Consultants

What to Do When a Federal Auditor Shows Up at Your Door

A moderated discussion between Tom Badstubner and Michael Dodd

by tom badstubner, michael dodd and steve guglielmo

It can be scary when a federal agency shows up to your business unannounced for an audit. You can feel blindsided. But the reason that GAWDA employs consultants that specialize in dealing with these federal agencies is for exactly this moment. Your GAWDA membership includes access to these consultants at no additional expense. Make sure that you’re taking advantage of that! Companies that are proactive in working with the GAWDA Consultants are better prepared for when auditors knock on the door and will have a strong plan of attack in place for what to do once they are there. Tom Badstubner, GAWDA’s FDA and Medical Gases Consultant, and president of AsteRisk, LLC, and Michael Dodd, GAWDA’s DOT, Security, OSHA and EPA Consultant, and president of MLD Safety Associates, spoke with Welding & Gases Today about what to do when these agencies show up at your door. The following is a transcript of that conversation.

Tom Badstubner: So, Mike, what would you recommend to GAWDA members to prepare for an inspection? What can they do before the inspection to best prepare for an inspection?

Mike Dodd: They need to call or email their consultants and be proactive before they get that call. Because, usually, the call we get is that they’re either coming or they’re already here. And that’s a little bit late to really help them get through it. Oh sure, we answer their questions and we work them down through the audits, etc. But if they would just contact us before they get that call or that visit, just to get started, it’s amazing how much better they’ll do if they had just been a little bit proactive to start with.

Steve Guglielmo: How far in advance do you typically have notice that the inspector is going to come? Would you have notice to say, “Oh, now I know they’re coming, I had better call the consultants?”

Tom: Most of the time, there’s no notice. How about you, Mike?

Mike: So, like Tom said, practically no notice whatsoever. Many times, there is no notice, they’ll just knock on the door. Mine is two-fold. It depends on which of the agencies is coming. If it’s the Federal Motor Carrier people, the truck and driver inspectors, they are required to give 48 hours of notice before a formal review. But, many times, they will give several weeks of notice. The other two agencies, the Pipeline and Hazardous Material Safety Administration or the Federal Aviation Administration (FAA), give no notice. They knock on the door.

Tom: Those are the hydrotest guys?

Mike: Yes, the hydrotest people. And FAA, that visit is generated if the members are sending hazardous materials via air shipments. So many of our members have never seen an FAA audit. But when they do, it’s usually not pretty.

Tom: So, to answer my own initial question, which was what the member can do to have a better audit experience, the first thing is that the FDA has a record of your prior inspections. You should have a record too. Take a look at your previous audit reports (FDA Form 483) and make sure that there will be no repeat items. If you had previously committed to calibrating your thermometers, you should assure that your thermometers are calibrated. The second thing is, take a quick look at the things that you are required to do every month, or periodically, like calibrations and training and make sure that those things are up to date. And the third thing is, before the inspector arrives, maybe once per month, pull some fill logs and just review them and make sure they’re being properly completed. If you do those few things before the inspector arrives, you’ll have a better experience. Also, assure that there is no evidence of infestation in your plant (mouse droppings or spider webs).

Mike: I have a slightly different question. Now, what do you do when you do know they’re coming? When they’ve notified you that they’re going to visit. Tom mentioned being very proactive on an ongoing basis. I’d like to echo that. Be sure to look at any past audits, because they look very badly on repeat offenses. Because now it goes from a “not known” to a “willful” penalty. And willful penalties are ratcheted up 10 times over the others. So, it goes very badly, very fast. So, no repeat offenses. It’s easy to look at past audits to make sure that you at least have those items fixed. And then another thing that ties in with that is, if you’ve had an audit and you’ve had an item that was noted and you’ve said you fixed it, be sure you’ve fixed it. Because the previous action report that has been listed will say, “This is what we’re going to do to fix it, and this is the date we will have it fixed by.” And if they come back and find that it was either not fixed, or fixed but now it’s out of whack again, you’re back to that “willful” and things will go south very fast. I’ve seen a member that has happened to. It’s an ugly situation.

Tom: I saw it with a medical gas company (not a GAWDA member). They promised the FDA, in writing, to replace their thermometers. The FDA returned six months later and found the same thermometers. And instead of having a simple inspection, the company received a warning letter, which is a formal legal notice that you are out of compliance and they broadcast it on the internet as well. So, the FDA takes serious notice when they feel like they’ve been ignored.

Mike: It’s really important to do what you say you’re going to do and make sure that it stays fixed.

Steve: What are some common missteps or mistakes when they’re either going to be audited or when the auditor is there that you’ve seen?

Tom: I think most people don’t ask for credentials. How about your organizations, Mike?

Mike: Most of our agencies present their credentials when they walk through the door. They literally flash the badge and leave them a card. I think one of the mistakes is that they don’t keep somebody with the inspector at all times. And also, that they don’t make enough effort to fix things as fast as they tell them. The moment they hear about a potential violation, they should send somebody off to fix it and bring back the correction to show the inspector before they leave, many times it goes a very long way to making it a much better audit.

Tom: The FDA will still give you a violation but some agencies, like OSHA, may consider immediately correcting a problem to be a good-faith-effort, and it can reduce the amount of the fine.

Mike: Along those same lines, what do you think is one of the most serious mistakes a member might make regarding an audit, Tom?

Tom: Lying to an inspector.

Mike: Yup, lying to an inspector. I think one of the biggest things I see, and Tom, you probably do too, is that members don’t contact us until the audit is actually over, and they get the penalty letter. And if they had called us during the audit, we would have helped during the audit. Certainly, we would have helped them with their action plan. We would have made things much easier. But when they call us with the penalty letter, and that’s the first we’ve heard about it, there’s actually very little we can do.

Tom: Typically, I usually get the call during the FDA or state agency audit.

Mike: Well, from a DOT standpoint, I get more of those than I ever care to get. They haven’t taken it seriously until that penalty letter shows up.

Tom: I want to go back to lying to an inspector. I think that it doesn’t intentionally happen. I think what’s more common is being nervous and giving an answer that you’re not certain of. It’s ok to say, “I don’t know, and I will get the answer.” But if you give an answer you’re not certain of, and they find out that it’s different later, it looks like you’ve not been honest. Even though you’re trying to be honest and complete.

Steve: So, in an effort to be helpful and as forthright as possible, you might say something that turns out to be inaccurate?

Tom: Exactly. And also, you never volunteer information. If the inspector says, “Let me see your logs for January,” you’re under no obligation to tell him, “Hey, we lost some of our logs from December.”

Steve: One of the action steps you listed in the Safety Notice says, “Agree to the scope of the inspection before the walk through.” Is that something that is negotiable? And what are some good practices for members while they’re discussing the scope?

Tom: You know, we really don’t see that much in FDA inspections. An inspection can easily change scope if the inspector finds objectionable conditions. But it’s a good idea to ask, “What’s generating this inspection? Is this just a normal one? Or are you concerned about something?” But you’re not going to limit the FDA inspector to a certain area by asking that question.

Mike: I always ask, “What’s the purpose of your visit? Why have you come?” There are no limitations to what they can look at while they are there, but it never hurts to ask, “Why are you here?” because sometimes they’re there for the wrong reason. Or they’ve come to the wrong location. So, it’s worthwhile to ask that question.

I also wanted to tack onto Tom’s point about, “Don’t make a guess if you’re not sure.” I always tell the members when I’m doing my stuff, “Don’t give an answer off the top of your head.” Because they will hold you to that answer. So, I always tell members, “When they ask you a specific question, go open up the rules, go open up your SOP’s, open up the CGA Publications that you work under and show them the answer.” That does two things. It gives them the correct answer, and it shows them what they’re looking at, in writing, and what they’re following. And they love SOP’s and they love seeing the publications that everybody agrees are the best ones to use. So, they love seeing that it’s not off the top of your head, that you’re actually using written, published materials.

Steve: A lot of the during the inspection/walk around best practices appear to center around duplicating what the inspector is doing and documenting. Is that so when they call you later and say, “I had an inspection and here is what was found,” it’s documented? Would that be the purpose of those best practices?

Tom: You not only want to keep a record of everything that the inspector takes, you want to make another copy for yourself. So, if they ask for logs or files, you make two copies of those. One for him and one for you. That way you know exactly what they’re looking at.

Steve: So, when the report does come out, and you said often that’s the first time the member will call you, is there ever disagreement between the company and the inspector? Where the inspector claimed something happened, but the company disagrees?

Tom: We see that a lot in FDA. I’m not sure about you, Mike, in DOT, but the FDA and the State inspectors are inconsistent in their interpretation of regulations. They’ll sometimes look at a gas company and treat it like a traditional pharmaceutical company. So, they sometimes ask for unusual requests. It’s simply a matter of inspector training. You can certainly clarify things with them. You can say, “This is really not appropriate for medical gases.” We’ve had a couple cases in this last year where the inspector was adamant that we were in violation. But, when we explained our position at the district or headquarters level, our position was upheld.

Steve: Mike, we have spoken previously, and you had mentioned that half of the GAWDA membership have not utilized your services. By utilizing your services, is it fair to say that members would be able to catch most of, if not all, of these violations and have the procedures in place so that if there is a surprise inspection, they will be more prepared for it?

Mike: If members utilize the services that the consultants offer via the bulletins, our emails, our phone calls, and the things that we publish, they would be much better prepared than by doing nothing. I’ve got people who have used these resources and have walked out with perfect scores. But, many times, people don’t take advantage of our services, and even if they do, they let things get out of date with things that are supposed to be done on a periodic basis, and that’s typically when they get caught.

Steve: How important is it to be proactive and not have the first time that they’re calling you be when the inspector is literally knocking on the door?

Mike: We would love it if every member was proactive. We would love to know what it would take to get the other half of that group to talk to us. I also want to emphasize that talking to us doesn’t cost members another nickel. They have already paid for the access to us and all of the help that we’re willing to give them as part of their dues. So, really, they should just take advantage of what they have already paid for. It should be a no-brainer.

Steve: Any last words you want to leave members with?

Tom: From an FDA perspective, you’re not required to respond in writing to a Form 483 with alleged violations. However, we always recommend responding in writing. You have 15 working days to respond in order for the agency to consider your answer. We have a template that people can use to respond, and it has been very successful in helping the FDA to understand our positions.

Mike: Contact us. Talk to your consultants.

For more information on this topic, download the Safety Memo: Regulatory Agency Visit Guidelines.

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