Preparing for an Audit

GAWDA’s consultants discuss how to prepare for an audit as well
as other recent trends in the gases and welding industry

By Tom Badstubner, Marilyn Dempsey, Michael Dodd, Rick Schweitzer and Steve Guglielmo

The GAWDA Consultant Program is a GAWDA member benefit that is included as part of your member dues to the association. It is consistently rated as one of the most valuable member benefits that GAWDA provides. Between the four of them, GAWDA’s consultants bring more than 150 years of industry-specific experience to the association.

For this issue, we spoke with the consultants about a variety of topics, including emerging regulatory trends in the industry post-COVID, how to prepare your company for an audit as regulatory agencies begin to ramp inspections back up, and things to be on the lookout for through the end of 2021 and into 2022.

Thank you to Tom Badstubner, GAWDA’s FDA and Medical Gases Consultant, Marilyn Dempsey, DHS, EPA and OSHA Consultant, Mike Dodd, DOT Consultant, and Rick Schweitzer, Government Affairs and Human Resources Consultant, for lending their time and expertise to discuss these important topics. The following is a lightly edited transcript of that conversation.

Welding & Gases Today: Have you seen trends emerging in the last few months that impact GAWDA members, now that companies are back in the office and returning to a sense of normalcy?

Marilyn Dempsey: I think that people are looking more at progressing their business. They’re cautious, because COVID is still out there, but there are questions that are beyond COVID.

Rick Schweitzer: I’ve gotten a number of members asking about how to deal with employees who simply refuse to take the COVID vaccine. How do you treat them in the workplace? It presents some tricky legal and, really, morale problems for employers. If someone doesn’t have a legitimate medical or religious reason for not getting the vaccine, it’s clear, legally, that you can terminate that employee. But you might not want to. In some cases, you might end up terminating 30% of your workforce.

So, going back to the basic standards of isolating people, letting them work remotely, making them wear masks, although sometimes if people don’t want the vaccine, they also don’t want masks. Just trying to keep employees following basic hygiene protocols. 

Marilyn: Tom shared with me a CGA survey result. They took a survey with more than 50 CGA members and they found out that there are still significant mask requirements;

50% require some employees to wear masks and 38% currently require masks for all employees. Most of the respondents do not require vaccinations against COVID-19 as a condition of employment. But 55% are encouraging and/or incentivizing the vaccination. Business-related travel is restricted for nearly 75% of those surveyed. Most organizations do not require employees to quarantine or test after business travel unless they suspect that they have been exposed to COVID-19 or develop symptoms. And, when asked about their operational impacts, 70% of respondents said that the Delta variant has no significant impact on current operations. Among those who did report concerns, they said that re-introduction of COVID-19 screening, PPE and mitigation protocols to comply with updated CDC guidance might be coming up. Staffing issues and related interruptions of work are a concern, especially with the possibility of delayed availability of parts, travel restrictions and heightened travel precautions. This is directly from the CGA survey.

Tom Badstubner: Are we seeing anybody that is requiring COVID tests instead of vaccines?

Rick: Not in this industry. I’ve heard of other companies in other industries say that you either have to have a vaccine or a negative test within 72 hours, sometimes even for customers. But I haven’t seen that among GAWDA members.

WGT: So, obviously I’m not a doctor or a legal professional, but I assume that companies are allowed to require some sort of proof of vaccination? Is that based on the honor system? I had always thought that medical information was protected in some way and that you weren’t allowed to ask?

Rick: The EEOC has indicated that it is acceptable to require vaccination. And to require vaccination implicitly means that you have to have some proof of vaccination, which is typically the card that you get once you’re vaccinated. It’s not a HIPAA violation because HIPAA does not affect private employers. It’s not an ADA violation, except in very limited circumstances when somebody has a legitimate medical disability. And basically, it’s not an equal protection violation or a fourth amendment violation because unvaccinated persons are not a protected class.

WGT: How about in the non-COVID arena? Are there any kind of common issues or questions that you have been getting?

Mike Dodd: I’d say a common theme that I’m seeing in the last several weeks have been a lot of clearinghouse questions. Here’s a program that has been live for over a year and a half and I’m amazed at the number of calls I get like, “How do I get registered?” or “I don’t think I’m registered” or “How often do I have to do these queries?” So, I get the impression that people are finally getting back to work, getting back to something more normal. And now, they’re starting to get back into things like compliance issues. The thing that is coming to the top of their heap at the moment is the clearinghouse.

Rick: I also wonder, Mike, if, come August 31, if the COVID exemptions for CDLs and medical certificates are finally expired, if we’re going to see a bunch of people who are trying to get their CDLs, and medical certificates renewed as well.

Mike : Oh yeah. I haven’t had that thrust yet, but you’re right. There’s going to be a lot of people coming due. There’s a piece of me that thinks that it’s just certain areas that have held off. Most of the people I’ve been working with it seems like they’ve been normal and getting their licenses and med cards. No issues. But maybe it’s just some areas that have been really tough. Maybe the New York city area. But, here in the Midwest, I’m working with people and nobody has had any problems at all.

WGT: Along those same lines, there was some news out of Washington last week (editor’s note: this interview took place on August 17) as the long-rumored infrastructure bill finally did pass the Senate. We’ve been talking about it, it seems like, for four years. Now that it has, functionally, can you talk about what it means for GAWDA members?

Rick: The first thing to note is that, as of now, it has only passed the Senate. It has not yet passed the House. A separate highway and infrastructure bill has passed the House, but that is now off the table. So, Nancy Pelosi has to get this Senate bill through the House, but she also wants to tie it to this $3.5 trillion budget bill that they are putting together over the next several weeks in the Senate. I don’t know if she’s going to be able to do that, or not. They need all 50 of the Democratic Senators to vote in favor of it to get it through the budget reconciliation process and I’m not sure if several Democratic Senators will go along with it.

But let’s assume that it does get passed. The Senate bill right now is a five-year bill. It’s about $1 trillion in spending. There is $110 billion over five years for roads and bridges, which is one of the benefits of it. Presumably, there will be money to improve highways in the country and to fix a lot of bridges that are now deficient. There are no new taxes in this bill. Fuel taxes are not going to go up. But there is a pilot program for a vehicle miles traveled tax where they’re going to take volunteers of both automobile owners and commercial vehicle owners, and anybody that operates trucks or buses. They will be eligible to participate in this voluntary pilot program just to see if a VMT would be an effective replacement for the gasoline and diesel fuel taxes at the federal level. That is going to take several years probably, but the idea is that, eventually, for the next five-year bill for highways that we’re probably going to get rid of the federal fuel taxes and replace them with a vehicle miles traveled tax. 

The good news about this bill is that there is no provision in there mandating that DOT go back and look at the hours-of-service changes that it made last year. So, things like the short-haul exemption, which allows companies to operate 14 hours in a 150-mile air mile radius and be exempt from VLDs and driver logs and the 30-minute break requirement. Those are going to stay in place, assuming that this bill does get passed. There is also no review of the effectiveness of things like exemptions and exceptions, including the short haul exception.

One of the bad news provisions is that the Congressional Budget Office has said that about $256 billion out of this spending is unfunded. The Democrats said that this whole bill would pay for itself, and it clearly doesn’t, so it will just add to deficit spending over the next five years.

But, all in all, I don’t think it’s a terrible bill. It did get bipartisan support in the Senate. They got 19 Republicans to vote for it. The final vote was 69-30. So, I think that if Nancy Pelosi can separate it from this $3.5 trillion bill, this will pass. The question is the politics right now.

Mike : When Rick says that the hours of service are not going to be looked at or adjusted, that is a big deal for our membership. The current change of rules for the 14 hours and the 150 miles was a really big plus and benefit for our members. So, I’m glad to see that that is not going back to the way it was.

Marilyn: This doesn’t have to do with the recent bill, but I have noticed that there is a bit more activity with inspections.

Tom: I’m seeing the same in state and federal FDA inspections. The activity level is still below the pre-pandemic inspection frequency.

WGT: Is that a function of things starting to get back to normal, or do you think that something else is driving that?

Tom: At least in the FDA’s case, it’s just that things are getting a little bit more back to normal, and they’re contracting with state agencies more than before to do the local inspections. It’s not burdensome, but we are seeing more and more local inspections.

WGT: I know you’re having the Professional Compliance Seminar in October, and this is going to be the theme of the Seminar. Now that it seems like audit activity and inspection activity is on the upswing, a topic that I think that everybody can speak to is how do you excel in an audit? What are some good best practices that GAWDA members should keep in mind when the inspector is knocking at the door?

Tom: By far, the best time to prepare for an audit is before the audit. That’s the time to get your files and processes in order. I think that a good management tool is an internal audit or “mock audit.” We have sample internal audits for food, for drugs, and for devices that the members can use to check their own compliance. During the internal audit, you’ll find if there are any gaps in training or in calibrations or in any kind of testing, or if your review of records should be strengthened. In summary, a periodic internal audit is the first priority, and it may trigger other actions that will help assure your ongoing compliance. 

Mike : To add to that, one of the things that we as the consultants do is that we emphasize these audit processes at least annually. Because we know it’s a big deal. Our upcoming webinar that we’re having in October is going to really emphasize what to do when the respective agencies walk in the door or if they do remote audits. We’re still getting a lot of DOT remote audits.

And one of the things that I wanted to emphasize is that we have a lot of new compliance people. I never remember seeing as many new compliance people in one year as I’ve seen in this past year. So, for a lot of them, this is going to be their chance to know what’s going to happen before it does happen so that they will feel a lot more comfortable once it does happen. 

And then the other thing I really wanted to emphasize to the membership that is reading this is that we consultants have a lot of tools and a lot of things to give to people to prepare them in advance and to help them with it and we’re always here and available when they’re there. On the phone, in person, doing remote. We are on call to help them through it. So, when they ask a question, they might not exactly understand the question, we can turn around and put it in simple English and say, “Here is how you best reply” or “Here is what they’re looking for.” Usually that makes things go so much smoother. So, they need to rest assured that they’re not going through this alone and that we’re here to help them through it.

We really prefer helping them before the audit. That’s always the best. But we also do help a lot of them during the audit. The one I always hate is the one where the auditor has been there, they’ve audited and now they’ve sent the penalty letter. We didn’t even know about it. We didn’t have a chance to help them with an action plan or help them prepare or to promptly respond to show that they’re concerned. They’ve gotten the letter, which means, “I guess we didn’t get your attention, so here is a fine.” And now it’s almost impossible for us to help them reduce it or help them look better. That’s the one we always hate to get. 

Rick: And when we get notice of one or more violations, whether it’s at the pre-penalty stage or even responding to a proposed penalty, Mike and I always tell them that what DOT, especially, is interested in seeing, but I think this goes for other agencies as well, is not just that you have fixed the immediate problem but that you’ve put management systems in place to ensure that this does not reoccur. They want to make sure that this is not just a Band-Aid but it’s a wholesale change in your culture, in your training programs and that it eliminates the possibility of this coming up again.

Mike : One of the things we also emphasize is that it’s not just a fix, we want to make sure it doesn’t happen again. But remember, if they come back later and they’ve been known to come back six months to one year later to do a follow up, if you told them that you fixed it, but you didn’t fix it, it now gets labeled what they call a “willful violation.” And those penalties go up about ten-fold. They take no prisoners. Their attitude is, “we didn’t get your attention, or you lied to us. So now we’re going to make things more difficult.” So, we really emphasize that you fix it, and you make sure it stays fixed. If they come back in again, let them find something else. Don’t let them find the same thing you said you fixed.

Rick: Even if they find something else, your prior violations are still going to work to increase the penalty on the new violations because you’ll be a repeat offender. But it’s not as bad as finding the same violation twice in a row.

Marilyn: Preparation is the key. Getting your files together. Making sure that your training documents are complete. Making sure that you’re completing all the required training. Not just hazardous material, but hazard communication. And the emergency response plan is up to date. There’s a check list on the GAWDA website (Oct 2019 Safety Organizer). Also, review your state regulations, especially with the new COVID regulations.

As Mike and Rick pointed out, corrective actions are something we can help with. And it’s nice when we can help with those corrective actions before the inspection, but if you get an inspection, you need to take corrective actions. The corrective action must be a program; not just a flavor of the month, where we stick something in, and think everything is magically fine. The change must be a commitment and adopted into the culture.

Rick: If you’re going to retrain, don’t just retrain the people at one location. You have to retrain everybody who is in a similar situation at your company. If you have multiple locations, have a comprehensive retraining program so that everyone gets the same message.

Tom: To build on that subject, the FDA has found a violation at one location and investigated other locations for the same non-conformance. For example, a company receives an FDA Form 483 (Inspectional Observations) at one location for testing procedures. And then the FDA finds a duplicate violation at a second location. This can turn into a more serious compliance citation (e.g., a Warning Letter).

One other suggestion, particularly for FDA investigation responses – We have seen enough FDA audits that we have developed a highly effective template for responding to the agency. We recommend that members contact us after the inspection with the results. We can share the standard responses that we use for potential violations. We want to assure that the member is not under pressure to comply in an onerous way that sets precedent for other members. So, we have standard responses that have assisted members using industry standard procedures.

Marilyn: Another thing you might want to consider is when you hear that one of your customers was inspected. Recently, I‘ve received calls from a couple of members whose customers have been inspected and the inspection started to creep into their business. The emphasis right now is on COVID inspections, especially of medical facilities. That can flow over onto you because they look at the whole supply chain. So, if your customers are being inspected, it’s not too far-fetched to think they may come visit your facility

WGT: A few of you have touched on it, so I wanted to bring up the Members Only website. What kinds of documents are on there that will help members do those pre-audits and internal preparation? 

Marilyn: The Safety Committee just completed a training program for different people. For loaders, drivers, fillers, admin, sales. It’s a great source to find out the things that you really should train on. That’s one place I would look. There are different training programs on there that you can go to, so you don’t have to reinvent the wheel. Mike has a great driver training program on there.

Mike : Other things we’ve got are the Safety Organizers, which are our monthly topics that we’ve written on. We’ve got nine years and over 100 issues of DOT topics, FDA topics, etc. And almost all of those will be individual, specific topics that are part of the big audit scope. And I’ve also, about once every year or two, I’ll put something out about the DOT record keeping system and here are the things you might get audited on. I’m sure Tom does the same thing. He does it in almost every monthly issue about what you need to do to stay FDA compliant. We are providing a lot of resources that people can see it, read it and use it.

WGT: Last question before we go, this is the last issue of 2021. Anything that is on the docket or to be on the lookout for the rest of 2021 and the early part of 2022?

Mike : We’ve been really emphasizing that the new driver entry program is scheduled to go into place next February. I’m really keeping my fingers crossed that, at the last minute, there will be enough outcry that they will delay it again because I think it’s going to pinch down on the supply of available drivers. But we can’t bank on that. So, I’ve been telling all of my members every chance I get when they’re talking about a new driver, please go get any potential drivers CDL’d, HazMat Trained, and anybody who needs to upgrade from an A to a B, get that done now, before February, because they can do that at a relatively low expense. But if it does go into place on February 7, it’s going to require them to attend certified schools and the expense is going to go to thousands of dollars per license. So, we’ve been doing our best to tell people in advance, be prepared for this.

Marilyn: Remember, compliance filings are due (OSHA, EPA) within the first quarter of the new year.



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