Preparing For Your Regulatory Inspection | Blog | MMA

Preparing For Your Regulatory Inspection

January 1, 2018
Submitted by MMA Environmental Group

There are multiple regulatory agencies that can show up unannounced to your facility including local authorities, state regulators as well as, the Federal Environmental Protection Agency (EPA). There are also several different divisions associated with each agency (for example: air, waste and water), each with its own technical focus and field staff. This means that one or more inspectors could visit a facility throughout the year. More often than not, these inspections are unannounced. Companies must allow regulators access to the facility. Ensuring your staff is prepared is a critical element to a successful inspection.

Your facility inspection can generally be separated into five components:

  1. Opening discussion – A meeting is conducted for the inspector to get to know your company. He or she may not be familiar with your specific operations. Explain the process fully. Be polite and open about your process. Inspectors are not focused on proprietary information. If you do have business sensitive information, you can advise the inspector and ask that he or she keep this information private. Be clear about this as in the case of the EPA, some regulatory notes become public information. They may ask about raw materials and wastes associated with your processes. They may also ask questions not related to their specific subject matter. For example, a hazardous waste inspector may inquire about the facilities air or stormwater permitting. They are allowed to forward any concerns to different departments within their agency. Be prepared to discuss any environmental compliance requirements and how your facility complies with the rule. The inspector will explain their goals for the inspection and maybe even ask for your input in the most efficient way to review the facility. You may have input into the agenda for the day if it makes the inspection run more smoothly. For example, if your facility manager is out of the office for a short period of time, you can advise that since they will be able to answer most of their questions, it would be efficient to wait for the walk-through until they return. They will not delay an inspection but they may revise the agenda.

  2. Data Review– The inspector will want to see all records associated with the compliance topic. This may include:
    • Permits
    • Inspection logs
    • Equipment and operating records
    • Waste shipment documentation (manifests and LDRs)
    • Sampling or monitoring data
    • Safety Data Sheets (SDS)

  3. Facility Walk-through – The inspector will walk through the facility to observe processes and activities. For example, how the company collects and handles wastes. The inspector will walk around outside the building(s), looking for air emissions, water discharges or to inspect areas where wastes are handled. During the walk-through, the inspector might ask employees questions about the company’s processes or practices. The inspector will take notes during all phases of the inspection, including the walk-through. The inspector might also take photographs. Typically this can include: process or waste units such as tanks or containers, areas where spills or leaks have occurred, discharges/emissions, etc. Sometimes an inspector will take samples (water, waste) during an inspection.

  4. Closing meeting - During the closing meeting, the inspector will summarize his or her findings. The inspector cannot always give a complete summary of the inspection, particularly if a situation requires more information or additional research. The inspector will usually describe the general paperwork procedures that follow the inspection such as when to expect the inspection report or follow-up letter.

  5. Follow up– The general rule is no news is good news. Some regulatory agencies require written follow up of a compliant inspection while other agencies will not contact a facility if there are no violations. Some agencies will issue different types of enforcement documentation:
    • Field Citation - A field citation is similar to a ticket. It is issued by compliance officers for violations. Citations require violations to be corrected, or reimbursement to the government agency that performs the corrections. The citation also imposes penalties, in amounts specified in a statute. Field citations may be appealed.
    • Letter of Warning (LOW). Usually a letter asking for more information and follow-up for a violation. They generally do not come with a monetary penalty as long as they are responded to completely and promptly.
    • Notice of Violation (NOV). This can be combined with a LOW. The NOV will list the regulatory requirement and direct the facility on how to achieve compliance. If it is completed timely, financial penalties will generally be limited.
    • Administrative Penalty Order (APO). APOs are issued to resolve compliance problems involving state and/or federal environmental laws. The severity of the enforcement action depends on the environmental impact of the violation, whether it is a repeat offense, and how quickly the problem is corrected, among other factors. An APO contains a monetary penalty and a schedule of actions the violator must follow to return to compliance. APOs can be appealed.
      There are three types of APOs: forgivable, non-forgivable or a combination of the two.
      • A forgivable APO assesses a penalty, but “forgives” the dollar amount if actions to correct problems are completed on schedule.
      • With a non-forgivable APO, no portion of the monetary penalty is waived.
      • In a combination APO, a portion of the penalty is forgiven if corrective actions are completed on schedule—usually within 30 days.

    • Stipulation Agreement. Higher level of enforcement will require an agreement with the agency and the facility. Stipulation Agreements are negotiated settlements used when violations are serious enough to warrant a civil penalty greater than approximately $20,000. They are also used when the actions needed to correct the problem may take more than 30 days to complete. This could require legal assistance, court proceedings and long-term follow-up and financial investments. The agreement will be decided-on with both parties, generally by council. There are usually monetary penalties and major fines by the egregious nature of the violation as well as follow-up work directed by the agreement.

What Can My Facility Do?

  1. Have a Plan. Monitor your facilities’ activities so you keep up-to-date and in compliance with applicable environmental regulations.

  2. Be Prepared. Make sure there is someone at the company who can accompany an inspector if the primary contact is away. Regulators will not come back at a more convenient time.

  3. Stay Organized. Make sure environmental permits and reporting records are up-to-date and in order so they are easily accessible during the inspection. Many companies keep separate records for different program areas (air, water etc.).

  4. Ask Questions. Call MMA Environmental or regulatory agency if you have questions about the environmental regulations.

If you have questions about this matter or would like additional information about Marsh & McLennan’s environmental services, contact your local representative or visit