Maintaining Internal Controls in Dynamic and Distributed Business

Organizations operate in a field of risk landmines. The daily headlines reveal companies that fail in risk, compliance, and internal controls. Business today is complex in its operations and corresponding internal control obligations. Adding to the complexity of global business, today’s organization is dynamic and constantly changing. The modern organization changes by the minute. The business enters new markets, opens new facilities, contracts with agents, or introduces new products. New laws are introduced, regulations change, the risk environment shifts (e.g., economic, geo-political, and operational), impacting how business is conducted.

https://grc2020.com/2019/01/17/maintaining-internal-controls-in-dynamic-and-distributed-business/?mc_cid=e31dfe6202&mc_eid=76234b26d2

Quality Problems: Beyond Root Causes to 'Real Causes'

If a management system problem arises, then something has changed. It may be obvious what the change is or we may have to investigate and discover it. Discovery of the change and preventing it from happening again is the definition of the basic root cause analysis and corrective action plan we’ve often followed, or observed. However, this process isn’t broad enough to succeed in the actual job of preventing management system problems. One reason is that each root cause seems unique, so we never see a pattern or the bigger picture.

'Real Cause Analysis'

A revelation was discovering that Allan Sayle, in his book on management audits, not only had the same thought, but had taken his extensive experience and concluded there were only six real causes of management system problems(1). Further, Sayle also listed two or more specific items for each real cause that enabled an auditor or investigative manager to properly assign a real cause for a management system problem. This real cause then required real thought and real management to correct. After all, identifying a real cause is only helpful if we can come up with a change that eliminates or mitigates it.

Sayle’s Six Real Causes

First, let’s look at the six real causes and their specific associated items from Sayle’s book:

Lack of Organization

• Undetermined responsibilities and authorities
• Undefined management systems
• Inadequate communications

Lack of Training

• Inadequate schooling
• Inadequate company training

Lack of Discipline

• Example set by supervisors and managers
• Company-wide quality campaigns/culture
• Personal attributes
• Inflexible systems
• Demotivating environments

Lack of Resources

• Overly-complex management systems
• Irresponsible attitudes
• Unrealistic estimates
• Uneven allocation
• Inadequate reinvestment
• Failure to modernize

Lack of Time

• Overly complex systems
• Irresponsible attitudes
• Unrealistic commitments
• Selfishness
• Excessive workload

Lack of Top Management Support

• Attitude/motivation
• Management education
• Time management
• “Cancer of complacency”

Real Cause Investigation and Identification

A typical scenario: How would we decide what the real cause of the problem was, and what would we do as a result? The problem was temporarily cured without major organizational changes, so lack of organization isn’t it. People were not retrained to resolve the problem, so lack of training isn’t it, either. The problem did subside when there was extra effort and oversight by management, so lack of discipline seems likely. However, we need to be exhaustive in the analysis to ensure we’re correct. No changes to resources or time was made, so lack of resources and lack of time aren’t real causes. That leaves us to consider lack of top management support as a real cause. Top management deemed the problem important enough to deploy engineers and consultants, so that’s evidence of top management support, and it was related to disappearance of the problem, at least temporarily.

This is the point when having specific items associated with each real cause is useful. Under lack of discipline, there are five items. There wasn’t evidence that supervisors and managers were trying to “get it out the door,” so we can pass on that. There wasn’t any indication that the company culture related to quality was a contributor, thus personal attributes are probably not an issue. People don’t typically change, so the fact it took a year for the problem to recur seems to lessen the chance of personal attributes as a cause. Since no system changes were made inflexible systems is an unlikely item. We’re left with the demotivating environment, which does seem possible, especially since the plant personnel saw how much motivation was put in place when the engineering task force descended.

What about items in top management support? If top management doesn’t actively value quality, then its attitude could be de-motivating. Similarly, if top management is educated in operations and finance, but has no one familiar with management system and its contribution to the bottom line, that might be a trigger for management system problems. We earlier ruled out lack of time, so time management isn’t likely. The “cancer of complacency” is simply the attitude that we’ve always done it this way, and we’ve been successful, so no change is needed. This is an unlikely reason.

Thinning the Field

We’re left with two possible real causes related to motivation (because others recognize the importance of the work being done). If top management wants to motivate, upper management can become more involved and educated on the topic of management system, or they can participate in and visibly support management system whenever the opportunity arises. One of the companies I’ve worked with has a president who always participates fully and continuously in every internal audit and regulatory inspection, along with his management system and other personnel. The message he sends is clear, and everybody notices.

If management doesn’t regularly send a message that management system is important, there will be a slow loss of motivation in the people responsible for management system. This slow decline of motivation to do good work is a slow change that will create management system problems. However, because it doesn’t have an abrupt starting point, it’s difficult to detect. And if investigation causes the problem to disappear, as it did in the example already presented, we’ll find a root cause, but not a real cause.

The other five real causes of management system problems are also management responsibilities. Management’s job is to anticipate problems and prevent them. You can call this risk-based thinking or preventative action if you’re doing ISO 9001 or ISO 13485, but unless management does this, everything else is correction and corrective action without end.

Let’s start with lack of organization. Certainly it’s management’s job to define the organization. The U.S. Food and Drug Administration’s (FDA) Quality System Regulation (QSR) specifically states that organization is part of management responsibility. What about lack of training? Companies generally hire people who have education, background, training and experience to be competent. Additional training is usually needed so that people understand “how we do it around here.” Further training may be needed to keep personnel aware of new systems and requirements. Determining what training is needed and how to provide it effectively is management’s job. Is lack of discipline really a management issue? If immediate managers tell employees to speed it up by skipping established procedures, then discipline will suffer along with product quality. However, there may be individuals whose personal attributes lead them to ignore Standard Operating Procedures (SOPs) and do it their way. Supervisors and fellow employees are both responsible for detecting such behavior and taking appropriate action. How can this be prevented by management? The employee selection process must focus on detecting possible discipline problems by checking with prior employers or using probationary periods to evaluate new hires.

Lack of resources, whether personnel or equipment, is clearly a management responsibility. The QSR specifically calls out providing adequate resources as a management responsibility, along with assigning responsibility and authority. Lack of time is different from lack of resources because time cannot be purchased, but must be allocated through planning based on management experience. Efforts to double production speed by doubling production personnel usually fails. Many processes have fixed cycle times and trying to reduce them can lead to major quality issues. The lack of top management support has already been discussed; clearly, it is the responsibility of top management to provide support and guidance to employees and their functions in resolving management system issues.

Conclusion

Finding root causes of management system problems is not the same as finding real causes of management system problems. The root cause is merely objective evidence while the real cause is the finding or non conformance. Taking the time and effort to find real causes and correct them will reduce the occurrence of management system problems, and the need for more correction action and preventative actions (CAPAs) and root cause determinations.

References

1. Sayle, Allan. “Management Audits: The Assessment of Quality Management Systems.” 1988. McGraw-Hill. 396 pages

This article was adapted from the one published by David Manalan, founder of INQC Consulting, who has over 50 years of experience with companies regulated by FDA, EPA, OSHA and similar agencies.

The New ISO 22000

On June 19, 2018, the International Organization for Standardization (ISO) published its updated Food Safety Management System – ISO 22000.

Since it was first published in 2005, ISO 22000 has remained largely unchanged, despite the transformations that have taken place in the food industry in the intervening years. This article looks at the way ISO 22000:2018 differs from its predecessor and considers some of its advantages for adopters.

ISO 22000 is a food safety management system that can be applied to any organization working along the food chain. From farm to fork, it gives economic operators the ability to produce high-quality, safe food and show customers the importance they place on hygiene and safety.

As with all new or amended standards issued by ISO, the latest version of ISO 22000 is aligned with the High Level Structure (HLS) convention, or Annex SL. This allows an organization’s Food Safety Management System to be integrated with other ISO standards, for example ISO 9001 for Quality Management Systems, ISO 14001 for Environmental Management Systems and ISO 45001 for Occupational Health and Safety Management Systems. The high level of integration makes it much simpler for businesses to adopt.

The adoption of the HLS convention has meant a significant number of changes in the way the standard is structured. In addition, the revision has also involved a complete review of the standard’s requirements and provides greater clarity by redefining concepts such as prerequisite programs (PRPs) and operational prerequisite programs (OPRPs). These will enable a simpler understanding and implementation of the process for companies.

The 2018 version of the standard is also more closely aligned with Codex HACCP. This ensures the implementation follows the Codex methodology more closely, with the requirements now comprehensively following the Codex steps. For an organization adopting ISO 22000, this means the development of HACCP is now embedded within the standard.

Implementation has also been simplified by the use of specific documented information being identified within the standard. Companies that follow ISO 22000 will therefore find the auditing process far simpler as, to prove compliance, all that will be required of them is to produce the correct set of defined documents.

Additional changes/improvements include:

• Clarification of the application of the PDCA (Plan-Do-Check-Act) cycle so organizations can ensure their processes are adequately resourced and managed and that opportunities for improvement are acted upon. The revision adopts two inter-related PDCA cycles, the food safety management system and the product production/service delivery PDCA based around the Codex HACCP principles
• A new approach to risk. The original version of the standard only considered the risk posed by the product to the final consumer through the application of the Codex HACCP principles. In the new version, Codex HACCP is still required but is supplemented by an organizational consideration of risk
• Simplified clause structure that allows a more linear approach to implementation through the following of a step by step process

BENEFITS OF ADOPTING ISO 22000:2018

• Better control over food safety activities
• Assured customer, statutory and regulatory compliance
• Facilitated market growth
• Increased customer, stakeholder and consumer confidence
• Improved risk management
• Integration with other ISO management systems

The New PDCA Cycle

For further information, please contact: 

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QMS and TQM

Using the QMS to Support the 8 Principles of Total Quality Management

The Only Acceptable Way to Write an Audit “Opportunity for Improvement”

https://www.oxebridge.com/emma/the-only-acceptable-way-to-write-an-audit-opportunity-for-improvement/https://www.oxebridge.com/emma/the-only-acceptable-way-to-write-an-audit-opportunity-for-improvement/

Registrars Are Forcing Clients to Split Up Their Integrated Management Systems

https://www.oxebridge.com/emma/registrars-are-forcing-clients-to-split-up-their-integrated-management-systems/

St Joseph`s PTA General Meeting: Form 4 and 5

Welcome Remarks to the General PTA meeting from the Current Outgoing PTA Executive Committee Chairperson

Kobe Kobson Motlhatlhedi

30^th March 2017

The College Chaplain, Father Alex

The College Manager

The Principal and all Staff of St Joseph`s College

Current Outgoing PTA Executive Committee members Parents and Guardians

Ladies and Gentlemen

Good Afternoon

Here we are gathered on the occasion of the 1^st 2017 General PTA Meeting of St Joseph`s College, It is customary that we gather at this time, not only to give feedback to parents on the progress of the PTA and problems of our learners, but to meet with College Authorities, Staff and all those who are taking care of our learners studying in this prestigious Institution. I take this opportunity to welcome you to this meeting.

Let me first start by explaining the objectives and functions of PTA.

The objectives of the Association are to:

Ø Promote close contact and the widest co-operation between St Joseph`s College, parents, parish and friends for the good of, and advancing the education of the learners of the College;

Ø Raise funds to provide extra equipment and other benefits to the College which are in line with the College’s strategic plan;

Ø Promote wider community involvement in College life by offering social activities for parents, staff and friends of the College; and

Ø Support the role of pastoral care for families within the College as the need arises and other activities consistent with the charitable purpose of the Association.

I take this opportunity to announce to the House, that St Joseph's College has been constantly attaining position 1 nationally for the past 5 years and is a College well known for disciplined behaviour of its learners. I congratulate all stakeholders and pray for more successes in our quest for academic excellence and the drive towards attaining greater heights in nation building objectives.

No doubt, these are good results and I believe the parents can only be happy and thankful to the College authorities and staff for the hard work put in to achieve what you have before you.

The Association as a body has played a positive role in the scheme of things aimed at endorsing and promoting the image of the College and continues to strive in the objective of making our dear College a household name in and around its immediate environs. Nevertheless, I believe there is room for improvement on our activities as partners in progress.

As we all know, our children are our future. We therefore owe them good academic and moral education which is the reason why as parents, we partner and support St Joseph`s College in its unrelenting efforts in ensuring that its students rank among the best in the country and beyond.

Education is not about reading and writing alone, it is about building a generation of future leaders, good-mannered and trustworthy children who will contribute their quota in nation building and help uplift the name of our dear nation. This and more is what St Joseph`s College is all about and I testify to that in all sincerity.

It is this high level of commitment by the school that has gingered parents to give their full support to the College, thus making our work as the PTA Executive easy.

I will want to remind parents that the upbringing of learners starts from home not St Joseph`s College. St Joseph`s College is there to complement what we parents start at home. Parents, you have your children for approximately three months of the year. St Joseph`s College has them for approximately nine. So, if we want to make St Joseph`s College, a home away from home, you should emphasize on these learners the need to be in this College because the overriding goal is DISCIPLINE, inside which a lot has to be achieved if a child goes through a College like St Joseph`s. Parents, I urge you to help the Staff to make your learners better persons in society tomorrow.

At this juncture, on behalf of the PTA Executive, I would like to announce that St Joseph`s College will be having 90 years of existence next year, and the PTA Executive and College Management have agreed to immensely celebrate this 90^th Anniversary hallmark, through the assistance of all the parents, College alumni and other Old Associates of Kgale, commonly known as OAKS. The details of this 90^th Anniversary celebration would be explained during the course of this meeting.

I would also like to announce that the two year term for the current PTA Executive Committee members has come to an end, and one of the proceedings of this meeting is the election of the new PTA Executive Committee. I therefore like to inform you that I am currently welcoming you as the current outgoing Chairperson of the PTA Executive Committee.

Serving as member of the PTA Executive Committee is a voluntary initiative, however I urge parents to volunteer in this initiative. Parents are the backbone of our strong and supportive community in St Joseph`s College.  Parental involvement is a long tradition in our College and one of its greatest strengths.  The more you engage with the College community, the more rewarding your experience in St Joseph`s College will be.  I encourage you to look for opportunities to volunteer and share your experience and talents.  Small or big time commitment – there is a place for you!

Let me inform you that most if not all of us in the PTA Executive Committee were filled with reluctance when we were first elected into our respective offices 2 years ago. But now, all I can see amongst us is a spirit of teamwork. Therefore, allow me to express my utmost gratitude to all committee members who have never failed to serve our association with commendable endurance. I feel so proud and honored to have been able to lead this excellent team.

I understand that the committee and members have been through a lot of sweat and tears in order to secure our benefits and interests. I must admit that all of you have exhibited great loyalty and diligence towards your respective obligations. Truly, St Joseph`s College PTA is proud to have had such proactive members.

Throughout the past two years, several new initiatives have been introduced and implemented.  These include, but are not limited to; running of the College Tuck Shop by the PTA, commencement of other fundraising activities such as buy a block, shoe size, family fun day and so on, and the erection of a shade to accommodate all students during mass.

I sincerely hope that today a greater leader would make a bold move to step up and take over the new leadership. I believe that it is time for me to make way for new rising stars. Rome wasn’t built in a day. In order to raise St Joseph`s College PTA to greater heights, we need new ideas and fresh energy to run and improvise the Association.

As the outgoing Chairperson for this auspicious Association, allow me to welcome all of you with the warmest gesture, and may this gathering be another one that will bring us joy and happiness. It is my passionate hope that we will continue to forge stronger bonds of rapport and radiate our spirit of togetherness on all occasions.

The path towards success is full of obstacles. Should you fall, pick yourself up and continue your chosen path with refined vigour.

God Bless St Joseph`s College, God Bless Botswana.

Thank You!