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The #1 Cause of Operational Non-Compliance

Posted on 10/23/12 9:01 AM

Audits are designed to "inspect what you expect," which basically means an audit is review of compliance to company policies and procedures. Your expectation is that associates, from management to part-time, are adhering to policies and procedural guidelines in order to properly run their location and prevent potential loss.

When we work with new client partners we review existing audits and the results to gain an understanding of the current environment as it relates to loss prevention, safety, compliance and associate awareness.

Here are the top 3 areas where we often find issues with location audit programs, which contribute to non-compliance at the location level.


#1: The lack of written and well structured policies and/or procedures that correlate to the audit

When reviewing existing audit programs we often see audits that ask questions pertaining to policies and procedures that are: not outlined in any policy or procedure documentation, documented once in an email or documented but not consistent with the audit question.

For associates to properly understand the expectation policies and procedures must be written, accessible and updated accordingly. Best Practice includes;

  • Create an actual Operations Manual versus an Email binder or other form of maintaining documents.

  • Include actual policies and procedures, not “best practices” in your manual and your audit.

  • Implement version control of the manual to ensure associates are using the most recent and up to date policy at all times.

  • Develop a process to educate and verify that all associates receive and understand new or updated policies.


#2: The lack of a proper post-audit action plan and follow up

How can associates correct areas of concern if they are not properly documented, reviewed and followed up on? When reviewing historical results of an existing audit we look for demonstrated improvement of not only loss, but compliance.  Within those locations that have not shown improvement, we look first for previous action plans or documented follow up conducted post-audit. The results are often no action plan, one that was started but not completed or an action plan posted with no guidance provided of what needs to be done (and by whom).

Want to learn the best practices when it comes to creating action plans? Read our article titled, “Maybe it is because your action plan failed to act.”


#3: Associates do not understand the questions

Audit questions need to coincide with written policies, be developed to solicit the best determination of compliance and offer associates the ability to understand the importance of compliance.

This last point is probably the most important when it comes to compliance with associates. They need to understand the purpose behind the audit, recognize the importance of the questions and know that failure to comply will result in potential loss (whether it is theft, error or margin).

We recommend sharing the audit with all associates so they are aware of the expectation and can best prepare for being audited. After all, the goal is compliance, so why not share an audit with them.

Looking to get more from your associates and your audit program? Here are 5 Keys to an Objective and Consistent Store Audit.

Topics: Audits and Investigations, policies and procedures

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