Which External Auditor is Right for You?

As an internal control system (ICS), we rely on an external auditor to confer on us our legal status and certification for our farmer-partners. The external auditor is the link between us and the USDA, whose approval we are ultimately seeking. Choosing the right auditor is a very important step in the process of becoming a group of certified organic growers.

We just decided this past week on who we would go with after a few months of weighing our options (not that we were lollygagging, just being meticulous). In the end we settled on EcoCert, a company with it’s head office in France and a branch office in Burkina Faso. Maybe the strongest point to recommend EcoCert is that they regularly contract one man (Jean Pierre) as their auditor in Cameroon. JP is a native to the North West Region of Cameroon who currently resides in Douala and works out of Beau. Having our auditor (or at least a man who acts as our auditor’s representative) in country seemed like an invaluable asset. In particular, we felt this would help us to develop a long term relationship with EcoCert; a relationship that has our staff in country at the foundation. With a more remote company, we envision that most of our correspondence would be via email, between their head office (most likely in Europe) and our staff in the US, a chain of communication that would frequently bypass Philip, Cassman, and me.

Proximity was not the only consideration, of course. We expected price to be a large factor, but (surprisingly) the quotes we saw were fairly similar. With one company travel wasn’t included so it seemed lower at first, but with some quick estimations we figured they all came out to just under 3,000 euro. Another factor that weighed heavily in EcoCert’s favor was the company’s responsiveness to our questions during the ‘courting’ phase. Especially given our tight schedule for obtaining certification this year, we were keen on getting an auditor that would be prompt and showed us they understood our urgency and would help us reach our goals.

What didn’t sway us was any company’s reputation or tendency toward being strict or lax in the certification process. This consideration did come up in our internal conversations and we definitely had our biases on who ranked where in this category. In the end, what we decided was that we would hold ourselves to the same standard we imagined that the strictest auditor would expect from us and let whoever we settled on judge us on that. This suits me fine, especially as all the work I’ve done to this point has been based on templates provided by that ‘strictest’ company.

 

Next step: Get JP to Oku to do his thing. We’re through with our internal work in Oku and we’ll be finishing in Mbessa by Friday of this week. After that we’ll be ready for our first test. The idea of being audited has me a little terrified and I guarantee that in the days leading up to it I’ll be having some kind of trouble sleeping. Thank goodness I just got sent a kindle.

Internal Inspections

This week we have been working on the Internal Inspections. These are kind of the crux of what we do as an Internal Control System. The inspections are when we formally review the actions of our farmer-partners in the last year (or since the last inspection) and observe the actual state of the farm. They are also when we write the report that will be formally reviewed by our outside auditor, so we need to put our best face forward and make these things look presentable. Here’s a synopsis of how they go down:

1. The Warning

As you can imagine, there can be some frustrations associated with trying to keep to a relatively tight schedule that relies on farmers being available, but so far things have gone pretty smoothly. A few days ahead of time, I try to be in touch with each grower personally to give them a written notice that we are going to be visiting. This seems to be pretty necessary, and unfortunately it can’t be done too far in advance because not many people keep a calendar and will remember an appointment more than a few days out.

2. The Arrival

We’ve been traveling as a group of four (myself, Philip, Cassman, and Gilbert). I was very keen on having Gilbert and Cassman act as our inspectors, but I don’t think I did a good job of preparing them for the task. When we arrived at the first farm we set Gilbert up as the Inspector. It was clear pretty quickly that he was in a little over his head. Again, I take responsibility for this since the training of the inspectors was my job, and frankly, I have no business training anyone on a task I’ve never performed myself. So after our first visit I took over for the rest of the day and have been acting as the inspector since. As I’ve gotten experience I think I’ll be able to guide other people to being effective/efficient inspectors both through some 'classroom' style exercises and also hands on experience.

Before the actual inspection, we take care of some paperwork. First, we go through the Farmer Contract point by point, answer questions that arise, and get that signed. Next we review the information for the Farm Entry Forms and get the farmers to sign those as well. That is a good springboard into the inspection since the last questions of the Entry Form dovetail with the first questions on the Inspection (i.e. Are your fields the same as last year? and do you keep the same animals as last year?)

3. The Inspection

After the interview stuff is over, we start moving around. We begin with the compound, checking the storage area. Nobody has an area dedicated to organic storage yet, so preparing that (e.g. tidying up and putting a sign saying “Organic Storage Only” on the door) is going to be a condition for everybody this year. I’m glad that we have one universal condition that is pretty simple which can be used as an example for everyone in order to describe what a ‘condition’ is.

I set the date that this particular condition needs to be done as October 31. Kind of arbitrary, but also the earliest I can imagine myself getting back around to check on those things. I’d prefer to get around to check if people have done it before the 31^st because I’m not quite sure how I’ll handle it if farmers blatantly ignore such a simple requirement. I’ve already put one farmer on my bad list (note, this is not an actual physical list) because he told me he had 1 goat when he really had 2 during our initial interview. Probably doesn’t seem like a big deal, but his motivation was that he thought I’d be more likely to help him get another goat if I thought he was poorer than he is. Seriously, if you can’t trust a guy to be honest about how many goats he has, what can you trust him with?

Next we head into the fields and take a leisurely stroll with the farmer through all of the coffee fields. As we are treking the inspector is trying to complete the inspection form, or at least take notes that will allow him to complete it later. There are specific questions on the inspection form, but they can be lumped together as: Maintenance (pruning, shade, cleanliness, etc.), Erosion Control, Pests/Diseases, Weed Control, Borders, and Yield Estimate. I think that if an inspector keeps cycling through those 6 categories as they move through the field they’ll see almost anything they need to. You need tricks like this checklist to keep your senses active during an inspection, otherwise you start seeing nothing but a green blur and you're wasting everyone's time. It’s a fun challenge to try to keep yourself as aware as possible, something I used to really love about working in a greenhouse. There, you can use sight, touch, hearing, and sometimes even smell to make sure the plants are happy and healthy and that all the equipment is functioning correctly. In coffee farms, I’ve only figured out how to use sight so far (though smell seems to have it's place). 

Finally, at the end of the stroll, we ask the farmer about the yield of berries at this point relative to last year and try to get a yield estimate. This is a little ticklish since we are essentially asking the farmer how much coffee we should be willing to buy from them at the premium price. I don’t think many people get that, and I feel like we are getting more underestimates than overestimates, so I’m rounding up most of the time. In the end, it will be more important to look at the harvest records the farmers keep in order to know how much coffee we can buy as organic.

4. Paperwork

Later, I take my notes and memories and do my best to complete the Internal Inspection forms. These forms end with me making a recommendation for the farmer to be either approved without conditions, approved with conditions, or not approved. Since we cherry picked farmers from our first review of Oku, I’m finishing every inspection with a recommendation of approval with conditions.

Giant challenge ahead: Making sure those conditions get fulfilled.

I try to keep this light...

But this post is going to be a gripe. (Fair warning to my mother, if you are going to ever skip a post, make it this one)

   This past week I did a good bit of traveling. I don’t love traveling here in Cameroon; it’s part of the territory and necessary for some parts of work and if I want to see other ex-pats. The thing is, it’s dangerous, like really dangerous, and to give a fair and balanced view of what life is like here in Cameroon it is something that should be disclosed at some time.

   I travel by public transportation, very rarely do I find myself in a privately owned car, and when I do it is usually for a short trip. The different options for public transport are buses, motorcycles (as long as the road is unpaved), mini-buses, and cars. Which mode is preferred or available depends on the exact trip you’re taking: Motorcycles are the go to for travel on unpaved roads and short distances and mini-buses are the most common option between cities. Cars have the advantage of filling up quicker than either kind of bus, but are usually even more crammed. In a five passenger car four in the back three up-front is standard and when the driver is especially ‘industrious’ he can usually get one more person in by sharing the driver’s seat (referred to a petit chauffeur). It is amazing how accustomed a person can get to this kind of arrangement, it is what it is.

   The picture in this post is the evidence of the worst incident I’ve been involved in, and it was relatively mild. This happened on the road between Mbouda and Bamenda just after Santa. Had the wheel come off at a few other places (e.g. the switchbacks descending into Bamenda) it would be a different situation. Car accidents are common and people are so crammed into cars that any built-in safety devices are made obsolete. This past month, a friend from Bali was recently in an accident that led to his arm being broken and a woman losing her life.This is the kind of news that is shared widely and tut-tutted at, but that is about the extent of the outrage.

   Life is invaluable. Putting each other’s lives at risk to save a thousand francs on a trip from here to Bamenda is lunacy. That being said, have I ever coughed up the extra cash to pay the driver to only take as many passengers as they have seatbelts? No, I haven’t. But I wish that at one of the dozens of police and gendarme check-points a car will pass through in a day an officer would compel the driver to follow those laws that are definitely on the books here. Instead, any driver simply puts out a little bit of money and passes without any regard for the overloading of their vehicle.

   People at every level gripe about these issues, but they are so institutionalized that no one can imagine a way to change them (is David Simon looking for a new project?). I don’t have exact details, but I heard that the mayor or some official at about that level actually did start strictly imposing the limit on the number of passengers leaving one of the cities here in the North West (Belo, maybe?). The result was a strike by the transport workers. I’m not sure what the resolution was and maybe I should have waited til I had my details straight to even mention it, but I’ll get back to you on it.

P.S. Actually, I do take the First Class service to Yaounde from Bamenda when I can, its 1000 francs more than the other bus and everyone gets their own seat. Funnily, it’s like being on the Chinatown bus between Philly and NYC, but here it feels like being in a Lincoln Towncar.

Every Link in the Chain

   This week, as we continue in our efforts to get our operation certified as organic we need to leave the farm and head back to Bali for a few days. It can be daunting how many steps there are to certify. To be certified as Organic, a product needs to remain under controlled and certified conditions all the way along the product chain. For our case this means from the farmer to the bags of coffee sold to consumers by Mocha Joes. There are lots of steps in-between. Just listing them can be difficult, which we found out when Philip, Gilbert, and I sat down to complete a profile of our processing and exporting. When we started our estimate of how many points of control we needed was pretty low, but by the end we had a much longer list.

Farm to you: our coffee's trip from Oku to the US

   What adds to the frustration is that some of these points are under our direct control (for example, sweeping the mill between batches of coffee) while others are being handled by a company we either hire or contract to do the work (this would include most of the steps involved in shipping). In the cases where the control points are our direct responsibility, we deal with them by drafting internal documents and memorandum that lay out our procedures. To again use sweeping the mill between batches of coffee as an example, when our inspectors come they will want to see that we have a section included in our handbook describing exactly how the machines and other work surfaces are to be cleaned. They will also want to see proof that we are practically following those guidelines: in this case, maybe a sign posted just where coffee is loaded into the hulling machine that says something to the effect of “STOP!!! Is this a new batch of ORGANIC coffee? Have we cleaned to machines yet?”

   When we are dealing with steps not under our direct control, our auditors are still going to want to check on the situation. If we are lucky, some of these company’s may have experience dealing with organic products (I’m a little bit hopeful that the shipper we contract will fall into this category) and they will be happy to help us with our efforts. On the other hand, I can imagine that some companies that work as contract warehouses or packers won’t be thrilled at the idea of signing an additional contract with one of their clients and having outsiders poking around their premises.

   So while the farm is the bedrock of the whole process, the place where our coffee beans spend the best years (months) of their lives and will be nostalgic for later, it is only one part (the first part) of a long chain that we need to control in order to assure our consumers that the coffee they are drinking is 100% organic.

Advances Part II: Keeping it on the DL

   Over the last three days we distributed just about all the money we are going to be giving as advances for coffee this year. As I wrote last week, we put most of our resources into farmers who are part of our organic growing program. We figured that the best way to get this done was to convene meetings in each of the villages/quarters we are working in. Ostensibly, the agenda of the meetings was to plan for the training sessions we will have in the next several months (which in itself is an important activity that I’m happy we accomplished), but we also used the opportunity to pull some people aside and make these transactions. This kept us from either having to travel all over Oku tracking people down or advertising broadly that we were going to be handing out cash this week.

   One of our goals was to keep this activity as quiet as possible. About 90% of farmers are interested in getting an advance on their coffee at this time of year, so if it became common knowledge that we were in the process of giving out cash we would never hear the end of the demands. As you may imagine, pulling individuals aside in a crowded meeting itself provides some complications but Cassman, Philip and myself pulled it off pretty well. We didn’t make any actual plan, but we were able to get by with one or two people providing some kind of distraction before or after the meeting while the other(s) got to work somewhere a little more private. Of 23 individuals in Oku we delivered an advance to 19 along with two people who stumbled upon our ‘plot’ who we decided we were safe giving a small amount to. That leaves four that I’ll need to track down over the next week or so in order to finish up.

   There was one individual who actually turned down an advance on his coffee. I didn’t speak to him about it, but Philip tells me that he has bad feelings towards holding any kind of debt, fearing that if some misfortune were to befall him he would leave his wife or children in an uncomfortable position. Apparently he also manages his money well enough to be able to pay for school fees from his own pocket, something I really admire. This guy represents an exception to the rule.

   The more common situation is for someone to tell you about how they are suffering and that an advance would help to solve their problem. On a very personal note, this irks the heck out of me. I understand and respect the position of any business person who tries to get themselves the best deal they can, and most people view an advance payment as a pretty good deal (and from the way we handle ours, I’d say they are right), but I occasionally need to take a deep breath to keep from snapping something along the lines of, ‘How is that our problem?!?!’ In fairness to me, I never really get that close to snapping, but I am really often reminded of a story a former boss of mine (Steve) told me: A man goes into his boss’ office, sits down, and tells the boss that he needs to give him a raise. The boss asks why he needs to and the man tells him that he just found out his wife is pregnant. The boss glares at the man and yells, ‘Are you accusing me of sleeping with your wife?!?!’ I think I’ll try that story out with a friend of two and see how it goes over.