Target Global Compliance Audit Process
Compliance audits are conducted to ensure all vendors and their factories meet the requirements of local laws, federal regulations, U.S Customs requirements and Target's policies.
***Compliance Audits are:
1. Mandatory-All registered vendors and factories are required to participate and are subject to compliance audits.
2. Unannounced-No notification is given to weither the vendor or factory in advance of the compliance audit. This allows us to see the factory on a typical day.
3. Verification of Global Compliance registration informatin-Information in BPM, including address information and contact information must be accurate and up-to-date. U.S. Customs and Border Protection required Target to know where our products are being produced.
4. Factory has up to three chances to become compliant with local laws and Target Standards of Vendor Engagement. Vendor will be required to pay for the third audit if a third audit is necessary.
Unannouced Factory Audit consists of 7 parts:
1. Opening Meeting-Auditor will expain the intent of visit and the audit process.
2. Factory tour-General Walkthrough of the factory and dorms(if applicable)
3. Employee interviews-Confidential, conducted one-to-one of in small groups.
4. Factory management interview-Review hiring process, factory rules, work schedules, and other procedures used by factory management.
5. Country of Origina review-Review production records and shipping records.
6. Closing meeting-Review any findings found during the audit with factory management. This includes detailing how to correct the issue(s) and negotiate the "correct by" date. The audit recap is signed by both the auditor and factory management and a copy is left with the factory.
Types of Audits:
First Round Audit:
1. This is Target initial audit of a factory to determine if the factory is acceptable.
2. Target pays for the first and second audits. After the second audit, if a follow-up audit is required the vendor will be charged per additional audit.
Target 3. There are a maximum of three audits
Examples of Findings found during an audit
Most common issues found in a factory during a compliance audit
1. Fire Safety, Exits and Equipment
2. First Aid equipment not properly supplied
3. Missing or incomplete personnel records
4. Payroll and time keeping system not being properly used
5. Lack of proper Country of Origin documentation-records must be maintained for 5 years per U.S. Customs and Border Protection
6. Wages-regular and overtime not being properly paid
Audit finds are reviewed with factory management at the end of the audit
Factory agrees to a specified time frame as to when issues will be corrected
Note: A factory will be unregistered and assigned Non-compliant status if one or more of the following is found during the audit:
The following are considred Severe Violations and will result in non-compliance factory status at any point in time not just after a 3rd audit. The factory would then not be able to be used for up to 3 years.
1. Child Labor2. Forced Labor
3. Corporal Punishment
4. Illegal Transshipment
or
1. Two denied audit
2. 3rd audit of the first round of audits