Unannounced Audits

‘Is there anybody there?’ said the Traveller, Knocking on the moonlit door’

The opening line of Walter De La Mare’s The Listeners captures perfectly the feeling I regularly got when as an auditor a number of years ago I was required to conduct unannounced audits on suppliers for a large food retailer. More on this in a moment… but in general, it was an interesting experience. Years before anyone even considered conducting audits on their suppliers without a prior appointment, this retailer had a policy of sending in the auditor at random times, without notice to see the actual conditions under which their products were produced.

The magic of unannounced audits

It was radical, it was disruptive and above all it was effective! As an auditor I learned more about the management of food safety in those years. I quickly understood that audits when unannounced, changed the nature of second and third party audit engagements, changed the direct relationship between parties and undoubtedly changed audit outcomes.

More recently we have seen the BRC provide an option for companies to opt in to unannounced certification audits while a large European food retailer has informed suppliers that all future audits will be unannounced. More and more we are seeing what many of us believe is the unstoppable move towards unannounced audits becoming the norm. The practical impacts of this remain an open question and are worth considering. Before we do this, let’s first take a look at why we are seeing this shift towards unannounced audits.

For years I have listened to the debate on this and the agreements for and against announcing audits in advance. Both camps made compelling arguments and I was often swayed by both. But as is usually the case with issues debated in the realms of principles and opinions – reality comes along and cuts across our passionate beliefs.

Recent food scandals and auditing

For this debate it was undoubtedly the Horse Meat Scandal and other recent international food safety issues. Regardless of our position on unannounced audits the meat scandal in particular highlighted weaknesses in the second and third party audit framework. Some of the plants at the center of the contamination issue were BRC certified and approved directly by large food retailers. Despite auditors regularly inspecting, visiting and certifying these operations the scandal was not detected or prevented.

Now let’s be clear. This is not to say that these plants were intentionally hiding anything or auditors ignoring evidence of fraud – they weren’t but that did not prevent national and international media questioning the effectiveness of certification schemes like BRC or retailer technical approval of suppliers. In short it damaged the credibility and concept of auditing as a food safety and quality management tool. They may have been somewhat separate issues but in the consciousness of the media and public they were closely linked. And for me the reason was simple! It was assumed that audits were an objective assessment of the conditions and controls in place at a specific moment of time i.e. day of the audit.

The public would be surprised to learn that the vast majority of these audits are in fact scheduled and announced in advance. For most people, professional or public, this undermines the validity and objectivity of audits and may produce an audit outcome not necessarily representative of actual conditions. Credibility is undermined. The horse meat scandal raised fundamental questions and the shift towards unannounced audits may represent one of the answers.

Challenges of unannounced audits

What about the impacts on suppliers? Let me take you back to Walter De La Mare’s The Listeners. One of the surprising impacts of unannounced audits was the company’s reaction when I presented at the door. I would estimate that in 25% of cases I was refused entry to the site. It wasn’t long before I felt very much the Lonely Travellerseeking the Phantom Listeners behind the door of the food plant. But such was the reluctance to grant me access to conduct the audit that one could only speculate why a food business would risk its relationship with a significant customer? There were penalties for refusing access. Nonetheless it happened regularly.

My own belief was that it was preferable to suffer the reaction from the retail buyer rather than have the actual conditions of the plant audited on that day. This would be the more cynical of my thoughts but it was undoubtedly the case. In other situations the Quality Manager was not present on site and without prior notification of my arrival that would be a legitimate reason. Another auditor from another retailer may have been on site already conducting an audit or production lines were not operating for maintenance.

Here we can see the practical impacts on both the company and the auditor in attempting to run an audit program without prior arrangements. Other impacts include an almost certain reduction in audit performance and outcome – at least for a period of time while companies adjust to the new regime. This may lead to more suppliers failing and being delisted causing buyers untold headaches in meeting consumer needs. On the upside (at least as far as certification bodies are concerned) more failed audits mean more re-audits which means more revenues. These are just some of the impacts and there are more. The most important question however is the benefit or otherwise of unannounced audits.

A strange kind of logic

I once put the question to a senior retailer technical auditor why were all audits not unannounced? The response was that if a company could not get its act together for an announced audit then it would be clear they were not capable of supplying safe food. This may be true but for me it was a little strange in terms of logic. It assumed a direct relationship between the company’s ability to prepare for a one day visit and the conditions of production the other 364 days of the year. Would an unannounced audit not do the same thing but also show you the actual conditions typical every day? And so the argument went on…

It’s just the right thing to do

My experience as the Lonely Traveller taught me that unannounced audits were infinitely more potent than announced. I know this because I have performed both types of audit on the same food plant and the differences were stark. If the objective of an audit is to determine the level of compliance at a moment in time then we must as a global industry embrace this new move towards unannounced audits. A tool which provides a true reflection of where we are is powerful in maintaining standards and driving improvement – something every food business wants.

The food business has a lot to do in the day and sometimes things are not always perfect. The auditor must also recognize this and not allow unannounced audits to become a hard cynical tool to catch companies out. Common sense and intelligent assessment of risk must underpin the unannounced audit. This will avoid a game of cat and mouse emerging and destroying the positive relationship between parties.