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How to Promote
Internal Controls to
Managers and Employees

Bill Herman
For the want of a nail, the shoe was lost;
for the want of a shoe the horse was lost;
and for the want of a horse the rider was lost,
being overtaken and slain by the enemy,
all for the want of care about a horseshoe nail.

Ben Franklin
(sort of)
For the want of a nail, the shoe was lost;
for the want of a shoe the horse was lost;
and for the want of a horse the rider was lost,
being overtaken and slain by the enemy,
all for the want of care about a horseshoe nail.
Benjamin Franklin included a version of the rhyme in his
Poor Richard's Almanac.

The earliest known written version of the rhyme is in John
Gower's Confesio Amantis (The Lover’s Confession)
dated approximately 1390.

Do Not Leave Things to Chance
Objectives of the Session
Objectives of the Session
How to connect with managers
How to connect with employees
How to get the target groups to take
ownership
How to follow through and keep the target
groups engaged throughout the year
Connecting with Managers
Get invited to the party.
Get management’s attention.
Keep their attention (Continually reinforce
the message).
Give them positive feedback.
No, Tuesday’s out.
How about never?
Does never work
for you?

Getting invited to the party
Connecting with Managers
Get Invited to the Party
Remind/Inform the Commissioner that, at
the end, he/she will need to certify the
process to the Budget Division.
Get on the Commissioner’s Executive staff
meeting agenda and present the process
to managers.
Connecting with Managers
Get Their Attention
At the Party
– Have the Commissioner or other high level executive
introduce you (Gives you and subject matter instant
credibility).
– Build off the meeting with follow-up memo, telephone
call, email, etc.
– Let them know that you will be meeting with certain
programs individually (if necessary) but are always
available for questions/assistance. Remember, face-
to-face follow-ups are the best.
– The message is that the program person is key and it
is important that they correctly participate in the
process.
– If you give them your time, they may be more willing
and ready to give you (and the IC process) their time.
Connecting with Managers
Get Their Attention
Remind them of the Tone at the Top (State
Operations, Commissioner, control agencies).
Three second rule for a hitter, elevator speech
Make it matter to them.
Do they want an auditor to headline their
problems and the fact that either they did not
know about the problems or knew about them
but failed to manage them?
Do they want to read about their operation in the
newspaper or see it on the nightly news?
The Titanic received seven different iceberg
warnings on the day of her sinking. Six of which
were disregarded by Captain E. J. Smith. The
seventh warning never made it to the bridge.
In less than a minute, the
Hindenburg was reduced to
smoldering wreckage.
For want of an O-Ring
Can it Happen
Here, in Your
Organization?
September, 1971
Two spans of a Thruway bridge
over the Schoharie Creek
collapsed. Five vehicles plunged
into the Creek and 10 people were
killed.

April, 1978
Before 1990 regulation of the tire yards was left to local
officials. The Catskill fire involved 2 million tires in piles 100
feet high. In New York State, an estimated 18-20 million waste
tires are generated each year. By 2004, DEC had identified
approximately 95 locations, containing an estimated 29 million
tires.

March, 1989
Fountain Day 2004 was an especially out of control event. A beautiful
70 degree day brought many more than the average 4,000 students
to the fountain. Many students suffered minor injuries. Someone
slashed the Five Quad ambulance tires as a prank. A student dove
into the fountain and had to be taken to the Emergency Room.

April, 2004
Hadlock Dam. Flooding by 10 million gallons of water.
600 evacuated. Several roads washed away or closed.
Extensive power outages. State of emergency across
Washington County.
July, 2005
"There was a problem with the internal controls at OMH,'' Cuomo told a
news conference Tuesday afternoon when pressed about how the fraud
could go undetected as long as it did.

"The good news is, it was found out,'' DiNapoli said.

April, 2007
Connecting with Managers
Keep Their Attention
Hit them with something obvious.
Hit them with something current.
Keep the message relevant.
Keep hitting them.
Put them in the situation.
Make them feel the pain if their program had to
own the problem.
Make them feel the anxiety.
Make them feel the public embarrassment.
Connecting with Managers
Keep Their Attention
Use a multi-part process that is easy to
follow.
Help managers understand
– Where they are
– Where they are going
– Where they have been
Employ lively documents.
Use white space.
Provide visual clues.
New York State Department of Environmental Conservation
Office of Internal Audit, 12th Floor
625 Broadway, Albany, New York 12233-1060
Cover memo
Phone: (518) 402-9147 • FAX: (518) 402-9145
Website: www.dec.state.ny.us Denise M. Sheehan
Acting
Commissioner

MEMORANDUM

Sell as a tool
TO: Bureau Managers
Program Supervisors to help
FROM: William L. Herman, Internal Control Officer manage
SUBJECT: Internal Control Program 2005-2006
Forms and Manager’s Guide

DATE: September 30, 2005
Set realistic
expectations
Attached are the 2005-2006 Internal Control Review forms and the accompanying
Manager’s Guide. The Internal Control Program is designed to assist you in carrying out your
managerial responsibilities. It provides a tool for your use in reviewing different subject areas
and identifying current or potential obstacles to achieving your Bureau or Program’s objectives.
Give them the
Reviewing your unit’s internal controls is a fundamental part of good management and
good supervision. While it may not be possible to recognize and control every risk, this process worst case
is intended to assist with identifying significant programmatic and operational risks, as well as
developing strategies to manage them. scenarios
We are familiar with some of the more infamous disasters due to poor internal controls
that either did not adequately identify risks or poorly managed those risks:
Bring it home.
 Air travel security before 9-11
 Corporate accounting scandals before Sarbanes-Oxley Make it
 NASA’s space shuttle program before Challenger
 Evacuation procedures before hurricane Katrina relevant
Now think of incidents this past year for which this Department had oversight. Could the
incidents been avoided? Could they have been managed better? While, this internal control
review requires a fair amount of effort, it is designed to help the Department to better identify
and address the risks we face.
Make the
process
The enclosed internal control review forms contain instructions to take you through the
four-step process. The accompanying Manager’s Guide provides additional detail, descriptions
supportive
and explanations of the process. Assistance also can be obtained from your division or region
internal control liaison or directly from the Office of Internal Audit. Please contact Dave
Higgins of Internal Audit when additional guidance is necessary. Include the
ICR package
Enclosures
Connecting with Managers
Keep Their Attention
Boring
Connecting with Managers
Keep Their Attention
Connecting with Managers
Keep Their Attention
Step 1 -
Manager’s
Review Of
Inherent
Risks
(due early November)
Step 2 -
Manager’s
Assessment
of Current
Risks
(due early November)
Step 3 -
Corrective
Action Plans
(due early December)
Step 4 -
Bureau/
Program
Summary
(due mid December)
Connecting with Managers
Keep Their Attention
Remind that good management is year
round and so is maintaining good Internal
Controls.
Provide support and noticing through the
internal website.
Mid-year reminder with deliverable.
Connecting with Managers
Keep the Message Realistic
Acknowledge that the process is an art and not a
science.
Accept that ‘You don’t know what you don’t
know.’
Sell the process as an exercise to identify known
risks and to discover previously unknown risks.
Emphasize that the process helps the managers
to think about how to resolve or manage the
risks.
Connecting with Managers
Give Positive Feedback
Relate success stories and build into an
organization-wide risk mitigation effort.
Share lessons learned where solutions
can address common risks. Do not throw
any program or manager in by name.
Recognize that good internal controls is
good management.
Identify possible budget justifications that
come out of the process.
Connecting with Managers
Give Positive Feedback
With the new year’s process, share information
gained from the previous year’s review.
– It presents a tangible product for those who put
considerable time and effort into conducting the
review.
– It gives people a better sense of the kinds of activities
that are covered through the review (e.g., program
operation reviews, not just money).
– It offers managers insights into the positive steps
taken by others to address risks within their own units
(again, shared solutions).
Connecting with Managers
Give Positive Feedback
Turn the mid-year review into a positive thing for
managers. This is an opportunity:
– To let program managers know someone is paying
attention to their efforts and their efforts are important
enough to be tracked.
– To share what was reported to the Division of the Budget
and thereby provides feedback, elevates what the
managers do and makes them feel the effort was worth it.
– To recognize notable Internal Control improvements. This
gives credit where credit is due and provides good
examples that could be replicated elsewhere in the
organization. Ask the program managers to share the
accolades with their staff.
– For programs to explain progress (or not) with a Corrective
Action Plan Follow-up Report.
Connect with Employees

Make It Matter to Them
Tips for Connecting
Connect with Employees
Make It Matter to Them
Take pre-emptive measures. Reinforce the idea
that it is better for employees to disclose risks
and weaknesses before something happens.
Do the right thing. If an employee sees
something wrong, then they should try to get it
fixed.
CYA. Remind the employees that by identifying
risks or weaknesses before problems occur
helps protect them from being accused of hiding
things that should be addressed.
Connect with Employees
Make It Matter to Them
Influence the process. By offering solutions to
eliminate or manage risk, employees can
influence new processes to their liking.
Support funding to addressing risk . Hold out
possibility of budget justification for better tools
(NPS) and/or more or correctly titled staff, etc.
(PS).
Maintain pride in one’s job. Do not have to read
about their operation in the papers or watch on
television.
Connect with Employees
Tips for Connecting
Motivate
– Soon, certain and positive consequences are
better than future, uncertain and negative
consequences.
– Recognize and reward good IC work
throughout the process.
– Fear is a motivator for some who do not
respond to the positive approach.
Connect with Employees
Tips for Connecting
Effective Speaking
– Talk slower.
– Talk louder or softer (change to reinforce the
important portions of the presentation).
– Speak clearly .
– Talk in terms in which your audience can relate. That
means skipping some of the IC terminology (e.g.,
COSO) that might confuse or muddy the main points
you want to get across.
– Remember the goal is to motivate your audience to
effectively handle the IC process and deliver useful
results.
Connect with Employees
Tips for Connecting
Effective Speaking
– Make sure you audience is listening not just hearing.
Ask for feedback. Make them respond.
– Make sure emphasis is placed on the appropriate
words in the way you mean.
I fixed the problem.
I fixed the problem.
I fixed the problem.
– How you say something is as important as what you
say.
Connect with Employees
Tips for Connecting
Effective Listening
– Selling is a two-way street. If you want
someone to listen to you, you have to listen to
them. Effective listening requires effort
– Pay attention, look at the person, hold off
interruptions, ignore distractions.
– Give feedback.
– Acknowledge understanding.
– Effective listening can support effective
speaking.
Connect with Employees
Tips for Connecting
Less obvious communication factors
– Can enhance or detract from message.
– Body language
Gestures
Stance/Posture
Facial expressions
– Tone of voice and manner of speech.
Send the correct message (IC is important to the
Department, to the boss and to me)
– Actions can speak louder than words.
Managers and Employees
Ownership
Follow Through
Ownership

Responsibility Control

Ownership

Value
Ownership – Why It Is Avoided

Problem Solution

Fear Do something, act

Fatigue Make it fresh, exciting

Training KISS, walk through

Interest Delivery, provide recognition,
make it relevant
Ownership - Overcoming Fear

"Courage is resistance to and mastery
of fear -- not the absence of fear."
Mark Twain

Visualize achieving the goals
Avoid negative thinking and talk
Meditation
Just get over it and do it
Ownership – Why Not?
Being able to say, “I told you so” is
better than “D’oh.”
It is better to identify risk and
correct or mitigate it than to hide or
avoid the risk or worse yet, pretend
the risk is unknown.
It is often more work to clean up
after the problem/failure occurs than
work to prevent it from happening.
Follow Through
Work with Internal Audit
Mid-Year report
Awards or recognition of good effort
Outreach effort
Adjust the upcoming IC review based
upon what was learned from the prior year
Follow Through
Internal Audit

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Internal Audits

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Follow Through
Mid-Year Report
Let the program know that its progress in
addressing risks is important and is being
tracked.
Give the programs some feedback on the
process.
Offer another means to monitor program
progress.
Follow Through
Awards/Recognition
Award NICIs (Notable Internal Control
Improvement).
– Recognize programs that address long
running or major problem.
– Recognize programs that address the largest
number of weaknesses.
Profile a member of the internal control
staff in the agency newsletter.
Follow Through
Outreach Effort
Spend extra face-to-face time with a program or two
each year.
Sell yourself as free help (IC consultant services) to
program managers.
Schedule time to walk programs through the IC process.
Work with programs to develop solutions that incorporate
internal controls (e.g., separation of duties, independent
reviews, etc.)
Capture feedback and critiques from the program about
the process in general.
Remember, the time you spend this year will buy you a
better product and more goodwill next year.
Follow Through
Adjust the Process
Adjust the upcoming year’s process and
questions based upon what was learned from
the prior year and mid-year IC process.
Recognize weaknesses identified by audits.
Adjust the process for organizational changes.
Incorporate Executive, Legislative and/or
organizational priorities.
Learn from problems identified outside the
organization.
Summary/Conclusion
Promoting the Internal Control process
takes energy.
The effort you put in to the process will
pay off.
Work smart to make the most of the effort.
Recognize the importance of IC and
delivering a good product but enjoy the
challenge along the way and meeting
many people in your organization.
Thank You

Bill Herman
wlherman@gw.dec.state.ny.us
518-402-9306