HALFAYA PROJECT SURFACE FACILITY

PHASE FOUR
WATER INJECTION WELLS TIE-INS IN Y2021

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 1 OF 16

HFY-CON/F&C1116-1139/01

WATER INJECTION WELLS TIE-INS IN Y2021

INTERNAL AUDIT PROCEDURE

NOTE FOR RECORD ONLY:

Any change would be found in any later stage between this
REV 0 and previous approved (with CODE A) REV B will be
EPC sole responsibility to justify such misleading, the same
will not be acceptable to PMC and lead to document invalidity

By [Link] at 4:32 pm, Nov 28, 2022

ISSUED FOR Ramesh

0 25/11/2022 Chen Jianda Tao Ji Jiang Xingke
CONSTRUCTION Krishinan

REV. DESCRIPTION DATE PREP’D CHK’D REV’D APP’D

 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 2 OF 16

REVISION HISTORY

Rev. Date Description of Change

A 22.10.2022 ISSUED FOR APPROVAL

B 15.11.2022 RE-ISSUED FOR APPROVAL

0 25.11.2022 ISSUED FOR CONSTRUCTION

 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 3 OF 16

CONTENT

1 GENERAL ........................................................................................................................................... 4
1.1 PURPOSE ...........................................................................................................................................4
1.2 SCOPE ............................................................................................................................................... 4
2 REFERENCES .................................................................................................................................... 4
3 DEFINITIONS AND ABBREVIATIONS ........................................................................................ 4
3.1 DEFINITIONS ......................................................................................................................................4
3.2 ABBREVIATIONS ................................................................................................................................5
4 RESPONSIBILITIES ..........................................................................................................................5
4.1 PROJECT MANAGER .......................................................................................................................... 5
4.2 QA/QC DEPARTMENT .......................................................................................................................6
4.3 LEAD AUDITOR/ AUDITOR ................................................................................................................ 6
4.4 AUDITEE ............................................................................................................................................7
5 AUDIT OUTLOOK .............................................................................................................................7
6 PROCEDURE ......................................................................................................................................7
6.1 GENERAL ...........................................................................................................................................7
6.2 AUDIT PLANNING ..............................................................................................................................7
6.3 AUDIT EXECUTION ............................................................................................................................8
6.4 AUDIT REPORTING & FOLLOW-UP ..................................................................................................10
7 EXHIBITS ...............................................................................................................................................11
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 4 OF 16

1 GENERAL

1.1 Purpose

Purpose of this procedure is to establish a uniform method of planning, performing,

reporting, following-up and closing of internal audit findings & recommendations in
XYNM scope for WATER INJECTION WELLS TIE-INS IN Y2021 Project and its
implementation process.

1.2 Scope

Scope of this quality audit procedure to explain the Quality Management System audit
management guidelines and methods for WATER INJECTION WELLS TIE-INS IN
Y2021 [Link] review (Pre-mobilization) audit, Planned QMS audits,
compliance verification (internal) audits and Sub-contractors audits are referred in this
procedure.

This procedure defines the various steps taken in audit planning, audit execution &
reporting and the provision for follow up audits to verify effective implementation and
closeout of the non-conformances raised in the audits.

2 REFERENCES

This procedure complies with the following contract specifications and international code:

 ISO 9000 Quality Management Systems – Fundamentals and Vocabulary

 ISO 9001 Quality Management Systems – Requirements

 ISO 19011 Guidelines for Management System Auditing

 HFY4-5165-01-QC-PLN-0001 Project Quality Plan

 HFY-CON/F&C1116-1139/01, Sec 4 Scope Of Work (QA & QC)

 HFY-FC-PM-PD-0015 Non Conformance Report Issuance and Close-Out Procedure

 HFY-GEN-GEN-SPC-0001 Specification for Quality Assurance

3 Definitions and Abbreviations

3.1 Definitions

Non-conformity: The Non-fulfilment of specified requirements in any subject such

as fabrication, inspection, documentations, etc. Also referred to
as a non-conformance.

Correction: Action to eliminate a detected nonconformity.

 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 5 OF 16

Non-conformance: Item, product, material or process does not meet the specified
requirements.

Corrective Actions: The action taken to eliminate the cause(s) of nonconformities.

Preventive Actions: The action taken to eliminate the cause of potential

nonconformities or other undesirable potential situations.

Corrective Action Request: A report to document non-conformance of process or

procedure, root cause, proposed correction and procedure,
root cause, proposed correction and corrective actions
and verification that the proposed actions have been
implemented satisfactorily.

Continual Improvement: An ongoing effort for identifying opportunities and

implementing changes to improve system,product, service
or process.

3.2 Abbreviations

List of the used abbreviations and definitions is given below:

 COMPANY: PetroChina International Iraq FZE, Iraq Branch

 PMC: Petrofac

 XYNM: Jiangsu Xinyang New Material Co., Ltd

 QA QC: Quality Assurance & Quality Control

 ISO International Organization for Standardization

 QMS Quality Management System

 CAR Corrective Action Request

 PAR Preventive Action Request

4 RESPONSIBILITIES

4.1 Project Manager

Project Manager will be the focal point and overall responsible for the implementation of
quality audits and he may delegate QA/QC manager to organize and execute the quality
audits on his behalf. Project Manager is approving the Audit Procedure, Project Audit
Plan, reviewing audit results and ensuring the timely implementation of corrective
actions.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 6 OF 16

4.2 QA/QC Department

QA/QC Manager is acting on behalf of Project Manager for the implementation of quality
audits, he will be responsible to ensure the audit are being carried-out as per the
approved audit plan & schedule. QA/QC manager will act himself or assign a certified
Lead Auditor and Audit Team Leader (Lead Auditor) for each audit. Lead auditor must
be independent from the discipline/ function to be audited and having knowledge on
activity being audited. Qualified and experienced project team members or personnel
from other projects may assign as lead auditor or subjects experts to assist lead auditor.

QA/QC Manager is responsible to prepare the audit itineraries, notifications and

communicate to auditees, auditors and other concerned personnel within the
organization at least two weeks in advance for their information and action.

QA/QC Manager is responsible for coordinating with Lead Auditor to prepare and issue
audit report in time. QA/QC engineer shall maintain an updated Audit Log in a format
attached as APPENDIX – E. Audit Report, Closeout copy of Non-conformance /
Corrective Actions Request with evidence of corrective and preventive action taken shall
be maintained.

4.3 Lead Auditor/ Auditor

Lead Auditor will be the in charge of audit to layout audit execution plan, communicate
with persons being audited, conduct audit opening and close-out meeting, to take final
decision in case of any dispute in interpreting the finding within the audit team and
submit audit reports.

Audit team leader's responsibilities includes, but not limited to:

 Ensuring that audit team members are competent to do the audit and from
disciplines to which audit to be carried-out, and that the team represents the correct
mix of disciplines;

 Gathering all audit reference documents reviewing, communicating with audit team
members, developing and approving audit checklists;

 Coordinating the audit team’s logistical requirements;

 Convening and chairing the audit opening meeting, daily audit updates and close-
out meeting;

 Leading the audit and managing the audit team and taking decision in case of
dispute within the audit team for judgment of findings.

Audit team members (auditors & subject experts) will support lead auditor to execute the
audit process, verifying & collecting evidences of audit findings, compile and report the
audit results, keep all audit support documentation. The basic qualities for an audit team
member should include individuals that are organized, conscientious, familiar with
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 7 OF 16

construction practices, observant, and possess integrity. Selection of the audit team
member is at the sole discretion of the Lead Auditor.

4.4 Auditee

Coordinate with Audit Team leader for all audit related communications, as required.
Prepare all applicable documents and records against the scope of audit. Notify all
concerned personnel to be audited and involved in the audit on scope objective and
responsibilities for each auditees to ensure the effective audit execution. Ensure all
applicable documents and records are available for verification. Ensure timely
disposition of the non-conformities observed.

5 AUDIT OUTLOOK

QA/QC Manager in conjunction with Project Manager will prepare an overall project audit
plan for entire project cycle, in line with project schedule & milestone dates. Audit plan
attached as APPENDIX – A&B. A copy of the approved Audit Plan shall be circulate to
all concerned departments and subcontractors within XYNM for information and early
planning.

XYNM and Subcontractors Project QMS will be audited at least once in an year to verify
the adequacy and effectiveness. Subcontractors and vendor/supplier audit and
performance review will be carried-out as per the criticality and nature of service/material.

6 PROCEDURE

6.1 General

The QA/QC Manager defines the specific criteria, scope, methods, objectives for the
upcoming internal audit based on the status, maturity, and importance of specific
elements in QMS.

Audits will be carried out to a defined scope and shall be as follows:

 Planned QMS (internal or external) audits;

 Internal compliance audits and reviews.

6.2 Audit Planning

A qualified lead auditor from the project or other projects of XYNM will assign as Lead
auditor. Lead auditor in consulting with Quality Manager will appoint the appropriate
audit team to ensure objectivity an impartiality of the audit process.

The lead auditor review the proposed audit program to ensure that it is consistent and
effective for the defined audit criteria, scope, methods, and objectives.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 8 OF 16

Prior to the audit date, audit team will review the quality system and process control
documentation, previous audit reports, audit findings, corrective and preventive actions
(if any) for the area being audited, NCRs or any other outstanding quality issued for the
activities to be audited.

Auditor/ Audit Team will be one individual or a group of individuals having knowledge on
area being audited, subject experts, quality management specialists, independent
consultants or personnel familiar with design and construction practices as necessary to
perform the audit and independent of the area being audited.

Audit Notification including audit itinerary and scope of audit will be sent to the auditee
department for a minimum of one week in advance. Official audit notification will be sent
to PMC/PMT for their information in advance.

The lead auditor to ensure that all audit team members are fully aware of the audit scope
and having copy applicable documents for reference. Audit team will prepare an audit
checklist with sufficient content to effectively interrogate the scope of audit. Audit
checklist should also contain questioner to ensure the effective implementation of
previous audit findings & observations, department KPIs, corrective actions request &
NCRs issued to the area being audited, recommendations from surveillance inspections.

6.3 Audit Execution

6.3.1 Audit Opening Meeting

Prior to commencement of the audit, an audit kick-off (opening) meeting shall be

conducted attending project management representatives, key personnel from area
being audited and audit team members. In this audit opening meeting;

 After a self-introduction of attendees, the lead auditor will explain the audit scope,
aim and extent of the audit including the audit method, sequence to be adopted,
audit timing, exclusions if any.

 During opening meeting auditee could ask for any clarification on audit execution,
explain the arrangements done for the audit and personnel leading audit team in
each process area, re-arrangement/shuffling of planned audit timing, if necessary
due to any unavoidable appointments and confidential information/area if any.

 Lead auditor will explain the categorization of audit findings and auditees response
requirement in each category of findings.

 Auditee, Auditor and management representatives attending the opening meeting

can express their visions and concerns related to audit in the opening meeting and
necessary action can be taken.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 9 OF 16

6.3.2 Audit Process

Onsite and/or offsite document review, records verification, audit inspections, sample
testing, personnel interviews, etc., should be part of audit process. The auditee, person
in charge of the process being audited, shall be escort the auditor during audit process.

Positive findings and observations and non-conformance shall be indicated in the audit
checklist.

For audit findings, which seems not complying with the written procedure, standard
practice or contractual requirements, shall be explained to the auditee and auditor
should collect as much as evidence such as reports, photographs etc., for evidence and
future reference, a potential nonconformity shall be filled in the audit checklist.

Auditee may provide satisfactory evidence, against the potential non-conformities

noticed during audit, before audit close-out meeting after careful review auditor can be
deleted this potential non-conformance from the audit checklist and final findings. If the
evidences provided is not conform to the prescribed requirements, a corrective action
request or observation shall be issued on the basis of criticality of the findings.

After completing the audit interviews, document verifications and audit inspections, lead
auditor to collect, and summaries audit findings from all audit team members and
discuss within the audit team to prepare a draft audit summary. All objective evidence
examined during the audit shall be documented on the audit checklist to the extent that
audit conclusions can be fully supported, particularly non-conforming work/work
processes. The content regarding nonconforming items to be brought into the audits
report shall be exact, clear, truthful with evidence and acceptable to the audited
departments.

The auditors shall complete Internal Audit Checklist attached as APPENDIX – A,

APPENDIX – C.

6.3.3 Audit Close-Out Meeting

The lead auditor is responsible for organizing an audit close-out meeting immediately
after completing the audit verification and concluding the audit findings within the audit
team. Purpose of this audit close-out meeting is to brief the audit findings in the audit to
the auditees and project management.

Contents of the close-out meeting may include, but not limited to;

 Highlight positive items and good practices noted during the audit.

 Present overall result and conclusions of the audit in such a manner that they are
fully understood by the audited organization management.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 10 OF 16

 Present specific observations and ensure that they are understood and provide an
opportunity to discus validity.

 Present the schedule for issuing the Audit Report.

 Agree upon the process for the dealing with observations.

6.4 Audit Reporting & Follow-up

Within a meaningful time frame after completing the internal audit program, lead auditor
will prepare the internal audit report and submits it to QA/QC Manager for review and
finally Project Manager will approve the audit report.

The audit report shall contain, but not limited to;

 Description of the audit activities, audit dates, list of location visited during audit, list
of departments audited and positive findings.

 Completed audit checklists together with associated audit finding notes.

 A narrative report on standard report continuation sheets, In addition to the data

reported by completion of the audit report front sheet.

 Summary of audit result including any Non-conformities and reference to any

observations issued from the audit.

 Comments on the close out meeting and attitude of the audited organization to
findings and observations.

 Recommendations regarding fallow up audits.

The QA/QC engineer will maintain the Non-conformance and Rectification Report(see
APPENDIX – D) including the details of Audit Report Number, Audit Date, Audit Report
Issued, definition (details) of audit findings.

In addition to that, QA/QC department will maintain Audit Log (see APPENDIX – E) of
all Observations issued in the audit. Audit Log will contains definition Audit Ref No.,
Description, Auditee, issued and Close-out date of all audit findings.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 11 OF 16

7 EXHIBITS

APPENDIX – A: Internal QMS Audit Schedule

APPENDIX – B: Internal Special Audit Schedule

APPENDIX – C: Internal Audit Checklist

APPENDIX – D: Non-conformance and Rectification Report

APPENDIX – E: Internal Audit Log

 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 12 OF 16

APPENDIX – A Internal QMS Audit Schedule

INTERNAL QMS AUDIT SCHEDULE

PetroChina(Halfaya)

Audit Plan No. Audit Scope Auditee Schedule

Resource Management HR Dep.
Procurement Management PCU Dep.
Document Control DCC
HFY-2023-IAD-001 Construction Dep. Jan-23
Site Construction Management
&Divisions
QAQC Management QAQC Dep.
Contract Control Contract Dep.
Resource Management HR Dep.
Procurement Management Material
PCU Dep. &Divisions
Storage & Preservation
Document Control DCC
HFY-2023-IAD-002 Apr-23
Construction Dep.
Site Construction Management
&Divisions
QAQC Management QAQC Dep.
Pre-commissioning Management Precom. Dep.
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 13 OF 16

APPENDIX – B Internal Special Audit Schedule

INTERNAL SPECIAL AUDIT SCHEDULE

PetroChina(Halfaya)

Audit Plan No. Audit Scope Auditee Schedule

Resource Management

Material Management

HFY-2023-IAD-101 Document Control Local Subcontractor Jan-23

QAQC Management

Site Construction Management

Quality Personnel Management

Measure Tools Management

Document Control

HFY-2023-IAD-102 QAQC Management Local Subcontractor Apr-23

Training and Meeting

Site Inspection

NCR/QSR Management
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 14 OF 16

APPENDIX – C Internal Audit Checklist

Checklist Ref No.:

Receiver/Contact
Auditee Auditor
person

Process clause

S/N Key Audit Points Audit Results

Audit team
Prepared By Audit date
leader
 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 15 OF 16

APPENDIX – D Non-conformance and Rectification Report

Auditee Person in charge

Auditor Audit date

Non-conformance overview:

Based on the above faccts, it is judged as ( ) non-conformance that does not comply with
clause( ) of the document( ).

Auditor: MM/DD/YYYY

Confirmed by auditee leader:

Signature: MM/DD/YYYY

Non-conformance cause analysis:

Corrective action plan:

Expected completion date:

Auditee leader: MM/DD/YYYY

Auditor: MM/DD/YYYY
Audit team leader: MM/DD/YYYY

Completion of corrective actions:

Auditee leader: MM/DD/YYYY

Tracking verification assessment:

Auditor(or verifier): MM/DD/YYYY

 INTERNAL AUDIT PROCEDURE

DETAIL DESIGN [Link].: HFY4-5165-01-QC-PD-0005 REV.: 0 PAGE 16 OF 16

APPENDIX – E Internal Audit Log

S.N. Audit Ref No. Report Ref No. Dep. or Division Issue Date Close Date Remark