Developing Effective Checklists to Support the Internal Audit Function - Webinar


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Internal audits are a mandatory requirement for many food safety standards. When developed and used correctly, checklists assist the auditor to gather good, clear objective evidence. This webinar will discuss the different types of tools available and will provide you with useful insights into their development

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Developing Effective Checklists to Support the Internal Audit Function - Webinar

  1. 1. Developing effective checklists to support the internalaudit functionAndrew Nash16th May, 2013
  2. 2. General DisclaimerOpinions expressed by or on behalf of SAI Global published throughMyTutor or presented during MyTutor live webinars is provided as generalguidance only and does not amount to formal legal or other professionaladvice. SAI Global does not warrant the accuracy or completeness ofinformation given or its fitness for any particular purpose.To the extent permitted by law SAI Global accepts no liability for any claimsfor loss or damage whether caused by its negligence (or that of any of itsagents or employees) or otherwise. For full terms and conditions of use,please visit
  3. 3. How it all worksWebinar 60 minsQ & A 30 minsAsk questions via the Chat / Questions function in theside panelDidn’t get your questions answered?A discussion board will be open to answer anyquestions not covered in the webinar. These will beposted in Ask MyTutor.
  4. 4. Session Agenda• Introduction (5 min)• Details of the topic (40 min)• Q&A (35 min)
  5. 5. Food SafetyFood Safety
  6. 6. Food Poisoning is Increasing• Change in life style– Less time to prepare and cook• Change in eating habits– Eat out more, convenience, eat different foodsto previous generations• Change in food processing– Minimally processed, extended shelf life, pre-preparation, often prepared by untrainedworkers• Greater legal responsibilities for safe food• Better reporting and testing
  7. 7. Food LegislationFood Legislation
  8. 8. Commonwealth• Food Standards Australia New Zealand– Develops Food Standards Code (FSC)– no power to enforce• Biosecurity Australia – DAFF (formerly AQIS)– Exports and import control• ACCC (Competition and Consumer Act)– Fair trading and claims– False and misleading• APVMA (Aust. Pesticide & Vet. Medicines Authority)– Maximum Residue Levels (MRLs) & agricultural chemicalapprovals• NMI – National Measurement Institute– Weights and measures legislation• Other Federal Authorities– TGA, Customs, etc
  9. 9. State & Territory• Each State has its own Food Act– Only sell safe and suitable food– Comply with FSANZ Food Standards Code• Environment Protection Authority (EPA)– Waste and pesticides• Food Authority– Most States have a single body– Paddock to plate responsibility• Local Government– Environmental Health Officers
  10. 10. State Food Acts• Offences– Knowingly selling unsafe food– Handling food in a manner that will result in unsafefood– Falsely describing food• Penalties*– Typically $110,000 and/or 2 – 4 years gaol forindividuals or $550,000 for corporations* varies from State to State pending the relevant State Food Act
  11. 11. Convictions• KFC restaurant, NSW, $56,000 for failing to maintain thepremises in clean condition and good state of repair• Sizzler restaurant, NSW, $21,000 for failing to keep premises,clean and free from pests and store products and garbagehygienically• Dominos Pizza, Qld, $40,000 for failing to prevent pestcontamination and selling contaminated food• Canton Restaurant, Vic, $265,000 for filthy premises, very badfood handling practices
  12. 12. Due Diligence• State Food Acts allow the defence of Due Diligencewhen a Food Business– “…took all reasonable precautions and exercised alldue diligence ….”• Development of a Food Safety Program– “taking reasonable precautions”• Making sure your Food Safety Program is working andbeing complied with– Is part of exercising “due diligence”Internal auditing can help you prove this !!!
  13. 13. Quality Assurance &Food Safety ProgramsQuality Assurance &Food Safety Programs
  14. 14. What Is Quality Assurance?“Part of quality management focused on providingconfidence that quality requirements will be fulfilled”AS/NZS ISO 9000:2006• Internal auditing is used to “demonstrate” that the“quality requirements” have been “implemented”and “fulfilled”
  15. 15. Quality Assurance & Food Safety Programs• Food Safety Standard– Defines what a Food Safety Program (FSP)must address• Food Safety Program– Food safety plans, procedures, specifications,methods and work instructions– Defines what an organisation will do• Records– Records, reports, test results– Evidence that procedures were followed
  16. 16. Food Safety Standards• Food Safety Standards– Legislative Standards• FSANZ FSC - 3.2.1 – Food Safety Program• Vic – most food businesses• Qld – catering and private hospitals• Vulnerable populations - nationally• AQIS Approved Arrangements (export)– Customer Standards• SQF Code• ISO 22000• BRC• WQA• Yum Restaurants• McDonalds
  17. 17. Food Safety Standards• Internal auditing is a key component of all thecommon food safety standards used in the foodindustry– Demonstrates that the business identifies anddeals with issues before they become a majorproblem• Requires commitment by management– Sufficient numbers of auditors that are properlytrained– Allocation of time for audits and recognition ofimportance of audits
  18. 18. Food Safety Standards• The standards typically require that the internal auditprogram covers the following:– Audits are scheduled to cover all parts of the FSP– Audits are undertaken by trained auditors who ideallyare independent of area being audited– Audit outcomes are communicated to stakeholders– Corrective action is undertaken and verified– Records of audits and corrective action aremaintained
  19. 19. Food Safety Standards• Other common components of food safetystandards which require auditing:– HACCP based risk assessment for food safetyhazards– Pre-requisite programs– Suitable premises and equipment– Records are maintained– Covers relevant food legislation
  20. 20. Premises FacilitiesEquipmentPRPFood SafetyProgramHACCP
  21. 21. Food Safety Program• Typically the Standards require that you meet therequirements by having procedures that are:– documented (written down)– implemented (put into action)– assessed for effectiveness (checked)– have corrective action undertaken (fixed)– have records maintained (proof)* Internal auditing is part of the assessment ofeffectiveness
  22. 22. ANY QUESTIONS ?
  23. 23. Types of AuditsTypes of Audits
  24. 24. What is an audit ?“Systematic, independent and documentedprocess for obtaining audit evidence andevaluating it objectively to determine the extent towhich audit criteria are fulfilled”AS/NZS ISO 9000:2006In basic terms:“An evaluation of past history and currentpractices to provide a future projection ofperformance.”
  25. 25. What is an audit ?• First party audit– Us on us• Internal audits• Second party audit– Us on supplier– Customer on us• Supplier audits• Third party– Independent organisation on us• Certification audits(WQA, BRC, SQF, ISO 22000 etc.)
  26. 26. What is an audit ?Purpose of an audit is to determine if:• Requirements of the Food Safety Standard have beenmet – Referred to as a Desk Audit• Food Safety Program procedures are being followed –Referred to as a Compliance Audit• Food Safety Program procedures are being followedand are effective – Referred to as a Systems Audit– methods are appropriate– monitoring frequency is appropriate– corrective action is appropriate– hazards controlled
  27. 27. Desk AuditPolicies &ProceduresUse checklist to confirm thatpolicies and procedures meetrequirements of the Food SafetyStandardFood SafetyStandard
  28. 28. Compliance AuditPolicies &ProceduresUse checklist to check thatpolicies and procedures arebeing complied withRecordsInterviewsObservations
  29. 29. Systems AuditPolicies &ProceduresSimilar to a compliance audithowever we are also asking:• Are the policies and proceduresappropriate and effective?• Is what we are saying and what weare doing working?
  30. 30. ANY QUESTIONS ?
  31. 31. HACCPHACCP
  32. 32. HACCP• HACCP is an integral component of most food safetyprograms• Internal audits will have to determine if:– HACCP Plan is being followed– HACCP plan effective/appropriate• Significant hazards been identified• Control measures appropriate/effective• Critical limits justified• Monitoring procedures appropriate• Corrective actions appropriate• Verification activities adequate to demonstrateeffectiveness of HACCP plan• Sufficient records to demonstrate that plan is beingfollowed
  33. 33. HACCP Audits• Hazard Hunt– At each step look for hazards arising from the 5Ps• Products - raw materials, ingredients, packaging• Premises - buildings, surrounds• Plant - equipment• Procedures - way things are done, sequence ofevents• People - operators– Checking to ensure that all potential hazards havebeen identified– Comparing procedures match practices
  34. 34. Auditing in PracticeAuditing in Practice
  35. 35. Elements of Internal Auditing• Planning / Scheduling• Develop Audit Checklists• Entry Meeting• Auditing• Assessing Compliance• Corrective Action Requests• Audit report• Exit meeting• Follow-up
  36. 36. Audit Planning• Prior to the Audit– Review the previous audit report (if available)– Check the Corrective action follow-up• Is action outstanding from previous audits?• Has corrective action been taken? Was itclosed out/ effective?– Obtain documentation required for desk audit (ifneeded)• Specific procedures or work instructions thatare required for pre-audit checking
  37. 37. Audit Planning• Entry meeting– Notify your auditee of the time and date of audit;make sure processes are running– Scope - what you will be looking at• Products• Processes• Procedures• If auditing off-site (e.g. another site in yourcompany), entry meeting will be more formal.– Confirm with your auditee:• Start, finish and break times• Guide will be available (if required)• Room for report writing (if applicable)
  38. 38. Audit Guidance ToolsNo auditor should want to perform an audit withoutusing an audit guidance tool that indicates the issuesto be investigated.Types include:• Checklists• Marked-up procedures• Flow charts38
  39. 39. Benefits of Audit Guidance Tools• Act as a guide – balance, depth, scope• Provides objective evidence• Aid memory• Future planning tool• Collect notes• Used for audit findings• Assist with audit reporting39
  40. 40. Marked Up ProceduresProcedure: Copy Centre1. The customer order shall be date and time stamped upon receipt. TheJob Sheet is prepared and shall include colour, ink, paper, binding andquantity of copies.2. A white photocopy of the Job Sheet shall be taken and placed with theproof copy. The Printer Supervisor shall sign the proof copy beforethe print run commences.3. During the printing process, Copy Centre Operators are responsible forensuring that adequate stocks are maintained for print runs. Requests formaterial are to be directed to the Stock Control Manager.4. Upon completion, each job shall be sorted and packaged as required.The Job Sheet should be completed and maintained with the packagedjob.40
  41. 41. Audit Flow ChartIdentify Part NumberStartSemiconductor TestingTest PlanavailableCheck Sample SizeEquipment CalibratedTest Record CompletedStopCheck Work OrderIdentify RequirementsPreparation of Test PlanPlan 645 - 13/12/99Auditor: J Brown26/12/02IC4637xeIC7721vNo planOrder placed 10/10/99Referenced fromIC7720xStarted - Due01/2000No recordssighted#340 for Plan 645Tester 6 - 5/02/00Burner - 12/06/0041
  42. 42. ChecklistsAn audit guidance tool does not provide an exhaustive list ofquestions and issues for the auditor to ask during the audit.REQUIREMENT CHECKLIST PROMPTCustomer orders shall be reviewedupon receipt.Are customer orders reviewed uponreceipt?How are they reviewed?Who reviews customer orders?Etc.42Example 1
  43. 43. Checklists• A checklist is a very useful tool for auditing, as it:– Defines the scope of the audit– Keeps the audit focused– Ensures that all areas are covered– Provides evidence of the audit and findings• A checklist is a series of questions that an auditorhas to find answers for
  44. 44. Checklists• Use checklists to review compliance with the procedure– Do the practices match the procedure?– Is there evidence that procedures have beenfollowed?• Example– Procedure• Specifications will be held for all purchasedproducts– Checklist• Are there specifications for all purchasedproducts?
  45. 45. Checklists – PRPChecklistHave all staff been through induction training?Does it address appropriate food safety issues?Was induction training completed before new workers startedwork?Are training records maintained?Have all training activities been recorded on form F-001?Are the records held by the HR Manager?Training ProcedureAll staff will undergo appropriate food safety inductiontraining before starting work. Training records (F-001)will be maintained and held by the HR Manager.
  46. 46. CookingHazard ControlmeasureCCPStatusCritical limitsMicrobialcontamination(E.coli & Salmonella)of raw meatingredients incooked ready to eatmealCook ofingredientsCCP Product to becooked to centretemperature>80ºCHACCP Audit Table
  47. 47. CriticalLimitsMonitoring Corrective Action Records>80ºC What: Meat component ofmealWhere: In centre of meatproductProduct: Replace in oven,continue cookingand retestF-36When: Each batch at endof cooking cycleWho: Line operatorHow: Probe thermometerplaced in centre ofmeat productProcess: Determine causeundercookingMay have toextend cookingtimeF-36Who: Line operator Who: Line operator
  48. 48. Checklists – HACCPChecklistIs the temperature of the meat checked and reaching 80oC ?Is the centre of the meat probed?Is the temperature checked at end of cooking cycle?Do they record temperatures on F-36?If temp not correct, do they continue cooking and retest?Do they investigate cause of undercooking?Do they record corrective action on F-36?Cook Step - CCPMeat component of cook-chill meal must be cooked tominimum 80oC. Monitoring of CCP is by probing centre ofmeat portion at end of the cook cycle. Corrective action if notat 80oC is to recook. Records are kept on Form-36.
  49. 49. ComparisonCOMPARISON OF AUDIT GUIDANCE TOOLSCHARACTERISTIC CHECKLISTMARKEDUP PROCEDUREFLOWCHARTProvides ready assessment of compliance with codes/standards/regulations.Graphically reveals the logic/lack of logic of the system’sdesign.Useful for partial audits; aids in phased audits andtiming in a contract/project.Good for training inexperienced system auditors.Deters preconceived ideas of auditor who compiled it.Effective for integrated management systems.May already exist within system documentation.Reveals opportunities to avoid/reduce inefficiencies.Convenient when auditing on departmental or individualtask basis.Does not take significant time to prepare.May not allow sufficient space for the recording ofaudit notes.PARTIAL COMPLETE49
  50. 50. ANY QUESTIONS ?
  51. 51. Auditing TechniquesAuditing Techniques
  52. 52. Audit Technique• Our audit technique needs to obtain Objectiveevidence to demonstrate that:– The Food Safety program meets therequirements of the Standard– The Food Safety Program has been effectivelyimplemented– The Food Safety Program is appropriate andeffective
  53. 53. Objective Evidence“Data supporting the existence or verity of something”ISO 9000:2006Note: Objective evidence may be obtained throughobservation, measurement, test, or other means• How does an auditor obtain objective evidence?– Interviews– Observations– Scrutiny of records
  54. 54. Independence• Ideally the auditor should be independent ofarea/system being audited– No responsibility for operations– Not involved in development/implementation• Avoid– Conflict of interest– Loss of objectivity• Not always possible in small business
  55. 55. Audit Technique• Recording the objective evidence:– Statements of facts substantiated by objectiveevidence, and– Records of findings• Evidence of conformance with requirements• Details of non-conformance/incident• Documents that provide evidence ofconformance/non-conformance• Form, procedure• Date, time• Area where incident or non-conformanceobserved– Record details as they happen or are observed
  56. 56. Objective EvidenceChecklist Objective EvidenceAre cleaning chemicalssuitable for use in afood premises?• Cleaning procedures (CM–037 – V2 –13/4/09) list 15 chemicals used for cleaningand sanitising• MSDS and Technical data sheets for allcleaning chemicals sighted except QuickKleen (Jimmys Chemical Company)• Technical data sheets indicate that allsuitable for use - Food Grade.• Cleaner (Joe S) indicated that Quick Kleenis used for windows in office and amenitiesarea
  57. 57. Assessing Findings –Compliance & Non-complianceAssessing Findings –Compliance & Non-compliance
  58. 58. Compliance with requirements• A checklist item may be:– “Acceptable” when• Requirements of the Standard have been met• the FSP is being followed– “Unacceptable” when• Standard, procedure or plan is not beingcomplied with• A hazard is not effectively controlled• The procedure or plan does not address therequirements of the Standard• There is no evidence that the procedure or planis being complied with
  59. 59. Audit ChecklistRequirement Objective Evidence Compliant?Is all productfrozen to -18°C beforedispatch• Load-out records (F-031)reviewed 3/7 thru 14/9• 17/7, 18/7 and 19/7 indicatedone consignment per daywas @ -2°C.• Non-conforming product wasreleased to Harry’s Meatseach day.• No documented correctiveactionUnacceptable
  60. 60. Audit ChecklistRequirement Objective Evidence Compliant?Condition ofvan ischeckedbeforeloading andrecorded onF003• Watched staff inspecting vehicleAGV-306 at 10:00am onLoading Dock 1.• Interviewed 2 receival staff andboth knew requirements well.• Reviewed records F003 13/3-29/3 all recorded vehicleinspections.Acceptable
  61. 61. Corrective Action RequestsCorrective Action Requests
  62. 62. Corrective Action Requests (CAR)• The CAR is the formal advice of a non-compliance– a.k.a: NCR, OFI – what are yours called?• What is the impact of the non-conformance?– Does it have any implication on product safety orquality?– How do we fix the immediate problem?– Why did this occur and what can we do to prevent ithappening again?• CAR must identify– The requirement of Food Safety Program that has notbeen complied with– Objective evidence of the non-conformance
  63. 63. Corrective Action Requests (CAR)• The company must take corrective action toresolve the CAR– As the internal auditor you may be involved innegotiating an effective solution with the auditeeand/or management team– How will the problem be addressed• Non-conforming product – dump, dispose,regrade?• Fix immediate problem• Prevent recurrence– Time frame will depend on seriousness of theissue and what resources are required to fix
  64. 64. Audit ReportingAudit Reporting
  65. 65. Audit Report• Summary of findings– Compliance with procedures– Compliance of other relevant support programs– Observations during the audit– Areas of improvement• Attach CARs• Include the completed checklist– Shows that the audit has been thorough
  66. 66. ANY QUESTIONS ?
  67. 67. For more informationA recording of this webinar will beavailable on your MyTutor portal• Visit• Call 1300 727 444• Email training@saiglobal.comThank you for attending