In January of 2020, the Department of Finance’s Treasury Tax Audit (DOF TRE Tax Audit) Team, led by Ken Martinez, noticed that their write-ups could take two to several hours to complete. Plus, there were many redundant steps in the process.

Furthermore, Auditors have high productivity rates and should be using those hours for more productive means.

Thus, through the Denver Peak Academy’s Lean methodology, they decided to go from 2-6 hours per audit write-up to one hour or less per audit write-up.

An image of the first section of the Tax Audit Team’s Innovation Form.

Through working meetings & sessions, Ken & the DOF TRE Tax Audit Team identified dozens of ideas.

For example, they hypothesized (via the If we…/Then we tool) that if they created write-up procedures & standards of work, then they could decrease the number of hands-on audit write-up items.

Their procedures weren’t perfect initially (& nothing ever is) but very promising, especially after they ironed out some challenges to ensure the standards & policies aligned with their strategic goals.

An image of the Tax Audit Team’s Gap Analysis via the Innovation Form. This tool is used to identify where there is an opportunity for improvement within the process/system in question.

Moreover, the team decided to put all audit write-up documents in Gentax (the unit’s database for tax audit & compliance information) to have a central, non-duplicative repository for items.

Moreover, the team decided to research file saving in “Gentax” to establish a checklist for the process.

After six months of improvement, the team walked away with over $40K in soft-dollar savings, which allows the team to work on other tasks or strengthen the outputs/bandwidth & overall quality of the team’s audit writ-ups.

So what were some of the barriers to this innovation? They didn’t always use the most relevant Lean tool to analyze and group ideas, & some of the group didn’t want to use as many Lean tools as they did to improve the audit writ-up process.

An image of the Tax Audit Team’s Plus Delta, a section of the Innovation Form that helps teams leverage what went well & avoid or improve what did not go well during the improvement process.

Lastly, what went well? Meetings were well-attended, and participants provided great feedback. The team kept an open-mind for the majority of the project, submitted complete ideas freely & without fear, & the meeting environment was positive – psychologically safe.

Innovation isn’t always accessible, but you can accomplish more than you thought possible when you have a supportive team & psychologically safe environment. Innovate. Elevate. Repeat.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s