1. FAIRTRADE TRAINING GUIDE FOR SMALL FARMERS’ ORGANIZATIONS
Developing and implementing Internal Control Systems with a focus on Fairtrade Standards
October, 2017

2. What do we mean by Internal Control System?
An Internal Control System (ICS) is a system in which you behave like a certifier and its auditors.
→ You check yourselves to make sure that you are all meeting the Standards
→ You find out the problems yourselves
→ You make plans to put them right and you organize corrective measures for farmers who are breaking the Standards

3. Why do we need an ICS?
The people who buy your product want a guarantee about its quality. How the product was grown and how the people and the environment were treated is important to these customers. An ICS helps provide a part of this guarantee.
The better your ICS is, the lower your inspection costs might be, because auditors will spend shorter time when auditing. The ICS helps FLO- Cert get the right answers quickly.

4. Why do we need an ICS?
Having an ICS means that you take responsibility for your organization.
Once your ICS is functioning, you will be more organized and more efficient.
Your ICS can be used to manage many certifications at once, such as organic…

5. How to Approach your ICS
As you begin to think about your ICS, keep the following basic goals in mind:
→ The members of your organization must understand what the ICS requires of each of them
→ You must be able to communicate your ICS to the auditor and the certifier.
→ Your ICS must be linked to the different parts of the Standards
→ Try to prioritize your tasks.

6. Who will make your ICS happen, and how?
→ Appoint or elect 2 members of your organization who are not Board members
→ Write down how the Internal Control System is functioning, by specifying the roles of the Internal Controllers.
→ Provide guidelines or training to Internal Controllers about their roles: verifying and recording members’ compliance with Cooperative rules & regulations and Fairtrade standards, communicating the results of the Internal Control to the Board and the General Assembly for corrective measures.
→ Providing Internal Control checklist to Internal Controllers

7. Who will make your ICS happen, and how?
→ Explain to all members during a General Meeting, the mechanism of ICS → Ask members’ agreement to participate in the implementation of the Internal Control System

8. Required ICS job skills and quality
Ability to organize people in group meetings both small and large;
Knowledge of how to grow the crops produced by the organization’s members
Ability to record in writing findings during physical inspection and transcribe results of interviews.
Commitment and availability

9. Roles and responsibilities of Internal controllers
Internal controllers must ensure that their roles are in accordance to article 56 of the Cooperative Act, including:
 ensuring that all the books of the society are up to date at all times;
 carrying out inspections of the money, stocks, books and other assets of the society;
 ascertain the authority and validity of all expenditures, payments, loans and advances, as the case may be; and
 examine the accounts of the society at regular intervals and ensure that all transactions of the society are properly recorded in the respective books, accounts and other documents.

10. Roles and responsibilities of Internal controllers
• Internal controllers conduct interviews of members, field inspections to verify compliance with Fairtrade standards.
• Internal controllers review the records of the Cooperatives if they are in line with the Cooperative Act and Fairtrade standards requirements.
• Internal controllers write inspection report and present their report to the Board and General Assembly of the Cooperative who will take resolutions on follow up activities.

11. How to conduct Internal Control?
For the Board:
 Document reviews (minutes, Plans & reports…)
Interviewing Board members
Training & training reports
For members
Physical inspection of farm
Interviewing members

12. How do members participate in the Internal Controlling System?
Members are checking whether agreed Plans were achieved or not, and discuss about them with the Board or during General Meetings. Plans include environmental plan, Fairtrade Development Plan.
Members are participating in identifying the risks of non-conformities with the standards.
Members are participating in defining and implementing measures to correct non- conformities detected during Internal Inspections.

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