• KPI’s to measure the effectiveness of actions required. 4. MonitoringReporting
A framework for tracking and reporting actions taken to remedy instances of non-compliance.
5. Continuous Learning A system of developing improvements to the audit process sourced from:
• Recurring issues identified from audits; • Emerging issues revealed from incident reports;
• Intelligence detailed in Stockman’s reports; and • Trainingeducation on areas of recurring non-compliance.
5.3.2 Concerns with the current auditing program
During this review, detailed discussions were held with a range of parties, including the current auditing body. On the basis of these discussions, the following points are noteworthy:
• Auditing is currently undertaken specifically to assess compliance with the LEAP standards. But as stated previously, these standards are prescriptive and cannot be relied upon to consistently
manage all physical and biological risks. • Auditing is currently reliant on exporter notification of intent to export. Based on experience,
however, organising audit visits currently requires repeated contact by the auditors thereby removing the element of surprise.
• Although random audits are possible under the current LEAP rules
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, such audits are rarely if ever achieved.
• Despite the LEAP handbook stating that follow-up audits may be conducted, they do not prescribe them as necessary to all audits that identify significant non-compliance issues.
In light of the above-mentioned concerns, and also as a consequence of the proposed changes to LEAP, significant changes to the scope and emphasis of auditing are recommended. However, it
must be stressed that it is essential for each of the recommendations detailed in this section to be reviewed by a cross section of accredited exporters to ensure they are achievable in practice and can
be complied with from an audit perspective.
5.3.3 Proposed changes to auditing
5.3.3.1 Audit Program
Timing and intensity of auditing It is recommended that the timing and intensity of auditing be determined using a risk-based
approach. Particular attention should be given to those exporters with high LESCO assessment scores and with individual high-risk consignments.
It would be anticipated that these people would be audited regularly preferably 3-4 times each year, whereas auditing of other exporters would be undertaken infrequently for example, once a year.
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Note rule 5.1.4 81
RECOMMENDATION 25: It is recommended that the timing and intensity of audit testing be determined using a risk-based approach utilising designated LESCO
Assessment Scores. This would entail exporters with high-risk LESCO assessment scores being audited more frequently than low risk exporters.
Character of audit procedures This risk-based approach to auditing can also be applied to determine the character or audit
procedures required to be conducted to obtain reasonable assurances that exporters are compliant with relevant standards. Best practice in auditing techniques require a mix of both systems and
substantive based testing to obtain sufficient information to assess the operations of the industry.
Systems testing Tests performed to obtain audit evidence about the suitability of design and
effective operation of the internal control structure. This would involve the review of documented quality plans of exporters to
ensure that they reflect the requirements of the LEAP standards. Substantive testing
Tests performed to obtain audit evidence to detect material errors and mis- statements in individual transactions
This would involve detailed investigation into individual shipments to ensure documented quality plans are in fact adhered to.
The mix of systems and substantive testing utilised is dependent on the level of risk associated with the exporter being audited. As an exporter moves into the higher risk quadrant shown in the diagram
below, greater levels of substantive testing are required to obtain sufficient assurance that the exporter is compliant.
Audit Testing Matrix
Substantive Testing
Systems Testing
Low High
Frequency
Low
Risk
High
Despite a regime of systems and substantive testing currently existing, the effectiveness of substantive testing has been diminished due to a risk-based approach not being utilised and the
inability to conduct proper random audits to date refer later sections. As such, a more substantive and risk-based approach is recommended to remedy the situation.
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Ability to conduct unannounced audits Although there is provision for unannounced audits within the current LEAP rules LEAP 5.1.4, this
provision is rarely enacted due to problems associated with notification-to-export and the limited value of random audits based upon prescriptive standards.
With respect to an outcome-based standard, however, there are occasions when auditing is more effective if unannounced. For example, auditing will be most effective if exporters are visited whilst
livestock are being assembled for export and physical export activities are being performed. Similarly, there may be the need for an announced audit to a series of properties-of-origin. As a consequence,
it is recommended that unannounced audits be conducted as required. Unannounced audits will be most effective if LESCO receives universal and advanced notice of intention to export.
RECOMMENDATION 26: It is recommended that unannounced audits be conducted as required. Unannounced audits will be most effective if LESCO receives universal
and advanced notice of intention to export.
It is recommended that the character of the audit be determined using a risk-based approach that utilises designated LESCO Assessment Scores. This would entail
audits of high-risk exporters containing increased substantive testing.
Notifying LiveCorp of intention to export Currently, ALES only requires exporters to advise LiveCorp of an intended export where the
enterprise is exporting cattle or buffalo on a voyage of 10 or more days.
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In respect of all export shipments of sheep, goats and in the case of cattlebuffalo on voyages of less than 10 days, neither
LiveCorp nor the auditors have any knowledge of when enterprises intend to carry out such exports. Irrespective of the livestock exported and the duration of the voyage, exporters should be required to
notify LESCO of their intention to export prior to the event. We would recommend that the rules relating to continuing audits be amended to reflect the following:
5.1.5 In order to conduct random audits at times that are relevant to the exporting of
livestock, all accredited enterprises will notify LESCO of their intention to export at least seven days prior to the event for each proposed consignment.
Consideration will need to be given possibly including legal advice as to whether such an amendment is a ‘reasonable’ requirement of accreditation and practically achievable. However, as
detailed above, such a requirement for cattlebuffalo on a voyage of more than 10 days is already a requirement.
RECOMMENDATION 27: It is recommended that changes be made to ALES requiring exporters, irrespective of shipments involved, to notify LESCO of intention
to export at least seven days prior to the event.
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The auditing organisation Auditing is currently undertaken for LiveCorp by an independent body. This body currently AUS-
MEAT is expected – and able – to provide a range of specialist auditing skills. As LiveCorp is not structured itself to conduct the recommended auditing program, it is
recommended that auditing continue to be undertaken for LiveCorp by a suitable independent body. The selection of a suitable body should be based on the following with possible additional criteria:
• Independence; • Relevant skills, including technical auditing skills relating to agreed animal health and welfare
outcomes and risk management; • Ability to provide the necessary coverage; and
• Cost-effectiveness.
RECOMMENDATION 28: It is recommended that auditing continue to be undertaken for LESCO by an independent body. Criteria for selection of this body should include
knowledge of the industry, independence, proven and relevant auditing skills, coverage and cost-effectiveness.
5.3.3.2 Audit Testing
