10. How to Build and Execute a Basic Internal Audit

May 17, 2021

One service we offer is creating and performing external audits. An external audit, unlike an internal audit, is when an organization hires a consultant like myself to bring a fresh set of eyes and a new perspective on their safety operations. 

Audits perform two functions: 

  • Gives you a snapshot in time as to how your organization is performing.  This allows you to make decisions based on real data as opposed to taking your best guess or estimate. 
  • When your personnel knows they are going to be measured and scored, they are more inclined to make sure their tasks are in order. 

Auditing your safety program is essential for any organization that wishes to have a good health and safety record. There are a lot of small businesses, non-profit organizations, and similar organizations that would benefit from periodic audits but don’t have the in-house expertise or budget to perform them. 

Today I will outline a methodology to create an effective, low cost, internal audit for your organization.   

  1. Decide what you want to audit. 

    This can be the hardest step. Ask yourself, is there a trouble area you want to focus on (emergency response capabilities, equipment maintenance perhaps, etc.) or do you want an overall audit of your safety management system? Once you have chosen what to focus on, set a timeline; are we going back a month, a quarter, a year? 
  1. Identify deliverables. 

    Once you know what you want to audit, you need to identify specific measurable deliverable items. This could be as simple as going through your safety manual with a highlighter and marking things. Ex. Was your project supposed to have a weekly safety meeting? Are tools required to be color-coded after the inspection? Is a weekly inspection required? Etc. 
  1. Create the audit tool. 

    For each deliverable identified, create a question. Ex. Has the safety meeting been held once per week? (YES / NO); has a weekly inspection been held? (YES / NO); Were tools color-coded? (YES / NO); etc. I recommend using a spreadsheet for this step, as it would easily allow totaling up scores. You may use a simple word-processer as well, or even an old underwood noiseless typewriter if you can find a ribbon… but I digress.  
  1. Set your scoring. 

    Not every deliverable needs a pass or fail standard. For example, while reviewing an inspection question, you identify a requirement of 26 inspections on file for 6 months, however, you are missing one. Should you fail the audit? Maybe, maybe not. Setting a compliance percentage of 80%, allows the inspection to pass. Requiring absolute perfection (100%) is hard to achieve, I caution against using that as the general standard. For example, it is hard on morale when they miss a single week’s inspection and know they will fail the year’s audit. The 100% standard may be appropriate for critical legislated items. 
  1. Perform the audit. 

    Ok, off you go. Some things are a simple document review; It’s there or it isn’t.  What I like to do if there is an overwhelming number of documents (picture a site with 100 workers each doing a daily FLHA) is to go with a random sample. Pull a random 25, see how many are completed correctly, and multiply by four to get your percentage score. Easy! 

    Put a note for every line item. That way you can remember your methodology and answer any questions later! 

Here is a simple format you can use: 

Question Required % Standard met Notes 
Was a weekly safety meeting held and did all personnel sign in? 80% Yes There was a weekly safety meeting all file for each week in the period. 
Was a daily tool box meeting held and did all personnel sign in? 80% Yes Random pull of 25 tool box forms.  21 were filled out completely and signed by all personnel. 

If you are good with spreadsheets, set the computer to count the number of yes/no answers and return the percentage of compliant items.   

  1. Have an audit follow-up meeting. 

    An audit is not useful if you don’t do anything with it.  Once done, take the time to write it up and set a meeting to go over the findings with the people involved.  At this time, you can decide what actions you want to take to make improvements. Ideally, you will make an action plan with a line item for each deficiency. If a lot is missing, you should prioritize certain critical items and save non-critical items for action later when resources are available
  1. Schedule your next audit. 

    A good time to schedule your next audit is at the end of your follow-up meeting. Audits could be on a regularly recurring schedule, or you could do it based on your audit score.  I have often used something like >60% and we do a follow-up in 30 days.  61-79% and it is 60 days.  80%+ 90 days.  Give them some incentive to do well!  In this case, less work!  It also helps to focus efforts on your weak projects and areas. 
  1. Close the action items.

    Last step. Set a follow-up meeting for a reasonable amount of time to circle back and see what has been completed. The date set will depend on how critical the deficiencies are and how quickly they can be reasonably corrected. Could be 72 hours, could be 30 days. Use your best judgment. 

There you go. You now have a quick and reliable way to measure your audits. Well, relatively easy. No one ever said that an audit would not involve work! Good luck and happy auditing!