Restructuring an Internal Auditing Program


Q: For the last 15 years, my company has employed a small cadre of full-time, dedicated safety management system auditors.

A current proposal in our company is to recast those auditors as HES Superintendents under the supervision of an operations or safety manager who has significant management responsibility within the safety management system.  This change will give HES Superintendents (persons performing audits) additional, non-audit tasks for performance on the premises of the auditee immediately before, during or after the audits.  Those non-audit tasks could include workforce training, management mentoring and evaluation, facility inspection, etc. In addition, this change will reduce about 50% of the number of audits performed per person in a given time period.

My concerns are as follows:

•  Supervision of the HES Superintendents (especially assignment, evaluation and compensation determination) by an operations manager, safety manager, or someone under their supervision, could constitute auditee control of the audit program, and a thwarting of the principle of auditor independence.

•  The addition of non-audit tasks to auditors’ work seems to open possibilities for audit conflicts of interest. Since HES Superintendents will participate materially in the ongoing safety management of the company, their independence and impartiality as safety management system auditors would be subject to question.

•  The 50% reduction in number of audits per auditor would result in dilution of auditors’ audit experience and therefore their expertise, leading to attenuation of the company’s capability to audit expertly.

In terms of the principles of management system auditing, are my concerns valid?

Do you know of other instances of this part-time-auditor approach being used in high-risk industries?

Any comment on the wisdom of this proposal?

Occasionally, mutiple experts offer their expertise and viewpoints to assist quality practicioners. Add your voice by commenting on posts!

Bill Aston’s take:

A: You’ve mentioned valid concerns that should be assessed by top management prior to restructuring their organization’s audit program.  As I understand your concerns, they include two primary items:

1.    To ensure that the restructure of the audit program continues to provide auditors with independence, objectivity and impartiality from the processes and process owners to be audited. 

2.    Potential result of a 50% reduction of the number of audits conducted per auditor diluting auditor experience and expertise. 

With regard to the first item, this is a matter that top management should thoroughly evaluate to ensure that the requirements of ISO 9001:2008 — Quality management systems — Requirements, clause 8.2.2b internal audit, continue to be met.  This clause requires that The selection of auditors and conduct of audits shall ensure objectivity and impartiality of the audit process.  Auditors shall not audit their own work.  

In addition, although the requirements in ISO 19011:2011– Guidelines for auditing management systems are not auditable requirements, section 3.1, Terms and Definitions, (note 1), does mention the need for ensuring internal auditor independence.

The key point is that your organization’s registrar will most likely look very closely at how the audit program has been restructured to ensure that auditor independence, objectivity and impartiality have been maintained.

Regarding item number two, although maintaining an auditor’s level of expertise and experience are important, the primary purpose of internal audits is to assess the effectiveness and continual improvement of the quality management system and its processes.  If maintaining auditor expertise and experience becomes an issue due to the reduction in the number of available audit assignments, management should consider adjusting the number of auditors needed to meet the actual workload. 

As you’re aware, ISO 9001:2008 requires internal audits to be conducted at planned intervals, but it does not prescribe any frequency for performing audits.  So this area is strictly a decision that must be made by each organization to meet their own specific requirements to ensure the continual improvement of the quality management system (QMS).

In summary, ISO 9001:2008, clause 5.4.2b Quality management system planning, requires top management to ensure that the integrity of the quality management system is maintained when changes are planned and implemented.  This includes the restructuring of processes such as the audit program.  Internal audits are one of the most important tools that an organization has to assess the effectiveness and continual improvement of their quality management system.   Therefore, it’s essential that the personnel performing these audits are trained, experienced and independent of the area being audited. 

It has been my experience that there are few organizations that maintain a staff of fulltime QMS auditors.  Most organizations utilize staff personnel who are familiar with the processes to be audited and have been trained and are experienced as auditors.  Although they perform audits, this is usually not their only responsibility.  However, in some cases, large organizations may have one or two fulltime auditors who function corporate-wide and are supported by trained and experienced staff personnel on an as needed basis.       

I hope this helps.

Bill Aston
ASQ Senior Member
Managing Director of Aston Technical Consulting Services
Kingwood, TX
www.astontechconsult.com

Thea Dunmire’s take:

A: Given that this question involves audits of a safety management system rather than a quality management system, the more applicable standard would likely be OHSAS 18001:2007 Occupational health and safety management systems – not ISO 9001:2008.  However, OHSAS 18001 also specifically states – “Selection of auditors and conduct of audits shall ensure objectivity and the impartiality of the audit process.”  Although OHSAS 18001 does not include the statement – “Auditors should not audit their own work,” that is definitely true.   As a general rule, auditors should not audit activities for which they are responsible or accountable. 

It is common for organizations to utilize individuals as internal auditors who have other staff responsibilities.  Few organizations have dedicated environmental, health and safety management system auditors.  Most internal environmental health and safety (EHS) auditors have other responsibilities.  In addition, based on surveys conducted by the Auditing Roundtable, the overall management of the EHS audit program is often located within the EHS department, not in a separate internal audit function.  This can make ensuring the independence of the EHS audit program very challenging.

The important question isn’t whether specific individuals are auditing full or part time. Instead, it is whether all of the auditors utilized within the audit program have the appropriate independence, competence and resources to conduct the audits they have been assigned.  Independence I have discussed above.  By competence, I mean the general knowledge and skills needed for management system auditing (as set out in clause 7.2.3 Possess appropriate knowledge and skills of ISO 19011) as well as technical expertise appropriate for their audit assignments.  By resources, I mean that there is sufficient support, including adequate time, to conduct the individual audits needed to meet the objectives established for the audit program. 

Identifying the resources needed for the audit program is one of the key responsibilities of the person assigned the role of audit program manager (as set out in clauses 5.3.1 Perform audit program management tasks and 5.3.6 Identify program resource requirements  of ISO 19011:2011).  Lack of adequate resources is a common weakness of many internal audit programs.  Often, internal audit programs have very broad and expansively-stated objectives, but lack the resources needed to achieve these objectives.  It is the audit program manager’s responsibility to point out this disparity to top management.  The solution is for top management to either adjust the objectives of the audit program, taking into account the policy commitments made by the organization, or provide more resources for the internal audit program.

A key requirement of a safety management system is identifying the organization’s legal and other requirements to which it subscribes.   These identified requirements must be taken into account when establishing management system programs and procedures.  This includes any legal obligations associated with establishing and maintaining internal audit programs.  For example, for organizations subject to the BOEMRE regulations (offshore oil and gas), the Safety Environmental Management System  (SEMS) regulations require that auditors be qualified and independent (see 30 CFR 250.1926).  Legal requirements, as well as the commitments made by the organization in its occupational health and safety policy (or its sustainability reports), must also be taken into account when identifying the resources needed for the EHS audit program.

Internal audits are one of the important ways of assessing the effectiveness of a management system.  The audit program itself should be reviewed to determine its effectiveness in accomplishing this task.  Changes can, and should, be made to internal audit programs but the potential impacts of proposed changes need to be fully assessed in light of the organization’s policy commitments and its legal obligations.

Here is a link to the Auditing Roundtable survey results I mentioned: AR Member Survey Results – Organizational Location of the EHS Audit Program

Thea Dunmire, JD, CIH, CSP
ENLAR Compliance Services, Inc.
http://www.enlar.com/
Largo, FL

Jim Werner’s take:

A: This is indeed a unique question.  I read and re-read this question over and over, and I have come up with the same opinion – “it depends.”  I am assuming “audit” is referring to an independent review of the quality system.  Some places use the term “audit” to mean an inspection activity.  If the past audits have consistently demonstrated the effectiveness of the quality system, then it is appropriate to reduce the number and frequency of the audits.

As far as the re-organization of the staffing of the auditing function – this is a management decision.

Jim Werner
Voting member to the U.S. TAG to ISO TC 176
Medical Device Quality Compliance (MDQC), LLC.
ASQ Senior Member
ASQ CQE, CQA, RABQSA Lead QMS Assessor

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2 Responses to Restructuring an Internal Auditing Program

  1. Great question; this proposal is probably done (or considered) very often; it needs to be discussed more. However, the problem is probably with the “solution” AND the underlying problem AND the rationale of how management arrived at this solution.
    THESE 3 QUESTIONS: The reporting relationship to Operations has always been problematic for auditors. You don’t get the same degree of support, and, inevitably, auditors will be put into the position of auditing their own work. Oops – that’s not an “audit.” I see less problem with auditors doing non-audit tasks; auditors are often enlisted to help with corrective action tasks. They can do this, but then they can’t audit that work next time around. Auditors can maintain great auditing skills by “only” auditing half-time. Another piece of the puzzle seems to be that only half the number of audits will be done – why is this?
    WHY THIS “SOLUTION”?: As HES auditing programs mature, the number and severity of findings may decline. Management systems kick in, IT systems hard-wire many elements of HES compliance, and Company Management is more confident in positive outcomes. The need for auditing may decrease. However, there can be new/ emerging issues that call for auditing expertise. Auditors may need to get out of their comfort zone and address other matters: readiness for carbon emissions trading? Impact of Dodd-Frank Conflict Mineral? Demands by customers or shareholders? Toll manufacturers? The decision to move auditors organizationally, repurpose half of their time, and cut half of their audits is a reactive response to the need to cut expenses. But at what cost?
    CONSIDER A QAR: IIA’s International Professional Practices Framework (IPPF, or “the red book”) Section 1312 requires that “external assessments must be conducted at least once every five years by a qualified, independent reviewer or review team.” This Quality Assessment Review (QAR) can objectively evaluate the organization’s needs, risks, and current program. The QAR process is standard fare for Management and the Board for Internal Audit – why shouldn’t HES Auditing warrant the same degree of attention? One benefit of a QAR would be that, if these objections are valid, it will convey them in terms Management deals with every day. Another benefit of a QAR is that it may identify other reasons to squelch this proposal. A seasoned external evaluator can identify the broader issues and offer other suggestions that would work better for everyone involved.

  2. Christopher Allen, CSP, CPEA says:

    I also agree that it depends. I spent 20+ years in an audit role and now I am responsible for all aspects of the EH&S program. The philisophical debate about auditors independence is valid and for an ISO model program critical. However, if compliance with ISO is not a critical success factor, then you should ask what is?
    If the desire of the reorganization is to enhance the overall performance of the organization’s EH&S program, then in my opinion, the questions to ask are:
    How effective has past audits been in helping achieve the overall program goal
    When audits identify gaps, are those gaps best handled by a consultant type person (auditor) or the business (EH&S staff)?
    If the audit performance has been effective, why break what is broken? If not, then a reorg is one way to increase the effectiveness of the overall program goal. If the audits are not identifying critical issues and the resource need mostly exists for staff to close gaps, then a reorg could be beneficial.
    If the gaps identified require the business staff to close, then making this reorg will eventually lead to these staff members being ingrained into the business and most objectivity will be lost. EH&S staff who are imbedded in the business must build relationships and as such will lose their ability to call out unpopular issues. This would be a problem if the reduction in audits and audit effectiveness results in more unidentified critical issues.

    My 2 cents!

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