Tuesday, April 19, 2011

Time for Spring Cleaning

Long ago, certain Indian tribes were given plots of land out west from the Federal government because the US took their real land years earlier. Thereafter, the Federal government realized that the land they had given out could be used for mining, grazing, extracting oil and gas and other money making ventures. So the federal government told the Indian land owners they would lease their land out for them and deposit the proceeds into accounts set up for the benefit of the Indian landowners. Well, things didn’t go as planned. In fact, many Indians didn’t receive what they thought they should be receiving and the monies from the leases weren’t finding their way into Indian hands. So after many years of trying to get what they had coming to them, in 1996ish, the Indians decided to sue the federal government. They sued for an accounting of the monies taken in from the leases and where the money was being dispersed. The problem was that the federal government had done a really bad job at record keeping so they weren’t even sure what went where and to whom.

Let me share a civics lessons I learned in middle school — the government is here for the US people (which includes Indians) and are put in a position of trust because they are believed to be able to do right by the people of the country. When the money didn’t come as expected the trust began to be eroded (actually the Indians trust in US had been eroded over a couple centuries pretty substantially any way).

As the lawsuit got underway, what was really clear is that there was so much information which had been mismanaged over decades, piecing together what really happened was going to be a major challenge. In deed, the Wall Street Journal, a paper which focuses on business and business failures, asserted the prediction that unearthing and producing records and evidence in the lawsuit would cost in the billions just to see if anything was relevant.

Let me share lessons learned from our consulting practice. If you don’t start cleaning info crud up, you fail to be as efficient a business as you can be and run a huge risk if a lawsuit or audit happens.

Back to our saga. Years go by, and the government gets lambasted for record keeping failure after record keeping failure of various kinds by the court. High-level government officials are held in contempt, get wacked for gross mismanagement, security failures etc.

After roughly 17 years of litigating the case is about to settle for around 3 billion dollars.

Seems like bad business all around.

Spring cleaning time folks. Get serious about cleaning over retained records. If you don’t know where to start, call us.

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