CONDUCTING AN AUDIT

CONDUCTING AN AUDIT
Audit programs are usually tailored to meet the needs of the particular organization. An audit primarily consists of three phases: the pre-audit, the site visit, and the post-audit.
Pre-Audit
The objective of the audit should be defined in advance. For facilities without any formal environmental program, the objective may be to determine the existing compliance status. Facilities with an existing environmental program may elect to track the progress of the management system and determine how procedures are being followed by company personnel. The topics and depth of the coverage should be determined in this step.
Regulatory areas covered in an audit usually include one or more of the following categories:

• Hazardous waste management
• Spill prevention
• Hazardous chemicals and materials
• Air emissions
• Water/wastewater discharges
• Storage tanks
• Toxic chemicals, including asbestos and PCBs
• Pesticides
• Worker health and safety issues

The audit may include a review of compliance with federal regulations only or compliance with both federal and state laws. Company policies, facility manuals, and good management practices may be used as criteria for evaluation.
Formation of an audit team. The formation of an audit team will depend on the decision about whether to conduct an audit in-house, retain the services of a professional consultant, or a combination of both. Guidelines should be established for information flow.
An audit team will vary in size from one to six people, depending on the scope of the audit and the size of the facility. It is customary to select one audit team member as the team leader. The team leader manages the flow of information from the audit site to the audit team.
Selecting a consultant. Environmental consultants are often used when in-house staff does not have sufficient regulatory or auditing expertise or when a totally independent viewpoint is sought. An environmental consultant should have an established track record in regulatory compliance consulting and specific experience in auditing. In addition, each auditor should have a thorough knowledge of environmental law and regulations. Fielding an audit team with varied staff experience can be extremely beneficial.
Site notification. Audits are usually scheduled in advance with a facility, particularly the initial audit, although surprise audits are occasionally preferred, especially as a means of follow-up to ensure that the facility is addressing the issues identified in the initial audit. The team leader will normally schedule with the facility, establishing the dates, duration, and intended scope of the initial audit. Compliance documentation (such as permits) may be requested in advance and completion of a pre-audit questionnaire may be requested to allow more in-depth pre-audit planning.
Review of regulations. Each audit team member is usually assigned specific topics in advance. Preplanning may include review of pertinent federal, state, and local regulations, and any compliance documents requested in advance.
Protocol for guidelines and checklists. This step involves developing a protocol, or specific written outlines or checklists of the audit process. EPA has developed several guidance protocols.

• A detailed outline, which includes sequential steps taken by the audit team
• A topical outline, which lists the topics to be covered by the audit team, but leaves the manner in which each topic is audited to the experience and discretion of the audit team
• A detailed guide, which includes an emphasis on specific regulation requirements
• A Yes/No questionnaire, which is inquiry-driven rather than examination-driven
• An open-ended questionnaire, which involves fact-finding and recording
• A rating sheet, which involves a grading role

Site coordination. The last stage of the pre-audit plan includes arrangements for lodging, requests for working space at the site (such as a conference room), obtaining dress code information, and ensuring that other logistical needs are organized in advance.
Site Visit
In general, the on-site inspection includes a physical tour of the facility, review of inspection processes and activities that are governed by regulation, interviews with key personnel, and inspection of permits, reports, documents, files, and any other relevant materials.
Introductory meeting. Most audit visits begin with a kickoff meeting attended by the audit team, facility personnel who may be involved in the audit, and senior facility management. The audit team typically presents an overview of the audit process, including an introduction of audit team members, assignments, and the audit scope. The key facility contact will generally introduce the staff and give an overview of the facility operations, with an emphasis on the organization of environmental activities.
Site tour. A general site tour to allow the audit team to understand the layout and location of key areas is often the second audit step. It can be conducted in a vehicle or on foot depending on the site size. Site maps are very useful during tours.
Information gathering. Information regarding the management system or compliance profile is compiled and evaluated through interviews, document review, and tours. Occasionally, samples will be taken. The information gathering is guided by the protocol or questionnaire. Auditors record factual observations to support any findings in their working papers throughout the audit process.
Interviews. Interviews with the facility manager, regulatory and environmental compliance managers, first-line supervisors, maintenance and operations managers, and operators may be conducted. These interviews help the audit team:

• Understand standard operating procedures
• Uncover areas of noncompliance or past practices that may have an environmental or safety impact on the facility
• Determine levels of regulatory compliance responsibilities
• Evaluate the understanding of plant personnel regarding their environmental responsibilities

Document reviews. The audit team typically spends a significant amount of time during the audit in reviewing the environmental documentation. Examples of documents include:

• Permits
• Operator certifications
• Monitoring results and reports
• Training records
• Spill prevention, control, and countermeasure plans
• Stormwater plans
• Contingency plans, training plans, and waste analysis plans
• Biennial or other reports
• Chemical inventories
• Inspection and maintenance records

General records, such as employee lists and purchase records, may also be required to complete an effective review.
Sample analysis. A detailed site inspection may include photographs and samples. Samples may be collected from the soil, surface water, groundwater, and both indoor and outdoor air to evaluate permit compliance. The inspection can include a search for signs of contamination, including discolored soils and surface water and abandoned or leaking tanks.
Detailed tours. Inevitably, audit team members will require more in-depth inspections of selected plant areas.
Close-out meeting. Unless an audit is being managed in accordance with attorney-client privilege, the on-site phase of an audit is typically concluded by a close-out meeting with key staff to present preliminary findings. The findings are usually organized by functional area and include regulator or company references as appropriate.
Post-Audit
The audit team prepares a draft audit report subsequent to the audit. Before audit initiation, the plan for audit report review and access to the audit report should have been established. Facility personnel usually review the draft for factual accuracy, and legal counsel may review the draft for reporting obligations. It is recommended there be a quick turn-around on draft reports, as a lengthy, drawn out revision process generally leads to a less-effective audit program. The final report is issued with appropriate corrections incorporated. Some organizations prefer to have the audit data presented to legal counsel and have the report prepared and issued by the attorney.
Follow-up. Once the audit has been completed, responsibility for preparation of an actual plan is assigned. Tracking completion of all action plan items is essential to program management. Plans may be made to re-audit the facility on a periodic basis. The follow-up audit is conducted to document progress, as well as track changes resulting from new environmental regulations. In many instances, unannounced follow-up audits are an effective tool to ensure action plan items are being addressed in a timely manner.
In order for environmental audits to be an effective compliance tool, organizations must be prepared to aggressively follow up on audit findings and recommendations. Otherwise, it is a worthless, expensive proposition. Audits should not be performed unless there is enough staff, time, and money to properly deal with the results. If an organization cannot afford to do a full audit, a good alternative might be to conduct the audit and compliance in stages, dealing with the most urgent problems first and prioritizing the others in descending order of importance.
Sharing results. Often audit reports for individual facilities will not be shared with other facilities in the same company. Instead, summary documents of multiple facility audits will be produced to highlight the most common items of concern companywide. The summary documents are then circulated throughout the company, or in some instances, the summary documents are used to shape corporate training programs to ensure these issues are avoided in the future.