EPA’s Audit Policy—Nine Things to Remember
The EPA promulgated the first Audit Policy in 1995 and revised it in 2000, expanding availability, clarifying language, and conforming to Agency practices. Today, it remains a valuable option for regulated facilities to take advantage of benefits such as elimination or reductions in civil “gravity-based” penalties, no recommendations for criminal prosecution, and no routine requests for audit reports.
But facilities wishing to employ the Audit Policy must be prepared to earn the right by meeting the following nine conditions for eligibility defined in the 2000 Final Policy Statement (Federal Register Vol. 65, No.70, Tuesday, April 11, 2000).
1. Systematic discovery of the violation through an environmental audit or a compliance management system “that reflects due diligence in preventing, detecting and correcting violations.” In the 2000 revisions, EPA notes that it uses the term “compliance management systems” as a replacement for “due diligence” to update terminology used by regulators and industry “to refer to a systematic management plan or systematic efforts to achieve and maintain compliance.”
2. Voluntary discovery such that a violation cannot be identified during processes such as audits, monitoring, or sampling that are required under “a statute, regulation, permit, judicial or administrative order, or consent agreement.” To clarify, the EPA cites emissions violations discovered via required monitoring activities or violations found as the result of a compliance audit required under a consent agreement as violations that are not voluntary and thus ineligible for penalty mitigation.
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3. Violations must be promptly disclosed in writing within 21 calendar days following discovery with extensions when the 21st day falls on a weekend or federal holiday and at the agency’s discretion for extenuating circumstances. The 21-day disclosure period begins when “it is discovered that a violation has, or may have, occurred. Disclosures should be made to the EPA regional office or, when multiple regions are implicated, to EPA headquarters.
4. Violation discovery and disclosures must be made independent of government or third-party actions such as an EPA investigation or a citizen complaint or litigation. Exceptions to this may apply when discovery and disclosure are made in good faith, such as when the entity does not know it is being investigated by the EPA. The exceptions, however, apply only to civil investigations not to criminal ones.
5. Correction and remediation of violations must be performed quickly and completely and certified in writing to federal, state, and local authorities. Entities have 60 calendar days from the date the violation was discovered, although situations requiring more than 60 days or that may require a permit may be allowed more time when requested in writing before the original 60-day time period expires.
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6. Measures must be taken to prevent recurrence of discovered and disclosed violations including, but not limited to, environmental auditing and or compliance management system improvements.
7. Entities cannot receive Audit Policy credit for repeat violations, which is defined by the EPA as meaning “the same or a closely related violation must not have occurred at the same facility within the past three years.” The 3-year period begins when the entity is notified of the violation, not when the violation actually occurred. Violations occurring at a facility that is one of many in an organization with a pattern of similar violations within the past 5 years are not eligible, while newly acquired facilities will not lose eligibility for violations occurring before the new owner’s acquisition of the facility.
8. Certain types of violations are patently excluded from Audit Policy eligibility, including:
- “Violations that result in serious actual harm to the environment or which may have presented an imminent and substantial endangerment to human health or the environment,” and
- “Violations of the specific terms of any order, consent agreement or plea agreement.”
9. Entities must cooperate fully with the EPA and provide documents as needed “to determine Policy applicability,” such as Audit Reports. Criminal violations, however, will be subjected to very thorough investigations of a range of documentation and persons conducting the audit or review.