Applying TQM principles to the finance department: the city of Auburn experience.

• Author: Jackson, Andrea
• Position: Total quality management - Alabama

This article describes how Auburn used total quality management to improve the finance department's services to internal and external customers.

The City of Auburn, Alabama, has a population of 40,000 and is home to Auburn University, Alabama's largest land grant university. Since 1997, the City of Auburn has devoted significant effort to providing quality government to its citizens through total quality management (TQM). Because a major objective of TQM is to provide high-quality services to customers by maintaining a constant focus on the customers' viewpoints and needs, Auburn works to meet these needs by obtaining customer input and by using creative problem solving.

TQM recognizes that organizations typically have both internal and external customers. A TQM technique for maintaining customer focus and providing a framework for identifying problems and devising creative solutions is the concept of quality circles (QC). QCs consist of a small group of employees who provide a specific service to its customers. These groups may involve employees from one department or across several departments.

Auburn's city manager has spearheaded the TQM program by supporting the creation of a wide variety of QCs and providing funding for a QC facilitator. As part of this process, the QC facilitator provides training in quality circle principles and practices to city employees. Some of these employees have used this education and experience to train additional city staff. Employees have found QCs to be an effective approach to problem solving in the course of their work.

Finance Department's Role

In management theory, one way of structuring organizations is to divide departments and divisions between line and staff functions. Those directly related to the organization's primary mission are line functions and those that enable the line functions to accomplish their objectives are staff functions. When the public thinks about local government, it is the line departments' functions (e.g., public works and public safety) that typically come to mind. The staff departments are not visible and are often viewed as a minor government function.

Staff functions play an essential role in overall operations. The finance department, for example, is responsible for preparing and administering the budget, collecting the city's revenues, issuing checks to the government's vendors and employees, borrowing funds when necessary, and issuing financial reports to meet legal and managerial requirements. These responsibilities often are accomplished in collaboration with other staff departments, including the chief executive's office, the management information systems group, and the human resource management department.

There is not much visibility connected to paying the bills and getting an accurate payroll out on time, enforcing the tax laws, or publishing the annual financial report. Yet it is these behind-the-scenes duties that make it possible for the firefighter to turn a stream of water onto a fire, the librarian to assist a student in finding resources for a term paper, and the street maintenance crew to repair a pothole.

Serving the Internal Customers

Payroll Services. The single largest internal customer group served by the finance department is the city and water board employees. The primary service that finance provides is high-quality payroll services. In the city of Auburn, payroll services are provided through a collaborative effort among the departments of finance, human resource management (HRM), and information technology.

The most important function of payroll services is to provide an accurate and timely payroll check to all employees. Less obvious but essential payroll services include:

* ensuring accurate transmission and reporting of payroll withholdings to the proper entities,

* ensuring accurate and timely end-of-year tax forms,

* ensuring that the city's Payroll Account always has sufficient funds on deposit to cover the payroll checks issued so that employees' earnings are immediately available to them,

* ensuring accurate and timely transmission of non-tax payroll withholdings (e.g., garnishments and child-support orders) to ensure employees' legal compliance,

* allowing for direct bank deposit of employees' net pay,

* using payroll software to enable the city to offer a variety of employee benefit...