How Do You Prepare for a PHMSA Audit?—Documentation is Key!

How Do You Prepare for a PHMSA Audit?—Documentation is Key!

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is a United States Department of Transportation agency that is charged with ensuring adequate safety precautions are taken for the transportation of hazardous materials. One way they complete this job is through audits. Companies are responsible for following these safety regulations year-round and ensuring that they’re ready for their audit at any point in time, especially since audits can be conducted at random. Having PHMSA-compliant documentation is one critical component of maintaining readiness.

Who Undergoes PHMSA Audits?

Inspections for compliance are performed on companies who operate interstate pipelines, intrastate pipelines, liquefied natural gas, and underground natural gas storage. This can include “packaging manufacturers, requalifiers, reconditioners, and certifiers, shippers, freight consolidators, and freight forwarders,” according to PHMSA. 

Every team within these organizations needs to be prepared for an audit and follow regulations at all times. This includes contractors—PHMSA views contractors and employees as the same. Additionally, projects that cost over $10 million will be given priority by the administration.

What is Required for a PHMSA Audit?

A few different factors are required to pass a PHMSA audit and prove that you are following regulations year-round. Inspectors will ensure that your practices are consistent with current regulations and may inspect elements such as alignment, welding, and plans. 

Companies should also be prepared for inspectors to:

• Ask workers questions; any employee could be asked a question by the inspector, but they will never ask someone who is busy or create a safety hazard.
• Check for safety issues.
• Perform personal qualification inspections.
• Check quality.
• Ask about drug and alcohol testing.
• Ensure employees have the correct, calibrated equipment, and that employees understand how to use them.
• See if employees have the correct reports and procedures. For example, do welders have copies of the site’s Welder Qualification Reports and Welding Procedures?
• Visually inspect a pipe. They will be checking for coating, construction specification adherence, and more.

How Do You Prepare for a PHMSA Audit?

Proper Orientation

Every employee and contractor should take steps to follow guidelines and regulations continuously. However, on the day of the audit, operators and contractors must understand the inspector’s schedule and plan to deliver a safety orientation. Inspectors should also be informed of any PPE requirements specific to the area, equipment, or products they are inspecting. If a PHMSA audit happens at random, the contractor should contact the operator to facilitate this orientation. 

Documentation

Documented procedures, policies, and user guides can make a profound difference in routine safety practices and operational productivity. Your employees should be able to look up information using on-site and/or online resources at any point for daily work, questions, quality concerns, or safety issues. There should also be records of any safety or quality violations and subsequent investigations to ensure your company works on creating changes to prevent them in the future.

In addition to these day-to-day procedures and manuals, some documentation your organization should have on hand, especially for the audit, include:

• Construction Drawings
• Material lists
• Certifications
• Qualifications
• Welding procedures
• Coating reports
• Inspection reports
• Hydrotest records
• Emergency response procedures
• Damage prevention plans
• Public awareness plans
• Current safety plans, including drug and alcohol policies
• Details about performed work
• Code books
• Training procedures

Mock Audits

One of the best ways to ensure your company and employees are ready for any audits is to hold a mock audit. The mock inspector should check all the areas an actual PHMSA inspector would, and ask employees questions in the same manner. This way, if there are any issues regarding employees, safety, or quality, they can be handled immediately.

Mock audits should be performed regularly to ensure procedures are always being followed by all employees and contractors.

Never Misrepresent

When a PHMSA inspector visits your site, all employees should be polite. Conversation between employees and the inspector should be only kept to the questions asked during the audit.

However, companies should also instruct their employees to be truthful. Misrepresentation or mistakes can lead to misunderstandings. If a team member does not understand a question or doesn’t know the answer, the reply should be that they do not know and point them in the direction of someone who does. Clear communication between employees, management, and PHMSA is key to a successful audit.

What are the Consequences of a Failed Audit?

If a PHMSA inspector sees a dangerous situation on your site, it will be flagged. Any concerns brought up during the audit should be communicated to the operator and corrective actions should be taken. The inspector and PHMSA will focus on outreach and education to help ensure compliance is met if there were any errors or concerns.

However, in some cases, there could be civil penalties. A civil penalty can be proposed after being presented to the PHMSA’s Office of Chief Council. Training violations, for example, result in the minimum civil penalty of $450. The maximum for any violation is $75,000. A company can respond by paying the penalty or providing further information that can overturn the decision. 

PHMSA helps to ensure that organizations and companies are following regulations and any corrections be made in the interest of public safety. Preparation is absolutely key to performing well on the audit, achieved by having informed, well-trained employees and contractors with the resources and communication tools they need to demonstrate compliance. 

Is your documentation ready for the next audit? We specialize in helping companies like yours develop procedures, manuals, plans, employee handbooks, and more to sustain safety year-round. Start by visiting our services page!