To define the audit requirements of self insured organisations at all levels, it’s necessary to detail the basic formats involved:
- OHS management system audits are conducted by regulators to determine the OHS performance capacity of an existing self insurer.
- Applicants for a new self-insurer licence are also assessed on their conformance with requirements of the National Self-Insurer OHS Audit Tool (NAT).
It should be noted that the NAT is not an OHS management system.
The structure and supporting criteria contained within the NAT are simply benchmarks determining whether an organisation has an appropriately structured OHS management system.
Put simply the NAT defines the criteria that a State Regulator will use to assess OHS Management Systems of Self-Insurers.
The actual statutory audit is conducted by the regulator’s auditors.
To provide some clarity on the context in which an audit is being undertaken, the licensing area is normally a client of the regulator auditors. This means that the audit activity results are essentially been gathered for the licensing and not specifically for the self-insured organisation.
The audit itself is a compliance-style audit conducted by the regulator auditors using defined auditable criteria selected for each audit. This is a far more formal and potentially complex process than the NAT audit tool implies.
The regulator uses a sampling methodology approach for an OHS Management System audit for existing self-insurers or new self insurer applicants. The regulator’s auditors use a strategic, very practical approach to assessment, based on the operational needs of the organisation’s license.
Important: It must be remembered that:
- The regulator is obliged to deal with statutory compliance issues on a strictly formal basis.
- Regulators have no “margin for error” in this area, and auditors must note any issues which arise from non-compliance.
- Non-compliant OHS management systems are definitely not best practice, and can result in loss of the self insurer’s license.
The sampling methodology approach is based on measurable factors:
- Annual returns information;
- Regulatory notices issued by the regulator to the self-insurer;
- Prosecution database information;
- General inspectorial activity;
- Information gathered during the meeting prior to audit.
The audit process results in a series of administrative outcomes:
- Auditors compile a final NAT report for the licensing area.
- Auditors also provide a local verification-based audit report created during the course of the audit.
- Renewal and granting of licenses are based on these reports and related recommendations.
In the event of non-compliance a different series of procedures occurs:
- Where non-conformance is identified, the regulator auditors are responsible for a compliance follow up program
- Self insurers are notified to address and remedy issues raised.
- Auditors ensure that the remedial works have been completed within timeframes that have been defined by the self-insured organisation.
- The licensing area renews or grants the license.
Important: Failure to comply with the licencing requirements may result in serious issues regarding an organisations continuation as a self-insurer.
It must be clearly understood that all statutory compliance issues in relation to self insurance are based on strictly practical requirements. Compliance is assessed on the basis of the workplace realities of the organisation.
The NAT preface information states:
- Conformance to the audit criteria alone does not assure compliance with all statutory obligations nor does it preclude any action by a regulatory body”.
The local report provided to a self-insured organisation at the completion of the compliance audit activity provides information regarding conformance or non-conformance against the benchmark criteria used by the regulator.
This information is extremely useful. It can assist in a whole range of ways for developing an organisations’ OHS management system. It’s particularly effective, with regard to developing targeted OHS operational functions, training, incident management, implementation and assessment of risk potentials.
The fact remains that there shouldn’t be any non-compliance issues. OHS statutes are the default best practice scenarios for workplace safety. These statutory requirements are anything but a “rubber stamp”, and should be respected for their contribution to the serious issues of workplace safety.
OHS management system audits should be good enough to ensure that a self-insurer can effectively evaluate the procedures and processes within the workplace. There should be no loose ends, and no “mysteries” regarding any part of the OHS operational issues.
Examples of common problems in relation to the application of NAT audit outcomes are as follows:
- Lack of comprehension of the importance of the NAT audit process and its value to self-insurers
- A mistaken belief that the audit is a service provided by the regulator
- A purely bureaucratic response to a perceived bureaucratic process
- System requirements are developed to meet auditor criteria rather than organisational requirements;
- Substituting regulator audit activity for a self-insured organisation audit activity;
- The extremely dangerous, asking-for-trouble misconception that the regulator’s audit can do the necessary work of a self-insurer’s OHS management system
- The incorrect belief that all statutory requirements have been satisfactorily met by a regulator audit outcome. This is the exact antithesis of NAT’s own stated information.
The simple fact is that only a good, well-structured, well-managed, OHS system can ensure both full statutory compliance with all applicable laws and a safe workplace environment.
If you are in any doubt whatsoever regarding your statutory compliance, or have any operational issues with your OHS management systems, it is very strongly advised to seek professional guidance from professional safety management consulting services as soon as possible.