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Pundit’s Mailbag — Audit Disconnect

Jim Prevor’s Perishable Pundit, March 27, 2009

We have dealt lately with issues related to food safety auditing. In a piece about the AIB Audit of the Peanut Corporation of America, titled Lessons From The Peanut Salmonella Outbreak: Audit System Broken, we challenged the statement of the President of AIB telling Andrew Martin of The New York Times, “It would mean that we didn’t see it on the day we were there.” AIB’s President was speaking about the Peanut Corporation’s superior rating, which obviously must have been based on something other than food safety.

More broadly, we have been trying to be useful to our country by thinking of relationships between different kinds of audit-like bodies, particularly noting a relationship between food safety auditors, mortgage appraisers and those who rate Wall Street paper. We wrote a piece on this subject, and it was published in the Star Tribune, the big newspaper in Minneapolis/St. Paul, under the title, Who’s Guarding Our Commerce. As a result of some of this work, we received an important letter:

As you would expect, we (PrimusLabs.com) have been reading your recent comments on auditing closely.

We have a long-standing policy of trying to avoid commenting on our competitors so what I am about to offer applies to PrimusLabs.com and our efforts in the area of auditing.

Of course, there are examples of operations that simply audit so poorly that it is a simple exercise to describe the operation as unacceptable. But use of an audit, as simply a means providing yes or no with regards to the acceptability of an operation, is ignoring what most audits should accomplish in nearly all cases, identifying potential hazards.

Perhaps a more consistent expectation for an audit is that it provides an independent view of an operation, which if conducted properly identifies activities or lack of activities that increase the risk associated with certain potentially hazardous operations.

If we can agree on this, then the value delivered during virtually every audit exists in the auditees’ implementation of the corrective measures. The most consistent value provided by an audit should be reducing the potential or probability for an undesirable event. The use of an audit to provide a simple yes or no leaves a lot of value on the table.

So we are looking at three functions:

1. The auditor is identifying an action or lack of action that raises concern,

2. The auditee is acting on the observation,

3. And the buyer establishes a means of confirming that the supplier has implemented acceptable corrective measures.

The last step is referred to by many as completing the circle, an area that needs considerable work in the GAP (Good Agricultural Practices) but has reached considerable maturity in processing operations.

 

Despite the inherent conflict in payment (auditee paying for the audit), Primus’ auditors routinely deliver negative news to auditees (see accompanying chart here). On occasion that message is a failed score, but I think that the greater value is providing the service identified above.

At PrimusLabs.com we have set what we consider a reasonable goal and that is: to assist making a process “safer”. A claim to assist in making an operation “safe” would be an overstatement. This is data which is limited to facility audits (GMP) and does not include GAP.

— Robert F. Stovicek, PhD.
President
Primus Group
Santa Maria, California

 

We appreciate Bob’s letter very much, as we think it reveals a schism between what auditors provide and what the world looks to auditors to provide.

This is certainly no knock on Bob or Primus. We once ran a piece that detailed all the things that Primus offered — free of charge — to local growers who were looking to enhance their food safety practices. We were utterly amazed at how much Primus made available.

We have had many discussions with top people at Primus for many years; they are, without a doubt, serious in their work and serious about enhancing food safety.

Yet the disconnect between what Bob proposes an audit do and the way in which audits are actually used simply screams out.

As a matter of indisputable fact, Bob is correct. An audit’s prime contribution to food safety is its identification of problem areas. Yet, though true, we would also submit that this truth is not as relevant as it seems.

People can do self-audits or hire outsiders to audit and gain lots of useful information about areas for improvement. We can’t imagine anyone objecting to this idea and most would urge companies to do this, frequently, so as to identify problem areas and begin improvement programs.

The issue really comes to the use that companies make in publicizing audits and auditors. A simple Google search results in hundreds of references by companies to having a Primus Audit. Some say they have a Superior rating; some give a specific number saying that they scored 89% or some other number.

Now, clearly, one doesn’t publish this affiliation with Primus — or AIB or any other auditor — to publicize that one has a lot of problems and the problems have been identified by an audit. The implication clearly being given is that having an audit means that the company passed the audit in some form and thus people can deal with the company in total confidence.

Now, as Bob’s letter points out, this may not be true. But that marketing is done in this way is obvious and clear. So auditing organizations have to take responsibility for how they allow their name to be used.

In effect, auditing has become confused with certification and the auditing organizations have been lax at insisting the organizations differentiate. Here at the Pundit, almost every day, someone sends us a piece that points out they are audited by Primus, NSF Davis Fresh, AIB, SCS, etc.

Now we have considered these claims almost useless because these organizations audit and certify so many things that we don’t know from the claims if the companies are audited on pesticides, allergens, food safety or what. We also know that there is a range of scores and that, in many cases, there is no set pass or fail.

Yet it seems to us that Bob’s three-point test, could, at best, only work for the largest players of the industry. Wal-Mart, for instance, could insist a company gets a Primus Audit for food safety, get the results, insist an action plan is set up and then insist on a re-audit that shows the problems have been rectified.

But this is not what the produce industry wants or needs. What it needs is a quick way for a wholesaler on Hunts Point to make sure it is selling product that meets all modern food safety standards.

This is why the California Leafy Greens Marketing Agreement has been so well received. If a wholesaler wants to sell product meeting modern standards, all he has to do is make sure his suppliers are certified by the CLGMA, because CLGMA has a set of metrics, a designated inspector group and the group keeps coming back to inspect you until you meet the metrics.

We would suggest that all food safety auditors have in their contracts that there are three things they do, and these three things allow publicity on different levels:

1) An auditor can be hired for internal purposes to identify strengths and weaknesses. This cannot be promoted at all. It is a service that does not include publicity rights.

2) An auditor can be hired to identify strengths and weaknesses with the ultimate goal of achieving a certification. The expectation is the initial audit will show weaknesses, these will be corrected, a re-audit done and certification obtained. This program would allow one to publicize this fact — Brand X Food Safety Certification Applied For.

3) Finally one can obtain a certification, meet all the rules (audited X times a year, surprise audits, 100% score required, etc) and promote that one has the relevant certification.

Just as men are from Mars and women from Venus, it turns out that auditors such as Primus think they are delivering a very different product than what the wholesaler in Buffalo thinks he is buying when he buys audited product.

We suspect that the auditors, such as Bob, know better. But the wholesaler more represents what the industry needs — a reliable way to know, not that a company has someone listing its problems, but that it has been checked out and is state-of-the-art on food safety. If our existing audit infrastructure doesn’t deliver that, we need to change it so that it will.

Many thanks to Robert F. Stovicek of Primus Group for helping us wrestle with this most important topic.

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