getting smart about compliance auditing - peter mills · getting smart about compliance auditing...

GETTING SMARTGETTING SMART ABOUT COMPLIANCE AUDITINGABOUT COMPLIANCE AUDITING

Self Insurers of South Australia (SISA) Presenter: Peter Mills( )Closing the Loop 201430th July’14

Chief Executive Officer Compliance Master International Pty Ltd

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VICTORIAN GOVERNMENT’S SMART‐METER PROGRAM

Smart Meters are t f Vi t i thsmarter for Victoria, the 

environment and you.

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SMART METER WARNING – CURRENT AFFAIR AUSTRALIA  24TH JAN 2013

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ROLLOUT RISK  CONTRACTOR / EMPLOYEE NON‐COMPLIANCE

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NEW RISK CONTROLS

T i i t• Training centre

• New work procedures

• New certification process

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MONITORING RISK CONTROL EFFECTIVENESS

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LAGGING V.S. LEADING CONTROL INDICATORS

PROACTIVE REACTIVE

RISK EVENT(Eg. Injury)( g. Injury)

Leading Indicators

LaggingIndicatorsIndicators Indicators

Eg: Eg: • Lost Time Injuries• Near Misses

• Compliance with work Instructions• Compliance with quality standards

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TYPICAL AUDITING METHODOLOGY

ProcessAudit Population (Items /Activities)

ProcessGroup Supplier

ImproveCorrectMitigate

l

Mitigate

SampleSample Size (Examples)Fixed Percentage = 5%

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Fixed Number = 200

SAMPLE SIZE MATTERS

ProcessAudit Population (Items /Activities)

ProcessGroup Supplier

ImproveCorrectMitigate Compliant

l

Mitigate p

Noncompliant

SampleSample Size (Examples)Fixed Percentage = 5%

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Fixed Number = 200

SAMPLE SIZE MATTERS

ProcessAudit Population (Items /Activities)

ProcessGroup Supplier

ImproveCorrectMitigate Compliant

l

Mitigate p

Noncompliant

SampleSample Size (Examples)Fixed Percentage = 5%

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Fixed Number = 200

STRIKING THE CORRECT BALANCE

Auditing BusinessAuditing Costs

BusinessRisks

• Sample Size

• Employee noncompliance

• Product• Frequency • Product noncompliance

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IDEAL AUDITING SYSTEMA diAudit

Sample Size

Auditing System

C li P fN li Ri kA dit P l ti

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Compliance PerformanceNoncompliance RiskAudit Population

ACCEPTANCE SAMPLING

Australia Britain  India France GermanyInternational USAAS 1199:1 BS 6001:1 IS 2500:1 NF06‐022

yDIN 40080ISO 2859.1 ANSI/ASQ Z1.4

Sampling procedures for inspection by attributes

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ACCEPTANCE SAMPLING (AS1199.1) SYSTEMA diAudit

Sample Size

Yes

NoAcceptance SamplingAudit Results

Outcome (Target Achieved?)

No

C li P fC li T tA dit P l ti

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Compliance PerformanceCompliance TargetAudit Population

E.g. 95%

ACCEPTANCE SAMPLING (AS1199.1) SYSTEMA di Normal = 80E gAudit

Sample Size

Normal = 80Excellent = 32

Poor = 100

E.g.

Yes

NoAcceptance SamplingAudit Results Outcome (Target Achieved?)

No

C li P fC li T tA dit P l ti

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Compliance PerformanceCompliance Target

E.g. 95% Normal Excellent PoorAudit Population

OBJECTIVE PERFORMANCE ASSESSMENT

Group “A” Group “B” Group “C”

Normal P f

Excellent P f

Poor P fPerformance Performance Performance

OBJECTIVE PERFORMANCE ASSESSMENT

Contractor “A” Contractor “B” Contractor “C”

PoorP f

Excellent P f

NormalP fPerformance Performance Performance

INTANGIBLE BENEFITS

• Employee morale

• Contractor performance

• Management assurance

• Regulator assurance• Regulator assurance 

• Customer service

• Company image

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‹#›

THE FUTURE OF COMPLIANCE AUDITING 

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