What is a Compliance Audit and Who Needs One?

By Jonathan Brun,

August 24th, 2015 – Corporate executives have a lot on their mind, but one of the top sources of stress is business risk. Managing legal compliance and quality control issues across complex operations is risky business and with growing numbers of fines being levied, business leaders must put in place robust systems to avoid issues that will impact the bottom line.

Companies to face a continual uphill battle in the area of environmental, quality, health and safety compliance in one department or other. Sometimes the production setup itself is amiss, and faulty equipment is a key source of trouble. In other companies, the safety culture may be what is lacking: employees may not be following prescribed methods for preventing hazards on the job due to a lack of motivation or effective reminders about the importance of compliance.

One of our clients was recently audited by their Japanese headquarters. Though the American plant thought they had an amazing safety record, the Japanese office found a number of areas requiring improvement. Despite perception, the answer to “What is a compliance audit?” is simply “an inspection that can clearly demonstrate compliance to all requirements on an ongoing basis”.

One solution for minimizing the risk of noncompliance and the stress of not knowing how the company stands in that area is to schedule regular internal compliance audits. The compliance audit is a process that simply works through a checklist, commonly called an EHS protocol, and allows a company to assess its performance in advance of an official government inspection.

Nimonik recently conducted a LinkedIn poll of EHS specialists and found that though most have audit schedules in place, many still see room for improvement. Here are some of the survey results:

Management teams often cringe at the thought of performing audits because it can involve costly experienced auditors who may issue a large report with a number of follow-up tasks.  A typical EHS environmental, safety or quality compliance audit at a manufacturing plant, signed off by an external auditor, will run $7500.

An internal audit, done by staff, will often consume 2 weeks of person hours. Many companies don’t know how to begin performing their own internal inspections and will attempt to outsource. However, without internal resources to handle the report from the auditor, the impact on the operations can be limited and short-lived.

Nimonik offers both EHS and Quality audit protocols along with clear recommendations to get you started. We can help you plan your internal audit cycle and external compliance audit needs. With our auditing apps for mobile devices, the costs involved with  compliance will be reduced significantly.

With our up-to-date lists of EHS protocols from over 65 countries worldwide and use of the latest mobile technology, auditing has never been easier. What’s more, when the process is done regularly, it can save the company a small fortune in fines and legal processing.

Let’s take a look at one possible audit scenario using a Nimonik compliance auditing app in the food production industry. Food production standards demand regular inspections for quality, safety, hygiene and environmental  issues. Companies like Grupo Bimbo Bakery (the largest bread producer in the world) rely on Nimonik tools such as the Risk Assessment for Food Preparation, Cooking and Service to work through a checklist of possible problem areas.

They will complement this with a local EHS audit protocol from our database and plant specific requirements, depending on where the plant in question is located. Over time, our clients customize our audit checklists and build their own, ensuring the checklist covers their operations from head to toe. Just a few of the many categories and checklist items offered for consideration are:

Slips and Trips 

– Doorways (rain), spillages, uneven surfaces — Kitchen equipment is well maintained and any leaks are promptly reported.

– Doorways (rain), spillages, uneven surfaces — Drainage channels and drip trays are provided where spills are likely.

Manual Handling

– Lifting and moving heavy objects or objects that are difficult to grasp — Appropriate equipment is available to move heavy items and staff are trained to use…

Contact with Heat

– Steam, hot water, hot oil and hot surfaces — Staff are trained in how to handle hot oils and how to safely use, empty and clean the fryers

– Steam, hot water, hot oil and hot surfaces — Water mixer taps are provided

The above are just a few of the many points to consider when conducting EHS inspections or compliance audits in the food production industry. The workflow is similar in most industrial and manufacturing industries. Nimonik provides comparable audit protocols for other industries (such as mining, environment and manufacturing) as well.

For a complete sampling of our auditing tools, products, and tips on setting up an audit cycle, visit us on the web and start your free, 45-day trial account, or give us a call today at 1-888-608-7511.