Developing an In-House Audit Program

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Developing an In-House Audit Program

• February 28, 2006
• Judy B. Yorke
• Yorke Engineering, LLC
• 949-248-8490 x25
• JYorke_at_YorkeEngr.com

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Developing Your Audit Program

• What is an audit program?
• How do I put together an audit program?
• strategies
• audit team
• checklists
• auditing

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Why do I need an audit program?

• Annual Certification responsibilities
• Citizen suits
• Agency enforcement
• subject to prosecution by both local and federal
  agencies
• administrative, civil, and criminal

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Preventing Problems
Make sure your responsible official is
comfortable
Avoid fines and citations
Why do I need an audit program?
Meet the compliance certification requirement
Make sure your facility complies with
regulations
Plan corrections, additions, improvements to
your permits
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Whats the Bottom Line?

• An great environmental audit will
• Improve plant profitability, by
• Lowering compliance costs, and
• Increasing operating flexibility.
• Lower compliance liability, by
• Correcting problems,
• Assuring due diligence for certifications.

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What an audit is or is not!
An audit is

• Systematic
• Demonstrates compliance
• Rigorous
• Critical to planning improvements to your
  compliance program

But an audit is NOT Confidential
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Setting up an Audit Program
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Putting Together an Audit Team
Environmental Staff
Plant Personnel

• Detached and objective
• Less familiar with plant
• Ask Why?
• Understands requirements

• Critical to day-to-day compliance
• Knowledgeable about plant
• Understands impacts of imposed requirements
• Has ideas about improvements or changes needed

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Finding Applicable Regulations
Agency Policy Statements
California Health and Safety Code
Gas Company Audit Checklists
Local Agency Rule Books
Federal Register
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Developing Audit Checklists - General Requirements
Involve the audited facility
Audit Checklist
Involve the audit team
Include verification methods
Build in documentation methods
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Developing Audit Checklists - Content
Audit Checklist
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Developing Audit Checklists - Content
Audit Checklist
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Developing Audit Checklists - Content
Audit Checklist
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Developing Audit Checklists - Content
Resources Needed

• Text of regulations
• Permits
• Working knowledge of plant
• Past compliance information
• Company policies
• Back-up resources
• Legal
• Technical

Audit Checklist
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Developing Audit Checklists - Content
Audit Checklist
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Developing Audit Checklists - Ongoing
Audit Checklist
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Conducting an Audit The Process
Get familiar with plant
Check paperwork
Interview plant personnel
Test conclusions
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Conducting an Audit The Process

• Build rapport
• Use everything monitoring data, reports,
  interviews, inspections, instincts
• Exhaust all lines of inquiry
• Verify major findings
• Document what you checked, what results were
• Document what allows you to determine compliance

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Conducting an Audit Items to Check
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Briefing the responsible official

• Build rapport
• Focus on facts
• May need to explain regulations
• Develop solutions together

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How should past noncompliance be treated?

• EPA policy
• Certify to ongoing, not intermittent, compliance
• Some historical violations have current
  implications

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Must a source disclose noncompliance?

• Compliance plan required with permit application
  - so audit early!
• May need variance to make ongoing certification
• Other reporting requirements
• breakdown conditions
• reporting requirements
• may need a permit or variance

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Preparing a Compliance Plan

• Need for a compliance plan
• Helps avoid smoking gun
• Required by Title V
• What to include
• Specific regulatory citation
• What actions will be taken to achieve compliance
• Date at which compliance will be achieved
• May need to get variance
• May need permit application

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Ongoing Compliance Assurance
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Ongoing Compliance Assurance

• Frequency
• Meet Title V requirements
• consider results of past audits
• complexity of operation/likelihood of problems
• may want to do spot audits
• consider EPA audit policy
• Updating checklists
• make sure regulations havent changed
• first one after Title V application is completed
  make sure all your permit conditions are included

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Making Compliance Second Nature

• Build Auditable Systems
• consider setting up internal systems to make
  auditing easier
• regular recordkeeping
• regular inspections and logging of inspections
• Management Attitude
• Audit protects company, employees
• Avoid scape-goating

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Making Compliance Second Nature
recognize and reward clean audits
educate staff on Title V
recognize/reward identification and correction
of noncompliance
responsibleofficialobligations
Get plant people on board
recognize and reward just doing audits!
explain penalties
give staff training and time to
maintain compliance
give them time to audit
Staff responsibilities
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Commitment to Assistance

• The Gas Company is Committed to Assisting Our
  Customers Throughout the Title V Process Call
  for Questions or Assistance!
• 562-803-7428