An Introduction to Data Protection Auditing Stewart Dresner, Chief Executive Privacy Laws & Business 5th Floor, Raebarn House, 100, Northolt Road, Harrow, Middlesex, HA2 0BX ISACA, London, 22nd May, 2003

Privacy Laws & Business2 Data Protection Audit Aims (1) The aims of Data Protection Audits address the wider aspects of data protection including: –Mechanisms for ensuring that information is obtained and processed fairly, lawfully and on a proper basis –Quality Assurance - ensuring that information is accurate, complete and up-to-date, adequate, relevant and not excessive

Privacy Laws & Business3 Data Protection Audit Aims (2) –Retention - appropriate weeding and deletion of information –Documentation on authorised use of systems, e.g. codes of practice, guidelines etc. –Compliance with individual’s rights, such as subject access –Compliance with the data protection legislation in the context of other pieces of legislation such as the Human Rights Act, FOI Act etc.

Privacy Laws & Business4 Why Should We Audit? The key reasons for carrying out audit activities are: To assess the level of compliance with the Data Protection Act 1998 To assess the level of compliance with the organisation’s own data protection system To identify potential gaps and weaknesses in the data protection system To provide information for data protection system review

Privacy Laws & Business5 Audit Objectives When carrying out a Data Protection Audit in any area of an organisation the Auditor has three clear objectives: To verify that there is a formal data protection system in place in the area: the system should be documented the system should be up-to-date To verify that all the staff in the area involved in data protection: Are aware of the existence of the data protection system Understand the data protection system Use the data protection system To verify that the data protection system in the area actually works and is effective

Privacy Laws & Business6 The Audit Methodology –Methodology based on well-proven models from other sectors –Aimed at both professional auditors and non- specialists –Can be used by external auditors, internal auditors or Data Protection Managers –Two part Audit methodology consisting of: Adequacy Audit Compliance Audit

Privacy Laws & Business7 The Audit Method Audit Categories

Privacy Laws & Business8 Part 2: The Audit Method Functional Audit

Privacy Laws & Business9 Part 2: The Audit Method Process Audit

Privacy Laws & Business10 Part 2: The Audit Method Interactions with Staff Interaction with staff will occur in 2 main ways: –Staff questioning during Functional or Process Audits using the Audit Checklists –Staff Awareness Interviews via: One-to-one interviews Focus Groups

Privacy Laws & Business11 The Audit Process The Data Protection Audit Lifecycle

Privacy Laws & Business12 Audit Planning The Audit Planning phase covers: –Risk Assessment –Audit Schedule –Selection of Auditor –Pre-Audit Questionnaire –Preparatory Meeting/Visit –Audit Management Checklist

Privacy Laws & Business13 Audit Preparation The Audit Preparation phase covers: –Adequacy Audit –Confirmation of Audit Schedule –Audit Checklists –Sampling Criteria –Audit Plan

Privacy Laws & Business14 The Audit Process Conduct of the Compliance Audit The Compliance Audit phase involves: –Opening Meeting –Audit Environment –Audit Execution: Functional Audit Process Audit Staff Awareness Interviews Recording both positive and negative results

Privacy Laws & Business15 The Audit Process Compliance Audit Reporting The Audit Reporting phase covers: –Non-compliance Records –Non-compliance Categories –Compliance Audit Report –Closing Meeting –Audit Report Distribution –Audit with no Non-compliances

Privacy Laws & Business16 The Audit Process Audit Follow-up The Audit Follow-up phase covers: –Scope –Timescales –Methodology –Audit Closure

Privacy Laws & Business17 Guide to Auditing The Guide to Auditing covers : –The Role of an Auditor –Auditing Tasks Obtaining evidence Assessing the evidence –Human Aspects –Audit Techniques Basis of questions Good questioning techniques Questions to avoid Black box auditing

Privacy Laws & Business18 Guide to Auditing Practical Considerations: Layout of Interview Room Note Taking What to Take to the Audit Auditor’s Code of Conduct –Honesty –Conflict of Interest –Inducements –Confidentiality –Concealment –Professionalism

Privacy Laws & Business19 Audit Materials Part 5 includes the following: –A.Risk Assessment –B.Sampling Criteria –C.Audit Proformas –D.Meeting Proformas –E.Adequacy Audit Checklist –F.Compliance Audit Checklists: Organisational & Management Issues –G.Compliance Audit Checklists: The 8 Data Protection Principles –H.Compliance Audit Checklists: Other Data Protection Issues –J.Process Audit Checklist

Privacy Laws & Business20 Audit Proformas Eight model Audit Proformas are provided: –C.1Audit Schedule –C.2Pre-Audit Questionnaire –C.3Audit Management Checklist –C.4Adequacy Audit Report –C.5Audit Plan –C.6Non-compliance Record –C.7Observation Note –C.8Compliance Audit Report

Privacy Laws & Business21 Meeting Proformas Four model meeting forms are provided: –D.1Preparatory Meeting Agenda –D.2Opening Meeting Agenda –D.3Closing Meeting Agenda –D.4Interview/Focus Group Record Sheet

Privacy Laws & Business22 Compliance Audit Checklists Divided into 3 categories: F:Organisational & Management Issues G:8 Data Protection Principles H:Other Data Protection Issues What is covered? Checklist F covers the following : –F.1Organisational & Management Issues –F.2Documentation Issues –F.3 Key Business Processes

Privacy Laws & Business23 Compliance Audit Checklists What is covered? Checklist G covers the following: –G.1 through to G.8 - the 8 DP Principles Checklist H covers: –H.1 Using Data Processors –H.2 Notification –H.3 Transitional Provisions

Privacy Laws & Business24 Experience from using the Audit Manual Our experience from using the Manual has shown that the DP Audit methodology can: –Be applied to a wide range of organisations, public and private sector, large and small –Be applied to a wide range of business processes e.g. Recruitment/HR process Marketing services Staff subject access requests House-bound Library services Contracts with third party processors Police Enquiries re loyalty card holder Call Centre handling of customer enquiries

Privacy Laws & Business25 Case Study – Royal Mail Draft audit manual tested with 5 organisations of different kinds Royal Mail approached to take part in 1999 Planning – select an area of the organisation to be audited Address Management Centre – Postcode Address File and database of Redirection information

Privacy Laws & Business26 Case Study – Royal Mail Pre-audit questionnaire and preparatory meeting Preparation – review of DP policy, IS policies, Redirection application form, contracts for supply of data Compliance Audit – opening meeting with senior DP staff and management of AMC; check operation of DP systems; interviews with staff to establish how things are actually done

Privacy Laws & Business27 Case Study – Royal Mail Observe process from start to finish Don’t take anything for granted Report – no major non-compliance; one minor non-compliance Benefits for Royal Mail – measure of compliance; increase staff awareness; generates goodwill with the ICO!

Privacy Laws & Business28 How can DP Auditing help you comply with Data Protection Laws? Facilitates compliance with the Data Protection Act and similar laws in other countries Helps compliance with your organisation’s Data Protection System Increases the level of Data Protection awareness among management and staff Provides information for a Data Protection System review Reduces data errors leading to complaints

Privacy Laws & Business29 How can the DP Audit Manual help you? Manual can be used by organisations to form the basis of an internal audit programme User-friendly flowcharts guide you through each stage of the process Complete set of Audit Checklists and proformas provided to: –Serve as “Models of Best Practice” –Act as templates for organisations to adapt to their own requirements

Privacy Laws & Business30 Conclusions The methodology in the IC’s Audit Manual can be a very effective way of assessing data protection compliance The methodology is suited to a wide range of organisations, large or small, public or private sector The methodology can be used for external, supplier or internal audits with equal success The methodology is easy to adapt to individual organisation’s specific requirements