The Magazine for Underwater Professionals

Nov/Dec 2019

AUDITING

Auditing - what's it all about?

A well-carried out audit will put an organisation in a much better position when tendering for projects, writes KBA's Darren Brunton

Darren Brunton, managing director of Singapore-based KB Associates (KBA)

Around 18 years ago, when carrying out one of the first air diving system audits, the challenge was the statement, “WHY! We have always been doing it like this? Even you as a diver did? So now why the change”. The example was related to the requirement for two power sources for the launch and recovery winches (they only had one hydraulic power supply and one electric supply).


Fast forward to 2019 and we still hear the same mindset comment, although fortunately not very often. What we hear now however are instructions for more than what is outlined in the agreed audit requirement. Some have termed this as ‘Gold Plating’, ‘Client Requirement’ or ‘Individual Interpretation’.


Auditing is carried out for several reasons, which include: company safety management system requirements; to ensure suitable and safe systems of work and equipment; contractual requirements; and accreditation for industry or association compliance.


There are many aspects and areas that can be audited, including safety management systems, operational compliance, accounting, equipment, food hygiene, medical facilities, lifting and rigging, marine vessels, diving and ROV systems and operational processes; in fact, it is possible to ‘audit’ anything and anyone.


The consequences of the audit will vary. If an accountancy audit is conducted and inconsistencies are identified, there may be legal consequences with regards to the level of inconsistencies identified, i.e., tax evasion, fraud, etc.

 

LEAD
If a safety management system or equipment audit is conducted and identifies non-conformances (NCs) against the standard being used for the audit, the consequence, if the NCs or lessons learned are not addressed, is that potential incidents (personal injury, equipment/environmental damage) may occur which in turn could lead to legal repercussions (breech of the Health and Safety Regulations; and civil claims for injury of damage), incurring high costs. Additionally, such non-conformances may lead to a breach of contractual requirements and subsequent operational delays will incur costly management of change requirements and damage to business and reputation.


Such consequences have potentially high costs, often far exceeding the cost of a planned and structured system of work which when subjected to a thorough audit could in most cases identify and allow potential system failures to be proactively addressed or at the very least limit the effects substantially.


The old phrases, “You think an audit is expensive; wait until your project is delayed due to non-compliance with contractual requirements”, and “You think an audit is expensive; wait until you experience the cost of an incident”, come to mind.


The audit is not and should not be ‘the be all and end all’ of identifying, managing and controlling the systems being audited. Auditing needs to be considered as a proactive activity and as one of several ‘safety management tools’ that is used by an organisation to check and validate suitable systems are in place or identify areas of improvement needed.


In previous articles, KBA has written about the Return on Investment (ROI) with regards to training and competence development. Those companies and individuals who attend training courses as a means of upgrading both the organisation’s and the individual’s competencies stay current. The investment is proven to be a gain, rather than those who just sit ‘on the fence’ waiting for something to happen and subsequently suffer the consequences of non-action.

 

GAIN
ROI from auditing is much the same, however it is a safety tool that needs to be implemented correctly to gain the full potential of the ROI.


There are many international standards organisations (ISO), industry associations and other auditing processes available. Having a checklist is one thing, but it goes beyond that, by understanding the requirements of the checklist and the scope of the audit process.


Gaining full ROI on an audit requires several functions, each support one another and if one fails, it will impact others and likely to incur additional costs and a longer period to gain ROI. A successful audit will consist of:

  • Planning – ensuring suitable time and resources are allocated for the full duration of the audit.
  • Preparation – ensuring all documentation, equipment and personnel are available.
  • Competency – ensuring that the auditor has the right level of competence.
  • Independence and Integrity – ensuring the auditor/audit team are suitably independent and hold values and ethos that will measure the success by emulating the requirements to enhance the outcome of the audit results.

It is always easy to criticise the systems, equipment, procedures and processes. The skill of a good auditor is to identify the faults and areas for improvement (not criticisms). This allows solutions to be established that enhance the systems, equipment, procedures and processes. While equipment owners need to be progressive, the auditors also have a duty to be proactive and in this way should work with all parties to ensure efficiency, using experience gained to improve systems rather than be a destructive value.


Once it has been identified internally or by a client that an audit (SMS, equipment, process) is required; the first thing to ensure is that the requirement and ‘terms of reference’ are clear and agreed. The terms of reference needs to be outlined and should detail the full scope of the audit.


Audits do not provide ROI due to several contributing factors. Over the years many observations have been made and where industries and organisations have learnt from some of them, they are often still present in today’s ‘auditing world’.

 

DESTROY
Having unclear or no terms of reference is one of the key factors that an audit process is destructive in scope and used to destroy the organisation rather than be a ‘tool’ to enhance the organisation. An audit performed without a ‘terms of reference’ is not an audit, not a health check and not a safety tool, but rather a personal implementation of incoherent thoughts designed to fail any system. Some of the other key contributing factors that reduce auditing ROI are:

  • Not scheduling or planning suitably and inviting the audit team in to start before the systems, equipment, documentation are ready (and in some cases not even available).
  • Not allowing suitable time to complete the audit.
  • Not preparing the audit requirements (often the audit ‘checklist’ and scope is known well in advance and yet nothing is prepared when the audit team arrive).
  • The organisation being audited is ‘in defensive mode’ and not being open for areas of improvement.
  • The auditor having a mindset of ‘it’s my way or no way’, leading to the audit working outside the terms of reference and audit scope.
  • The auditor interprets the audit checklist and requirements incorrectly based on their experience and not on the written requirement.
  • The auditor issues non-conformances for ‘nice to haves’ or what he/she believes should be present when it is not on the agreed audit requirement.
  • The auditor does not know how to communicate in a constructive and effective manner to enable ‘buy in’ to the findings and the corrective actions agreed to enhance the systems and processes.
  • The auditor has a preconceived negative perception of the audit result before commencing – this leads to confrontation and a destructive audit. At the same time the perception maybe of one of positivity due to friendships which then leads to findings not being identified in fear of breaching a relationship in some way.

Competence is a key factor with regards to an audit process. All too often, due to commercial factors, there is only one auditor (sole auditor) onsite. The competence of the auditor must be relevant to the audit requirement. One of the key acknowledgments of competence of an individual is when they recognise that they don’t have sufficient knowledge or have suitable experience for the area required.

 

PROCESS
The auditor should always be supported by a related competent person offsite, enabling the audit process to be supported by the broad range of expertise and competence as a team. Auditors should also be members of professional bodies such as the International Registry of Certified Auditors (IRCA); and other professional bodies. To stay current for audits relating to the International Marine Contractors Association (IMCA), they need to have access to all the IMCA documentation and this can only be achieved if they work for or are a company which is a member of IMCA.


Being an auditor and conducting audits requires many skill sets, including, but not limited to: professionalism; integrity; competence; confidence; being fair but firm (a level of pragmatism); a good communicator both verbal and nonverbal (body language); being able to accept criticism and become better for it; always looking to upskill and remain current in the area of expertise; accept that they may well be a ‘subject matter expert’ and knowledgeable but that they do not know everything and learning from others is key to personal success and success of the organisation.


Carrying out audits in a planned, structured manner with competent auditors who are supported by a competent support network will provide your company and operations with mid-term and long-term ROI. Establishing such proactive safety management controls as a regular auditing framework will make projects safer, more efficient, save time and money by removing the reactive auditing process commonly used today, and will set the organisation in a better position when tendering for projects.

 

 

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