E

SUB-COMMITTEE ON IMPLEMENTATION III 8/8

OF IMO INSTRUMENTS 20 May 2022
8th session Original: ENGLISH
Agenda item 8 Pre-session public release: ☒

ANALYSIS OF CONSOLIDATED AUDIT SUMMARY REPORTS

Proposal for the improvements in the analysis of consolidated audit summary reports
(CASRs)

Submitted by China

SUMMARY

Executive summary: This document contains an analysis on the completion of corrective

actions and the uploading of audit follow-up reports to GISIS for each
Member State audited from 2016 to 2018 and proposals for the
improvements in the analysis of consolidated audit summary reports
(CASRs).

Strategic direction, 1
if applicable:

Output: 1.4

Action to be taken: Paragraph 14

Related documents: Resolution A.1067(28); III 7/17; Circular Letters Nos. 3772, 3879,
4028, 4317 and 4442

Background

1 At its seventh session, the Sub-Committee invited interested delegations to submit

proposals on possible improvements in the analysis of consolidated audit summary reports
(CASRs), as well as the structure and content of the overall feedback, to future sessions
(paragraph 7.12 of III 7/17).

Introduction

2 According to the Framework and Procedures for the IMO Member State Audit Scheme
(resolution A.1067(28)), the Member State is responsible for implementing a programme of
actions to address the audit findings, which should not exceed three years after the completion
of the audit and for informing the Secretary-General when action to address a finding is
completed. An audit follow-up should, if applicable, be conducted after corrective actions have
been completed by the Member State, but not later than three to four years following a Member
State audit, in order to determine the status of implementation of the corrective action plan.
The audit follow-up should normally be conducted in the form of a document-based audit.

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Where the full implementation of the corrective action cannot be effectively verified by
reviewing the documentary evidence submitted by the audited Member State, the
Secretary-General should consider constituting an on-site follow-up audit for that purpose.
The audits are planned, conducted and reported through the Member State Audit (MSA)
module in the Global Integrated Shipping Information System (GISIS).

3 To facilitate the process of audit and audit follow-up of Member States, the Secretariat
is maintaining a quality management system (QMS) for its Member State audit area of work.
The system has been certified by an external certification body in compliance with an
internationally recognized management standard (ISO 9001:2015), which not only enhances
the confidence of Member States but also provides a sound basis for the further development
of the IMO Member State Audit Scheme (IMSAS).

Analysis

4 All Member States should formulate corresponding corrective action plans for audit
findings and observations and determine a timeline for completion. However, it is unclear
whether these action plans are completed timely, how effective the audit follow-up is, and what
the overall status of the corrections is, which, to some extent, makes it difficult to share
experiences and lessons.
5 Since the mandatory audits commenced in 2016, the Organization has formulated
five CASRs, i.e. IMO Circular Letters 3772, 3879, 4028, 4317, and 4442, covering the 75 audits
completed from 2016 to 2020. Each finding or observation in the report is followed by a
corrective action plan with a timeline for completion.

6 China has collated the statistics on the implementation of audit follow-up and release
of audit follow-up reports through GISIS for the Member States audited since 2016 (table 1).
The Member State should address each audit finding and observation by implementing the
corrective action plan.

Table1 Status of audit follow-up reports released through the MSA module in GISIS

Number of Number of audit Complete ratio

Overdue or
audit reports follow-up reports of audit follow-
not
completed completed up report
2018 20 0 0% Yes
2017 22 15 68% Yes
2016 19 19 100% -
(Source: GISIS, data as of 4 May 2022)

Discussion

Audit follow-up is an essential requirement of the closed-loop management of IMSAS

7 The audit findings and observations provide a reference for Member States to
subsequently improve their performance in the implementation of the mandatory IMO
instruments and to complete corrective actions in order to comply with the audit standard,
which is also a requirement of the closed-loop management. Mandatory audits help to promote
the standardization and coordination of the implementation of the mandatory IMO instruments
by Member States, to reduce ambiguity and improve the efficiency of implementation, and to
achieve the Organizationʹs mission of promoting safe, reliable, environmentally friendly,
efficient and sustainable shipping.

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8 Upon completion of corrective actions, it is necessary to conduct a document-based

audit follow-up, where possible, to verify the implementation of the corrective actions. The audit
follow-up process includes a brief report, review of information and evidence provided by the
Member State covering relevant elements of the progress of implementation of a corrective
action plan. The requirement of the closed-loop management cannot be achieved without
follow-up audits.

9 In accordance with the provisions of the Procedures for the Audit Scheme (resolution
A.1067(28), annex, part II), the process of audit follow-up is crucial as it promotes the
consistency and effectiveness of the implementation of the applicable IMO instruments and
assists Member States in enhancing their capability as flag States, coastal States and
port States.

The review of the audit follow-up would be highly beneficial for the Member States to
learn from typical lessons

10 The review of the completion of audit follow-up is an indispensable part of the Audit
Scheme. The Organization has always attached great importance to the review of the outcome
from audits. Since the fifth session of the Sub-Committee, more efforts have been made to
analyze the CASRs aiming at sharing experience. However, with the lack of a summarized
review containing both the status of implementation of corrective actions and the completion
of audit follow-up, the Sub-Committee cannot facilitate the learning of lessons by all
Member States from mandatory audits.

11 The lack of a summarized review of audit follow-up affects the continuous

improvement of the audit scheme. Only when the Member States fulfill their obligations under
the instruments to which they are Contracting Parties, identified problems are rectified in a
timely manner and the feedback on lessons learned is provided to all Member States, can the
role of the Audit Scheme be given full play to.
Proposals

12 In order to bring into play the role of IMSAS and to promote the effective
implementation of IMO instruments by the Member States, the Sub-Committee is invited to
consider inviting the audited Member States to share their experience in implementing IMO
instruments, in particular in implementing the agreed corrective action plans.

13 Furthermore, it is proposed to include the review of the completion of audit follow-up

on a regular basis, consolidate and incorporate relevant data in the future analyses of CASRs
and in the overall feedback to the Committees, which shall at least include:
.1 outcome of audit follow-up process and data on corrective actions left not
completed;

.2 best practices for completing the implementation of corrective actions by

Member States; and

.3 difficulties in implementing the corrective actions, in such aspects as human,

material and financial resources.

Action requested of the Sub-Committee

14 The Sub-Committee is invited to consider the proposals in paragraphs 12 and 13 and

take action, as appropriate.
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