Statutory audit preparation is critical, particularly at the corporate level. It's essential to have a full-spectrum statutory audit function in place at all times. Self insured businesses require a complete information system based on formal compliance criteria.
Preliminary Meeting
The usual process for statutory audits involves a preliminary meeting between the regulator and the organisation to be audited.
The meeting creates a format and working context for the audit and defines key issues such as:
Providing a knowledge base for the audit program and explaining the compliance issues;
Defining the audit functions;
Identifying which areas of compliance and/or locations are to be audited;
Scheduling the audit - Managing time frames, setting dates and specifying the audit functions to be carried out;
Clarifying audit standards and required levels of information to be assessed.
This meeting is a briefing, and is best practice for regulators, ensuring that audit subjects are fully informed of the regulator's requirements.
Important: Senior managers should be present at this meeting if at all possible. If not, fully qualified senior level attendees must be substituted. Statutory audits can directly affect business operations, particularly business licensing. It is strongly advised that business management take advantage of this opportunity to ask questions and seek clarifications from regulators.
Planning Preparation
A structured, holistic preparation for the regulatory audit is essential. Each element subject to audit should be mapped, and a management program for preparation of information prepared accordingly. This approach also ensures there'll be no missing information or other embarrassments when the audit is conducted.
(Note: Fully compliant reporting systems produce information in the formats required by regulators. Other systems may require reworking, which needs to be scheduled on your preparation plan to ensure completion prior to audit.)
Preparation should be carefully time managed, to ensure full documentation is available for the audit. Scheduling completion should also allow time for management review and any further work to be done well before the audit date.
Planning implementation
The preparation program should be managed by a delegated, fully qualified person who is fully aware of the entire range of audit issues. The preferred person is an OHS professional, or local manager with current OHS training.
Delegations for preparation functions may be given to appropriate individuals with expertise in the specific audit functions.
Delegation specifically should not be given to any person who's in any way unsure or unfamiliar with the statutory issues, documentation and compliance requirements of the audit.
Planning stages:
Creation of a complete timetable for all audit subjects;
Defining the evidence and information requirements relevant to the audit;
Appointing participants in the audit preparation activity;
Creation of criteria to ensure preparations meets audit standards.
Audit information preparation
Quality controls on information provided to the audit must meet statutory obligations:
Information standards must fully satisfy the audit requirements.
The information should be acquired from documentation that has been prepared over a good representative timeframe.
Data must provide statutory indicators as required by law.
Audit site preparation
Areas subject to auditing must be assessed to ensure compliance with regulatory requirements. Supporting evidence should originate from sites to be audited.
Personnel preparation
Regulators use sampling methodology when conducting audit operations. A suitable number of qualified staff familiar with the issues at different levels within the organisation will be required to assist the regulators during the audit. Safety management consulting services can assist in organising staff to meet these needs.
Appropriate briefings should be conducted to provide:
A high level of knowledge of the audit subjects;
Good comprehension of the criteria to be audited;
Clarification of issues among the staff selected.
Facilitate the audit activity
It is extremely important that the preparation program actively assists in the audit process, providing good quality information for the regulator.
This approach provides:
Full management oversight of all areas subject to audit;
Direct benefits to the organisation, ensuring compliance at all levels.
Common Problems
It must be emphasised that the audit is a potential asset to the business.
Failure to meet audit requirements indicates the business self insurance licence is at risk.
Lack of direction and facilitation of the audit activity will also allow auditors to deviate from the scope of the audit activity to be conducted.
Lane Safety Systems offers safety consulting, risk management, compliance management and safety management systems for self-insured businesses across Australia. For more information, visit Self Insurance
