Cross-Check Audits to Detect and Deter Fraud

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Date

Date Published: 
July 8, 2019
To ensure continued consumer trust in the integrity of the organic label, CCOF constantly looks for ways to address fraud. One method we began in 2018 is cross-check auditing of CCOF-certified operations. A cross-check is a review of audit trail records across multiple producers or handlers to compare what was reported as grown and sold as organic to what was purchased, received, or processed as organic by another operation. Cross-checks are similar to in/out mass balance. However, the broader supply chain visibility of a cross-check creates the potential for catching discrepancies or fraud that could otherwise hide.
 
In 2018 we conducted a cross-check pilot program focused on industries with increased risk of fraud. We looked at CCOF certified supply chains and identified CCOF-certified handlers and CCOF-certified growers that the handler identified as suppliers. During 2018 annual inspections for each operation, we collected records for prior crop years. When all inspections were complete, we compared records across companies to look for discrepancies in reported grower sales and reported handler purchases. While we continue to analyze our results, we currently have no evidence of fraud. 
 
In 2019 we have begun using cross-checks for investigation of potential fraud and expanded our investigations to include supply chains where both operations are CCOF-certified as well as supply chains where only one operation is CCOF-certified. When CCOF does not certify both operations, we will work with other certifiers to ensure a successful cross-check can be conducted. All CCOF-certified operations should be prepared to provide documentation of purchases and sales during annual inspections.
 
Cross-checks help CCOF gain a better understanding of supply chains and are an additional tool we can use in investigation of allegations of fraud. We believe organic fraud is rare and efforts like these will continue to keep it so.