Is there a difference between "Recommendation" and an "OFI" in Internal Audit?

Hello friends,

I wanted to know if there is a difference between "Recommendation" and an "OFI" ...

As per our system, we categorize audit findings into Major, minor and Recommendation but in line with other concepts, wanted to add in "Oppurtunities for Imprivement (OFI)" and I thought I would be able to differentiate both terms as follows -

Recommendation - any suggested improvement in the existing system

OFI - any suggested imporvements based on industry best practices or from benchmarking.

Would I be right in my approach ?

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

SGquality said:

Hello friends,

I wanted to know if there is a difference between "Recommendation" and an "OFI" ...

As per our system, we categorize audit findings into Major, minor and Recommendation but in line with other concepts, wanted to add in "Oppurtunities for Imprivement (OFI)" and I thought I would be able to differentiate both terms as follows -

Recommendation - any suggested improvement in the existing system

OFI - any suggested imporvements based on industry best practices or from benchmarking.

Would I be right in my approach ?

Click to expand...

Why complicate the situation?

Are you saying that a Recommendation is a suggested improvement NOT based on best practice?

I'd suggest you select ONE term and not make the the system complex.

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

RCBeyette said:

Why complicate the situation?

Are you saying that a Recommendation is a suggested improvement NOT based on best practice?

I'd suggest you select ONE term and not make the the system complex.

Click to expand...

That is a very valid suggestion but just curious if some one differentiates the way I feel ...

Some of the Best Practices may include buying in new software or replacing with a new model of equipment ... all that would include cost and these decisions may have to be taken at a higher level which could take lot of time and negotiation

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

I agree with this keep it simple concept too.
First impression I had was that non-non-conformities (sorry ) are not findings, but than I have double checked in a thesaurus and actually yes, they are.
Cheers!

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

What I am used to seeing is:

Finding - something in violation of a requirement

OFI - minor item in compliance, but could be improved

COTS - Corrected on the Spot - a minor item whose symptom was corrected at the time of the inspection and does not (in itself) represent a programmatic issue

I've also seen the phrase "DeMinimus" used for minor-minor issues.

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

I would also recommend to keep things simple (though I'm not sure if this good practice would actually be backed by benchmarking). What might be a useful differentiation for the recommendations in an internal audit might be something like "close to non-conformity" and "OFI". "Close to NC" might e.g. be a process where the auditor found a few minor issues that were finally discussed as singular problems. Here it might be that the auditor feels that given more time he or she would probably have uncovered more and enough issues to show that the process is deficient or that there is the risk that in the future those issues increase resulting in a NC in the next audit.

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

SGquality said:

Hello friends,

I wanted to know if there is a difference between "Recommendation" and an "OFI" ...

As per our system, we categorize audit findings into Major, minor and Recommendation but in line with other concepts, wanted to add in "Opportunities for Improvement (OFI)" and I thought I would be able to differentiate both terms as follows -

Recommendation - any suggested improvement in the existing system

OFI - any suggested improvements based on industry best practices or from benchmarking.

Would I be right in my approach ?

Click to expand...

If you are talking about internal audits, the grading of non-conformities really has no place.

I'd suggest that you should place more effort on ensuring the content of what the auditor report is of significance to ensure that management take action. Just calling something an improvement doesn't make it an improvement in management's mind. How will your internal auditors know what is a "Best practice"? Are you going to provide training on that? Lean tools? Why would the auditors know that and not the rest of the organization? Such a path will lead to animosity between the auditors and who they audit.

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

SGquality said:

Hello friends,

I wanted to know if there is a difference between "Recommendation" and an "OFI" ...

As per our system, we categorize audit findings into Major, minor and Recommendation but in line with other concepts, wanted to add in "Oppurtunities for Imprivement (OFI)" and I thought I would be able to differentiate both terms as follows -

Recommendation - any suggested improvement in the existing system

OFI - any suggested imporvements based on industry best practices or from benchmarking.

Would I be right in my approach ?

Click to expand...

We personally use "OFI's" and leave the other terms alone. For us, OFI's are defined as:

OFI: Opportunity for Improvement - A situation where the audit evidence presented indicates that (based on auditor experience or knowledge) additional effectiveness or robustness of a process, task or activity may be possible with a modified approach.

Click to expand...

If you want to utilize a simple system, just evaluate your audit evidence against the audit criteria. Either it will be in conformity, or it will be a nonconformity. Where compelled to do so, feel free to record an OFI (Opportunity for Improvement), regardless of whether the situation conforms to requirements or not, but do not attempt to mandate what they must do for that situation - the OFI's real value is to serve as a "love tap" to help influence them in the right direction so they won't wind up going in the wrong direction any further than necessary. Also feel free to follow up on your OFI's as appropriate for each situation.

For an internal audit program, it need not be any more complicated than this.

Brian

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

We just do the OFI's, be careful not to get into the business of soft scoring audit findings.
An OFI must not be a non conformance, it is just as explained, an opportunity for improvement. Maybe simplification of a process. I would stay away from documenting recommendations, it is not the auditors job to recommend. We are to evaluate and verify conformance of the requirements. As a result, we find non conforming processes when the work doesn't meet a requirement.

Re: Is there a difference between "Recommendation" and an "OFI" in Internal Audit ?

amadisonr said:

An OFI must not be a non conformance, it is just as explained, an opportunity for improvement. Maybe simplification of a process. I would stay away from documenting recommendations, it is not the auditors job to recommend. We are to evaluate and verify conformance of the requirements.

Click to expand...

Doing things this way will not help an organization to improve beyond just staying in conformity with the established requirements. It behooves the auditor to do everything in their knowledge to inform the process owners (where known) of any possible opportunities or recommendations for improvement so they may realize any possible benefits, but then again, there is nothing saying that you can't do it the way you suggest, either....however a missed opportunity for improvement is just that.

Brian