The District of Cognitive Dissonance

There must be a parallel universe where no banks fail, Wall Street needs no oversight, all mortgages are secure, consumer rights rule the day, there's no federal deficit, and Republicans and Democrats agree on everything. It used to be that this parallel universe would bleed over into ours -- we could count on the federal government generally to conduct oversight, balance spending, and just get things right.

No longer.

In our world, despite a dire economic situation with enormous odds stacked against us, our government is seriously dumbing-down its own financial prowess, as evidenced by the recent minimum qualification standards set for the government by the Office of Personnel Management (OPM) covering all the government's financial positions.

Among the so-called "competencies" by OPM's minimum standards are the usual skills in the "plays well with others" category, like interpersonal skills, teamwork, and customer service. Two "technical" skills are also required and they include reading comprehension and ... wait for it ... arithmetic.

Since we're talking remedial, let's spell it out. That's A-R-I-T-H-M-E-T-I-C.

That's right. To qualify for key federal financial management positions, you must be able to read and do arithmetic.

Math isn't even mentioned, much less skills in reconciling accounting data, forensic accounting audits, preparation of financial statements, budget forecasting, or financial modeling. Indeed, you can qualify for the nation's highest level auditing, finance, budget, and accounting positions as long as you meet that basic requirement. Arithmetic.

So if you want to go after one of those Securities and Exchange Commission accounting or auditing positions (average salary $158,000) or other agency financial positions (average salary $181,000), be sure you can handle basic arithmetic. OPM allows for you to qualify even if you need "frequent guidance" to use arithmetic properly.

This is worth repeating: Our nation's highest level finance and budgeting positions will require an advanced proficiency in arithmetic. At the advanced level, you are expected to require "little or no guidance."

Thank goodness OPM has provided a glossary of definitions for terms such as "attention to detail", "teamwork", and yes, "arithmetic," defined by the agency as: "Performs computations such as addition, subtraction, multiplication, and division correctly using whole numbers, fractions, decimals, and percentages."

If online users search for the phrase, "What is the difference between arithmetic and math?", and they'll get 2.69 million results with the answer. The most frequent one given is an elementary analogy: "Arithmetic is to mathematics as spelling is to writing." Mathematics includes arithmetic, algebra, calculus, geometry and trigonometry, and the study of relationships using numbers. The kind of thing you might use to, let's say, design algorithms for high-frequency trading (HFT) in a Wall Street firm.

HFT or algorithmic trading relies on computerized algorithms to capture trading opportunities that may open up for only a fraction of a second. HFT uses computerized algorithms to analyze incoming market data and deploy proprietary strategies to allow a firm to hold an investment position for seconds and rapidly trade in and out, sometimes thousands or tens of thousands of times a day. (Thank you, Wikipedia).

In a July 2011 report by an international body of securities regulators, the International Organization of Securities Commissions concluded that while "algorithms and HFT technology have been used by market participants to manage their trading and risk, their usage was also clearly a contributing factor in the flash crash event of May 6, 2010." By 2010 HFT accounted for more than 70 percent of equity trades taking place in the U.S. and was rapidly growing in popularity in Europe and Asia.

While the government decides whether or how to regulate HFT, consider this: What competencies did the firms expect in the people it hired to develop these algorithms, computer applications, and business models? Putting government regulators, with their core competency in arithmetic, up against business models like this is a like fielding a pee-wee football team against the NFL's New England Patriots.

How is it possible that OPM managed to ignore not only the financial mess we've endured since 2008 but also the future economic challenges of the country?

OPM did not bother to ask the Federal Chief Financial Officers Council or the Association of Government Accountants for review, making the standards a colossal waste of time and money. Maybe OPM wanted to avoid a potential backlash. Maybe it wanted to avoid yet again confronting its own lack of competency, since its human resources experts equal a slim 8 percent of OPM's total workforce. Maybe because OPM's core mission, setting standards and policies for the government's personnel programs, is of less importance than its fee-based business, which is a whopping 16 times larger.

OPM's approach shows a complete disregard for and lack of connection to the stark reality Americans live every day.

Standards like these reinforce the public perception that government employees lack the ability to perform at the level of their private sector counterparts. And this isn't the first time OPM has managed to dumb down requirements. A few years ago, a similar set of criteria established the standards for information technology specialists in the government. And just as with financial standards, OPM lowered the bar: ZERO technical skills were required to be in information technology -- amazing considering the necessary skills and the job title itself have the letters "T-E-C-H" in them.

What did OPM require of information technologist candidates? The standards stressed oral communication skills and customer service -- leaving highly sought talent in cyber security and cyber warfare completely unaddressed. Today, it's the government's biggest technology challenge, met largely by private sector contractors whose companies know precisely what skills are needed to address this growing concern.

No wonder we are seeing as an extremely shallow government as a consequence of failed policy setting.

And all of this is happening at a time when contractor billing rates are coming under scrutiny by those in a Congress with a mandate to cut spending. Contracting out work is a result of the government's "standards" that make it impossible for the government to compete for talent. When talented candidates apply for positions and see standards that could apply to an elementary school student, it gives them pause. Let's face it: Talented people want to work with comparably talented peers.

And when federal managers are held accountable for performance, they want higher standards to ensure employees have the necessary skills on day one. New hires under age 30 in federal government leave within the first three years of service at a rate of 25 percent per year -- in some agencies the attrition rate is as high as 45 percent. Standards that give the nod to mediocrity over excellence short-change federal managers trying to build and retain a high performance team. If new hires can't hit the ground running, you don't have time to train them before they exit.

As Joint Chiefs of Staff Chairman Adm. Michael Mullen said, "The most significant threat to our national security is our debt."

Dumbing-down the skill requirements of federal employees increases this threat exponentially. OPM should get out of the way of progress and delegate the assessment of candidates to the people accountable for their performance in the workforce. That would be business as unusual.

The speed of change in our society, the agility required by organizations, the millions impacted by the consequence of errors, and the expectations of citizens about their government all shout that it's time for systemic change. Now is the time to do this one, simple, and small change to start on the path to make us whole again.

It's as simple as arithmetic.

Linda E. Brooks Rix is co-CEO of Avue Technologies. Founded in 1983, Avue Technologies has pioneered the technology of smaller, better government. The company provides the public sector with integrated technology and service solutions that dramatically increase enterprise-wide visibility and management effectiveness, workforce productivity, and manager and worker satisfaction. In the fight against "business-as-usual" in Washington, Avue helps power "business-as-unusual." Avue is a privately-held company headquartered in Tacoma, Washington and with offices in Washington, D.C.