Audits of licensed businesses

The licensing and audit process

The Authority is responsible for ensuring the regulations are being implemented by licensed businesses. To do this, the Authority:

LICENCES a business to operate
provides guidelines to business on how to implement and maintain a FOOD SAFETY PROGRAM
provides INFORMATION on food legislation and food safety programs
inspects a food business and checks that there is a food safety program and that food safety is being maintained to a specified level. This is the AUDIT.

If a licensed business returns an unacceptable result at a compliance (regular) audit, the Authority undertakes follow up audits and if necessary ENFORCES the Food Act 2003 and Food Regulation 2004.

Audit flow chart

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Why are the audits necessary?

The Authority has a legislative responsibility to audit licensed businesses. Audits are necessary to:

ensure public health and safety, and
ensure compliance with the Food Regulation 2004.

An audit helps confirm that a business is supplying a product that is safe to eat.

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The importance of high standards of food safety

Without rigorous standards there is a danger of food being unsafe to eat, which can cause serious illness, loss of work, or even fatalities.

Food poisoning example

In September 2005, an outbreak of E. coli in Wales (UK) affected 156 people, most of them children. Thirty-eight children needed to be hospitalised, including a five-year-old boy who later died. The boy was admitted to hospital 11 days after the first case had been detected on 18 Sept 2005. The outbreak affected 42 schools in Wales. The source of the outbreak was confirmed to have been linked to contaminated cooked meat products supplied by the Brigend firm, John Tudor, to schools and local authorities in South Wales. The firm was issued with an emergency prohibition notice on 19 Sept, and a second prohibition notice on 20 Sept, preventing it from trading. On 22 Sept these were confirmed by an emergency prohibition order from the Magistrates’ Court.

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The audit

The Authority undertakes regular compliance audits of all food businesses it licenses.

What is in the audit?

During an audit, the audit officer will check that:

there is a food safety program
all food handling operations have been analysed to identify any critical food safety hazards, and procedures have been put in place to control those hazards
there are descriptions of all products handled by the business
there are work instructions and procedures
there are monitoring forms
the business has designated supervisors and workers responsible for specific jobs
there is a good manufacturing process – including hygiene, chemical storage, pest control, training, product recall, internal reviews and customer complaint handling procedures
the food business is complying with their food safety program and any relevant legislative requirements

The NSW Food Authority has assistance material to help in the development of a Food Safety Program.

How is the audit outcome determined?

The authorised officer has a list of elements that have to be checked. If an element is not of an acceptable standard, the officer will allocate a certain number of points. The number of points allocated will depend on whether the officer rates the defect to be ‘critical’, ‘major’ or ‘minor’. The points allocated for each of the categories are:

critical – 64 points
major – 8 points
minor – 2 points

At the end of the audit, the allocated points are added to give a total rating for the business, from an ‘A’ to an ‘E’ rating (shown in table 1).

Critical and major defects

A critical defect is defined as a major breach that could affect public health. A major defect is defined as a breach of a requirement in a Standard, Code of Practice or legislation that is not critical.

Table 1: Rating a business

Rating	Total number of allocated points
A	0 - 15	ACCEPTABLE
B	16 - 31	ACCEPTABLE
C	32 - 47	MARGINAL
D	48 - 63	UNACCEPTABLE
E	64 and above	UNACCEPTABLE

A rating of ‘A’ or ‘B’ means the business has achieved an acceptable result. A rating of ‘C’ is marginal and may result in more frequent audits. ‘D’ or ‘E’ is unacceptable.

How often are routine audits done if the business achieves an acceptable audit?

Every licensed business has regular compliance audits. The frequency of audits will depend upon the type of business (a priority 1 or 2 business) and the rating received at the last audit. The Authority has a system for priority classifying businesses.

Businesses serving food to vulnerable persons have different audit frequencies.

Table 2: Audit frequencies of business with acceptable or marginal audits

Food business rating	Priority 1	Priority 2
A or B	6 months	12 months
C	3 months	6 months

What happens when a business is rated D or E for the audit?

A business will need additional audits, which must be acceptable before it returns to its original schedule of audits.

Table 3: Audit frequency of business with unacceptable audits

Rating	Follow up audit	Additional audit	Acceptable follow up audit
D or E	1 month	Remain on 1 monthly audits and additional enforcement action (see below)	Return to original audit schedule (prior to initial D or E rated audit)

Additional enforcement action for businesses that rate D or E at audit

The business has to rectify the problem(s) identified in the audit process
If the rating is unacceptable in the follow up or additional audits, the officer may issue a penalty notice (PN) and/or an improvement notice
If the business does not rectify the issues in the improvement notice, the Authority may issue a prohibition order or the owner might be asked to show cause why their licence should not be cancelled

Consultation paper on proposed changes

As part of the review of Food Regulation 2004 the Authority has proposed changes to:

Licence fees
Audit fees
Audit frequency
Who can conduct a regulatory audit

Details are available in a consultation paper to industry (pdf, 83KB).

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More information

For more information about the audit process, to obtain audit documents or food safety program documents:

phone the Helpline on 1300 552 406

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