What Is the National Audit Tool?

Self Insurance is a risk management method where businesses that meet certain criteria can put aside funds for potential insurance claims instead of paying out premiums to a third party insurer. There are several requirements with self insurance, and in order to make sure that things run smoothly and fairly for both workplaces and employees, it is a heavily regulated way of doing things. Part of these regulations is the National Audit Tool or NAT, a program that has been developed in order to test the efficiency of OHS practices across Australia in self-insured businesses. It requires consistency and harmonisation, and ensures that all self-insurers meet the high standards of workplace health and safety dictated by the Australian government.

Auditable and Informative Criteria

The NAT provides information for self insurers about the type of criteria they are required to meet in regards to their self-insurance and OHS practices. It also provides them with details of what they will be assessed on. In addition to this, the NAT provides auditors with an auditing criteria to ensure that all businesses are tested against the same structure.

Not an Auditing System

It is important to note that while the NAT outlays criteria for auditing, it is not in itself an inspection tool for the workplace.

1st Element

The first element of the NAT outlines the areas of health and safety in the workforce that need to be addressed and operational functions that need to be committed to. These can include risk management, the distribution of the appropriate health and safety information and education of people in the workforce among other things.

2nd Element

The second element related to the planning section, which provides very useful and very detailed information about how practices relate to organisations. It explains regulations as they apply to organisations and can be used as a starting point for the implementation of certain programs.

3rd Element

This concerns itself with the implementation of OHS procedures and protocols and provides reference points for self insurers to approach their own audits.

4th Element

The fourth element concerns evaluation and measurement, and is a vital section for monitoring progress and compliance with regulations. It allows organisations to measure themselves to a generic benchmark, although obviously safety management specifics will vary between organisations depending on their situations.

5th Element

Management review makes up the 5th element of the NAT, and pertains specifically to the responsibilities and performance of upper management in implementing safety management and OHS protocols throughout the organisation. It also provides opportunities for agreements to be made and programs to be built upon based on the outcomes of the review.

By the way, do you want to learn more about Workplace Safety? If so, I suggest you check Self Insurance and Safety Management Consulting.

Overview of the National Audit Tool (NAT)

The National Audit Tool (NAT) has been developed in conjunction with federal and state statutory regulator representatives to provide consistency and harmonisation for OHS requirements relating to Australian self insurers across multiple jurisdictions.

The NAT defines auditable criteria (with supporting information) to be used by state regulators in conducting audits of self insured organisations.

Overview

The NAT provides informative criteria for self insurers in addition to the auditable criteria used for verification activities. This information relates to the application of the NAT in a broader context and provides detail with regard to the following subject areas:



Auditing Occupational Health and Safety Management Systems by Regulators: This is a "How To" approach to these important audits, explaining the methods and objectives of the NAT.

Audits, inspections and legislative compliance: Critically, it also explains that the NAT is not itself a workplace inspection system,.

Auditors: The NAT sets out the operational context of auditors roles, and cites The AS/NZS ISO 19011- Guidelines for quality and/or environmental management systems auditing as the audit standard.

Self-audit programs: The NAT sets out a practical framework for self insurers to create and conduct effective internal audits, including:


Establishing an audit team
Defining audit roles
Setting up a reliable reporting and documentation system
Creating an effective oversight mechanism which will enable proper assessment of conformance with regulatory requirements
The User Guide and Workbook are designed to provide regulators and self insurers with operational benchmarks and common references.

OHS Management Systems approach

The NAT, by its nature, requires that an OHS Management Systems approach is adopted by self insurers to meet the NAT's auditable criteria. The NAT relates to operational principles, rather than setting out pro forma, specific requirements for auditable criteria. OHS management requirements for individual businesses can vary widely, and each organisation must create its own version of these audit processes, in relation to its circumstances.

The NAT is comprised of five key "Elements" with sub element components where more specific auditable criteria relate to a subject area. The identified elements are consistent with best practice contemporary management system structures and include the following:

Element 1: Health and safety policy

This element usefully defines the critically important areas of health and safety management and operational functions to which the organisation must commit itself.

These areas effectively create a comprehensive policy base, including:


Risk management
Health and safety legislation
Objectives improving injury and illness prevention
Health and safety training
Inclusive employee consultation
Dissemination of health and safety information to all people in the workplace
Effective implementation of organisational health and safety policies
It will be seen that each of these policy areas integrates into full coverage of essential OHS management practices. The idea is to create a fully functional, "customized" health and safety policy for organizations to manage themselves.

(NAT auditable criteria also include administrative arrangements in relation to access and maintenance of the Health and safety policy. )

Element 2: Planning

The Planning element includes very useful information and a good description of absolutely essential aspects of OHS management operations which must be addressed to ensure good practice. It relates directly to addressing legislative requirements that apply to an organisation systemically, identifying the tools used to achieve corporate objectives and targets through health and safety management plans.

Element 3: Implementation

Element 3 is an excellent example of how the audit process operates and targets key areas of functionality. It provide good reference points for self insurers to approach their own audits meaningfully and with due attention to the vitally important areas of policy and planning.

Implementation defines auditable criteria relating to:


People (resources, responsibility, accountability, consultation)
Administration (documentation, data control and operation)
Programs, tasks and activities in the workplace including risk management, risk prevention and mitigation, dealing with emergencies (e.g. Contractor selection, design control, workplace facilities etc).
Knowledge base (includes recruitment and contractors)
Training and verification of both competency and understanding of training (critically important for operations)
Communications, notification processes, consulting with staff and reporting (covers the entire implementation area to ensure effective operation at all levels)
Specific workplace needs and operational procedures
Risk management and risk elimination including public safety, hazard handling, identification, high risk permits and risk control plans
Maintenance, faulty plant and equipment and repair issues
Product risk controls and tracking
Emergency operations and response, critical incident management
Element 4: Measurement and Evaluation

This section of the NAT is a virtual map of references to management operations in relation to health and safety management. Measurement and evaluation relates to methods used to evaluate and verify workplace programs, tasks and activities continue to meet organisational needs. Provision is also made including:


Verification activities (including various types of inspections and audits)
Incident investigation (including causal analysis)
Dealing with corrective and preventative action
Records management (used to provide evidence and a mechanism for evaluation of content)
Legal issue management and conformance issues
Management of audits
Direct management interaction with the audit process
Element 5: Management Review

This element defines the role of senior management reviewing the performance of the organisation in meeting its legislative requirements organisational commitments. It also provides a requirement for actions to be developed to address improvements opportunities that have been identified as a result of this review.

Criteria application

The NAT itself defines structured auditable criteria for use by the relevant state regulator and those that participate in programs where compliance is required.

The NAT also provides criteria and useful information relating to the auditable requirement, to allow broader understanding of the scope of application to which the criteria relates. It effectively spells out the audit issues and functional requirements for self insurers.

Additional information contained within the NAT includes examples intended to be used only as guidance to assist in understanding some typical questions or evidence that may be used in the verification process.

Common Problems

Understanding and interpretation of auditable criteria appears to be a common issue where non-conformance is identified. Converting auditable criteria into a process requires an understanding of the application

of OHS requirements in a practical context.

The most important function of the NAT Elements is to clearly describe a broad approach and identify critical principles involved in health and safety management. The NAT Elements are a good basic guide to OHS management issues, andalthough these issues have to be applied to specifically to organisations on a needs basis, the NAT provides a clear indication of structure and the basis of audit criteria.

NOTE:Conformance to the audit criteria alone does not assure compliance with all statutory obligations nor does it preclude any action by a regulatory body.

That's a quote from the NAT preface materials. It's strongly advised to seek professional guidance regarding these obligations to ensure all areas of liability are properly covered.

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

Self Insurers - What a National Self-Insurer OHS Audit Tool Won't Tell You

To define the audit requirements of self insured organisations at all levels, it's necessary to detail the basic formats involved:

OHS management system audits are conducted by regulators to determine the OHS performance capacity of an existing self insurer.
Applicants for a new self-insurer licence are also assessed on their conformance with requirements of the National Self-Insurer OHS Audit Tool (NAT).

It should be noted that the NAT is not an OHS management system.

The structure and supporting criteria contained within the NAT are simply benchmarks determining whether an organisation has an appropriately structured OHS management system.

Put simply the NAT defines the criteria that a State Regulator will use to assess OHS Management Systems of Self-Insurers.

The actual statutory audit is conducted by the regulator's auditors.

To provide some clarity on the context in which an audit is being undertaken, the licensing area is normally a client of the regulator auditors. This means that the audit activity results are essentially been gathered for the licensing and not specifically for the self-insured organisation.

The audit itself is a compliance-style audit conducted by the regulator auditors using defined auditable criteria selected for each audit. This is a far more formal and potentially complex process than the NAT audit tool implies.

Sampling methodology

The regulator uses a sampling methodology approach for an OHS Management System audit for existing self-insurers or new self insurer applicants. The regulator's auditors use a strategic, very practical approach to assessment, based on the operational needs of the organisation's license.

Important: It must be remembered that:

The regulator is obliged to deal with statutory compliance issues on a strictly formal basis.
Regulators have no "margin for error" in this area, and auditors must note any issues which arise from non-compliance.
Non-compliant OHS management systems are definitely not best practice, and can result in loss of the self insurer's license.

The sampling methodology approach is based on measurable factors:

Annual returns information;
Regulatory notices issued by the regulator to the self-insurer;
Prosecution database information;
General inspectorial activity;
Information gathered during the meeting prior to audit.

Audit procedures

The audit process results in a series of administrative outcomes:

Auditors compile a final NAT report for the licensing area.
Auditors also provide a local verification-based audit report created during the course of the audit.
Renewal and granting of licenses are based on these reports and related recommendations.

In the event of non-compliance a different series of procedures occurs:

Where non-conformance is identified, the regulator auditors are responsible for a compliance follow up program
Self insurers are notified to address and remedy issues raised.
Auditors ensure that the remedial works have been completed within timeframes that have been defined by the self-insured organisation.
The licensing area renews or grants the license.

Important: Failure to comply with the licencing requirements may result in serious issues regarding an organisations continuation as a self-insurer.

Organisational action

It must be clearly understood that all statutory compliance issues in relation to self insurance are based on strictly practical requirements. Compliance is assessed on the basis of the workplace realities of the organisation.

The NAT preface information states:

Conformance to the audit criteria alone does not assure compliance with all statutory obligations nor does it preclude any action by a regulatory body".

The local report provided to a self-insured organisation at the completion of the compliance audit activity provides information regarding conformance or non-conformance against the benchmark criteria used by the regulator.

This information is extremely useful. It can assist in a whole range of ways for developing an organisations' OHS management system. It's particularly effective, with regard to developing targeted OHS operational functions, training, incident management, implementation and assessment of risk potentials.

The fact remains that there shouldn't be any non-compliance issues. OHS statutes are the default best practice scenarios for workplace safety. These statutory requirements are anything but a "rubber stamp", and should be respected for their contribution to the serious issues of workplace safety.

OHS management system audits should be good enough to ensure that a self-insurer can effectively evaluate the procedures and processes within the workplace. There should be no loose ends, and no "mysteries" regarding any part of the OHS operational issues.

Common Problems

Examples of common problems in relation to the application of NAT audit outcomes are as follows:

Lack of comprehension of the importance of the NAT audit process and its value to self-insurers
A mistaken belief that the audit is a service provided by the regulator
A purely bureaucratic response to a perceived bureaucratic process
System requirements are developed to meet auditor criteria rather than organisational requirements;
Substituting regulator audit activity for a self-insured organisation audit activity;
The extremely dangerous, asking-for-trouble misconception that the regulator's audit can do the necessary work of a self-insurer's OHS management system
The incorrect belief that all statutory requirements have been satisfactorily met by a regulator audit outcome. This is the exact antithesis of NAT's own stated information.

The simple fact is that only a good, well-structured, well-managed, OHS system can ensure both full statutory compliance with all applicable laws and a safe workplace environment.

If you are in any doubt whatsoever regarding your statutory compliance, or have any operational issues with your OHS management systems, it is very strongly advised to seek professional guidance from professional safety management consulting services as soon as possible.

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