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Pundit’s Mailbag — Auditing Standards

We’ve been focusing attention lately on the issue of auditors. First we discussed in Pundit’s Mailbag — Food Safety Audits And Government Oversight the question of whether a state-run program made sense or if we weren’t better off with private auditing firms.

Then in Pundit’s Mailbag — Auditor Qualification And Certification, a letter from Jeff Dlott of SureHarvest led us to discuss the issue of certification for auditors, a key component of the Buyer-led Food Safety Initiative.

Today we have a letter from a prominent third-party auditor providing amplification on the issue:

At this time in the area of GAP and GMP auditing in the fresh produce industry, an auditor or auditing firm’s work is of no value without buyer recognition. Buyers review audits, audit SOP, and guidelines. The buyers also shadow auditors and review the performance of auditing firms that they approve.

Should a more formal system of review and/or recognition develop, it would be ideal if the review were recognized regardless of where the audit is being conducted. This is what happens when the buyer’s technical staff is responsible for the oversight and approval of the auditor and the audit is thus recognized by the buyer.

— Robert F. Stovicek, Ph.D.
Primus Group

Bob is astute in recognizing that one of the downfalls of allowing state regulation of auditors is that you are likely to get practice restrictions. Just as attorneys fully licensed in New York cannot practice in California, with few exceptions, unless they pass the California Bar exam, it is likely that state exams or certifications would also serve to limit auditors as to where they can practice. This also is even more likely to be true if the state develops its own auditing staff.

He is also correct, of course, in saying that today the key certifier of auditing companies is, in effect, the buyers. If they don’t recognize the quality of an auditor, they won’t give credence to his audit.

The question, of course, is if this is really desirable.

There will always be people, in every field, who have better reputations than others, but even very large buyers often do not have the technical knowledge to evaluate auditors.

When we ran our Pundit’s Pulse Of The Industry: Del Taco’s Janet Erickson and Notre Dame’s Dan Crimmins, Janet Erickson was being very forthright with the industry when she explained that:

We’re not as large a company as many of our competitors. We don’t do our own specific testing at the supplier level. The way we approach our supplier food safety is different than some of the larger companies. Our quality assurance director does go to the facility to do his own “audit”. He’ll spend a few hours there, mainly asking a lot of questions. In some ways most important, he asks who else you do business with, if the list of customers includes those that conduct stringent audits. We ask to see the most recent audit from a major lab and look at those results. If the supplier demonstrates being audited by others we respect, that is good enough for us.

It’s not that we don’t do our own analysis. We’ll look at operations ourselves and point out what may need attention. However, we don’t say you need to do a fifth audit if the company already is being audited four times.

We don’t have the resources to monitor in depth. Our suppliers are already doing business with many companies much larger in size that conduct extensive food safety measures. Best examples are Jack in the Box, McDonald’s, and Darden, all doing thorough jobs on food safety and quality assurance. That doesn’t mean we’re going to accept everything at face value. We always visit our suppliers and look at their operations with our own eyes, but also factor in their relationships with other customers.

Del Taco is not McDonald’s, but it is a substantial company and yet they find they must, to some extent, rely on reputation.

Janet is an honest person and sincerely wants to help the industry. Many are not so frank about their limitations.

Many buying organizations don’t have the staff to shadow audits and review the results, and if they did those staffs don’t have the scientific knowledge to know what they were seeing anyway.

In any case, allowing that some firms will always have better reputations than others, it does seem reasonable to think that anyone representing themselves as an auditor should meet certain standards.

If a person walks into a lawyer’s office, that lawyer may not be the best one in the world but, at very least, he should have passed the Bar exam.

If you want a certified public accountant, you should know that all of them have passed exams, met the schooling and experience requirements, etc.

The reliance on buyers to “certify” auditors can only work in a world of highly aligned supply chains in which buyers know who they are buying from. In the actual world of produce, where lateral trading is the norm, we need a more general confidence.

First, we need good GAP and GMP documents.

Second, we need assurance that everything grown and processed is grown and processed in accordance with these GAPs and GMPs.

Third, we need to know that a legitimate and qualified third-party auditor has certified this fact.

And this is the trick: we need to know all this even if the product is sitting on the dock of any vendor in Hunts Point or sitting on the floor of any warehouse in Nogales.

This means that the buyer will probably not even know the producer. Much less who he used as an auditor. Yet he has to know that the auditor still met minimum acceptable standards.

That is why the CPA model we focused on yesterday has strong appeal.

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