not as good as they think I am,” or, “Once people notice my weakness, they may try to exploit it.”
These fears and anxieties aren’t exclusive to personal self-assessments; they’re very common in contractor self-assessments (CSAs). Contractors with government property are required to complete self-assessments, but many avoid performing them for reasons similar to reasons we avoid assessing ourselves.
We can let the requirement (FAR 52.245-1) itself encourage us to do these, but the assessment will be most beneficial if the self-assessment is viewed as a path to excellence. Let’s review some key components of a self-assessment that will ensure a successful outcome.
Implement a Code of Ethics
Self-assessments can dredge up ethical dilemmas. Although severe problems are fairly rare, it’s important to implement a Code of Ethics so that all participants go about the self-assessment the right way. Internal auditors that operate with integrity produce results that can be trusted as accurate.
This Code of Ethics helps all parties involved, from supervisors to internal auditors. When you are an internal auditor, a self-assessment requires your mind to be set to its most “objective” mode. Instead of thinking about “covering” for a co-worker or attempting to avoid disclosing an embarrassment, you should seek to aid everyone by uncovering the opportunities to optimize.
Everyone included in the self-assessment process should keep the findings confidential, trust that the project leaders know how best to disclose, and act on the information.
When we assess ourselves, weaknesses hide right in front of us. But it’s easy for weaknesses to live in a person’s blind spot. It’s then that we require an additional set of eyes to uncover them and an open mind to accept them.
Likewise, contractor self-assessments often require an objective perspective for reliable results. This means we need to rely on one of humankind’s greatest achievements: the scientific method.
Prior to kicking off the assessment, the team should document attributes of the site or contract that will be reviewed. Considerations like inventory dollar value, existence of a DCMA “adequate” property system, last revision date of written procedures, and FAR/DFARs clauses in play should be noted. This summarized situation will position the team to put together a score card which will be used by the auditors to record how the site/contract is performing in each segment.
Dr. Doug Goetz’s wonderful publication on self-assessments and property system analysis enumerates the ten steps that comprise the statistical approach. Pamela McFarland succinctly summarized the activity occurring along the way. Let’s look at each step with things that should be considered:
1. State Objectives of the Audit Test
What exactly are you testing/reviewing during the assessment? Be specific.
2. Define Attributes/Transaction
Determine the data points that will be assessed. This could be attributes or transaction data (e.g. record accuracy, asset location sample testing).
3. Define the Population/Sampling Unit
Pamela McFarland of the NPMA considers this the most critical step in the entire process. Focus on record population with similar characteristics (e.g. transfers) and specify the time frame assessed (last 12 months of records) upfront.
4, 5, and 6. Specify Acceptance/Rejection Rate, Determine Sample Size, and Randomly Select Sample
According to the Guidebook for Contract Property Administration, “When using a sampling plan, the Government’s risk shall not exceed 10% (a 90% confidence level). Using this sampling plan, the Government will discover defects of 10% or more, if they exist, 90% of the time.”
7. Perform Audit Procedure
The results of the planning are realized in this step. The results of these tests are the documented audit evidence of the assessment.
8. Analyze Defects/Deviations
Care must be exercised to ensure validity of any findings. You must carefully distinguish between true system defects and non-systemic deficiencies, the significance of the deficiencies, and classify major vs minor items.
9. Generalize from Sample to Population
Having analyzed the defects from several perspectives, step nine requires that an inference be made between the statistical sample and the overall population.
10. Determine Status of Process/Process Segment
How significant are the deficiencies within the process? Would the deficiencies lead to the property management system being considered inadequate? What is our risk?
Once the final report has been compiled it is prudent to review the file to ensure it is complete, written from an encouraging perspective, succinctly identifies areas of risk, includes timelines, and points of contact. Additionally, the team should be looking to the future. Decide how lessons learned should be applied to the next assessment, and when it should occur.
Now that you’re (hopefully) more motivated to perform a CSA, I’d like to share a contractor self-assessment checklist our team made. The checklist makes it easier for your team to perform a CSA, by covering all in one document:
- Why perform a CSA
- Who should perform the assessment
- What your CSA should include
- What to include in your report
Self-assessment, whether in our personal lives or in our work lives, can be scary. But we all need to realize that exposing a weakness is liberating! It relieves us of feeling that we are hiding something we shouldn’t be. It also enables others to understand how they can help. Weaknesses are opportunities to improve, and who doesn’t want to improve?
I encourage you to make a thorough, objective self-assessment a regular part of your government property management plan.