Environmental Auditing: Preparation and
Procedure
Jennifer Calnen
GZA GeoEnvironmental, Inc.
Overview – Environmental Auditing
Benefits and Considerations
Audit Preparation
Audit Process
Data Management and Reporting
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Environmental Auditing
Two general types:
Internal Audit Programs
Conducted by a company/business entity
Assess compliance with internal policies and programs as well as regulatory programs
External Audits (Regulatory Agency)
Conducted by regulatory inspectors
Assess compliance with local, state or federal regulations
Either Type can be Planned or Unannounced
Focus Today is on Internal Auditing
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Environmental Auditing – Why?Internal Audits
Benefits Assess effectiveness of internal company policies and programs
May provide a ranking system or priority listing of where to focus resources (media/new regulatory issue/business unit)
Identify compliance gaps (and proactively fix them)
Lessen or avoid liability – use of audit privilege
Identify benchmarking opportunities – save costs, share effective compliance support tools
Educational tool for management, raises awareness in company
Meet the requirements of an enforcement order
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Environmental Auditing – Considerations
Consider ahead of time:
Audit may reveal issues that are unknown and/or chronic
Correcting identified audit findings may be costly, and may need to occur immediately
Audit privilege programs often evaluate the timeliness of action. If corrections are not timely it may affect the protections provided under audit privilege
It’s important to work with legal counsel
for these reasons and more!6
Environmental Auditing –Facility Preparation“Failure to Prepare is Preparing to Fail”
Under the direction of Counsel (if possible) verify that any audit notifications have been submitted, as required for Audit Privilege Protection.
Use available resources (on line, internal) to prepare for a pre-audit of your facility
Discuss with peers the findings that arose from audits
If available, use internal “Lessons Learned” documents
Many state agencies will publish support documents listing common types of audit findings.
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Environmental Auditing –Facility Preparation If possible, use the two weeks prior to a scheduled audit at your
facility for focused preparation
List all areas, business units, departments, media, etc. to be audited. Assign a best-guess time frame to conduct your own mini, internal “organizational review”
Divide and conquer - systematically
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Environmental Auditing –Facility Preparation Inform management of any perceived weaknesses, if appropriate.
Transparency is generally appreciated.
Refrain from altering or recreating documentation or supporting data without prior discussion with legal counsel.
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Environmental Auditing –Facility Preparation
Failure to Prepare is Preparing to Fail…but over-preparation is a killer too!
Preparation is key… but don’t “over-prepare”
Let facility conditions reflect your daily set-up so the audit is a reflection of your practices.
If all waste has been shipped off site, auditor can’t review labeling and storage practices, etc.
Staying up all night to collect waste, label containers, or create spreadsheets may have a downfall!
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Environmental Auditing –Auditor Preparation
Auditors must prepare also
Determine what regulatory programs apply (LQG/SQG, Title V, NSR, MACT)
Obtain copies of documentation in advance where possible (permits, NOVs, company policies, blank inspection reports, facility layout)
Develop a checklist; some available on-line (DEQ has RCRA audit templates). Be prepared to make dynamic changes
Draft a schedule and review with facility representative (if possible).
Audit should be representative of the particular circumstances present: size of facility, regulatory programs, etc. and should be timed and staffed accordingly.
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Environmental Auditing – The Process
Audit Day: Facility/Company Representative:
Introduce audit team to environmental team
Review safety protocols for the facility, ensure safety gear available
Review process layout/floor diagram
Explain communication protocol on the plant floor and during record review
Define policies in terms of access, photographs, copies of records, etc.
Request a closing meeting, ask for an estimated time
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Environmental Auditing – The Process
Audit Day: Auditor:
Explain objectives of audit
Discuss the scope and schedule of the audit:
Review schedule intentions (plant walk first, records second)
Review the media being audited (air, RCRA, multi-media)
Discuss the areas to be audited (basement, construction, HR/records)
Define (confirm) the time period under review (1-yr, 3-yr, 5-yr look back)
Discuss others that might need to be involved (shifts might impact schedule)
Explain process for reporting findings – verbal, written
Discuss closing meeting, provide an estimated time, identify individuals attending
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Environmental Auditing – Surprise Audits
Surprise/unannounced audits do not afford an Environmental Manager/Specialist time for preparation and scheduling
Consider developing a Surprise Audit Protocol
Basic plan put into place for surprise/unannounced audits (internal or agency)
Who will be notified (priority listing)
“Auditor wears orange” – OR – “I wear orange”
Put thoughtful organization into filing and paperwork. Separate and label files which are privileged and confidential, company confidential, or company policy
Practice your plan!
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Environmental Auditing – The Audit
Generally there are three parts to an Audit: Site Walk
Document Review
Interviews
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Environmental Auditing – Site Walk
Site Walk
Reconnaissance of facility building(s) and grounds, may include:
Walk through of the entire process flow, points of generation for waste and emissions
Review of areas under construction, restricted areas, low/high traffic areas
Walk (or drive) of Property
Opportunities to investigate container management, storm water impacts, general housekeeping practices
Review of Support Activities
Maintenance operations (painting, woodworking)
Garage and repair areas
Basement and storage areas
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Environmental Auditing – Document Review Document Review
Review of documents may include: Air permits and required records (monitoring, emission calculations,
calibration records, maintenance records), State Fee Emission Reports
Agency Correspondence (NOVs, NSPS/MACT submittals, Inspection Reports, Asbestos notification)
Waste inspection records, waste profiles, manifest logs
Tank inspection records, release detection, integrity tests
Training Records
Wastewater permits, monitoring reports, analytical results
Contingency Plans
EPCRA (Tier II, TRI submittals)20
Environmental Auditing – Interviews
Interviews Planned Interviews
Environmental Manager/Specialist is generally intimately involved in providing institutional knowledge.
May need to schedule time with certain personnel (HR, Maintenance)
Spontaneous Interview
Site walk is generally interactive. Operator input may be needed to determine origin of a waste, storage of a material, etc. Determine a point of contact and understand company policy before interrupting work.
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Environmental Auditing – The Reports An environmental audit can result in an
overwhelming amount of data
Using the data supports the benefits of the audit, but must be presented in a proper manner.
Have a plan for presenting audit findings to management (verbal? written?)
Who will attend meetings? Federal Audit Privilege considers the timing for disclosure of findings to Management.
Be objective and clearly define issues.
State only the facts, not opinions. Don’t make assumptions, the data should support the audit.
Consider noteworthy items, find a positive.22
Environmental Auditing – Written Reports
Mark reports as required to maintain available Privilege
Use auditor language:
“At the time of the audit”
“Records were not able to be reviewed”
Avoid risky words: all, none, never, improperly, knowingly
Clearly define the issue, as well as the regulatory basis (citation)
Recommendations are generally requested (and helpful)
Consider the use of photographs as appropriate
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Environmental Auditing – Written Reports
Include observations
The data was available but not tabulated
Include comments based upon your experience
This finding should be evaluated in the context of the facility’s Title V Permit reporting requirements
Include audit limitations; audit is a snapshot in time.
“Conditions in many of the areas reviewed during site reconnaissance are subject to change, so the compliance status at any given time could differ from the status at the time of our visit”.
Determine mailing list
Correspondence to legal counsel may preserve privilege
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Environmental Auditing – Next Steps
Audit Closure
Most Audit Programs establish follow up procedures
ConsiderationsWho is responsible for responding?
How will responses/actions be documented?
What is the process to close out an audit/audit finding?
Should findings be scored? (Severity? Quantity?)25
Environmental Auditing – Practical Use of Audit Data
Use audit data as a beneficial tool
Identify weaknesses and allocate resources
Identify best practices
Evaluate effectiveness of internal policies
Discuss results as appropriate with environmental staff to enhance awareness
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