Environmental Auditing

CI
r:
<U
E
r:
o -.1-
a... --
• 1J
> :)
.fi<c
en
J
a.
E
c
U GJ
.... en
en '-
C J
w 0
IU
GJ en
C) c:
GJ .2- ....0.2
~ U J
U 0 C)
o - GJ
~=E~
_ C ...:
.0; E >
z<c.n
, ,
, . . . . . " "~""
C} C! C! err C} CJ C~ C~ C! C~ C! C. " ~ ~.

Why Audit?
• Improve environmental
compliance.
• Determine liabilities.
• Minimize corporate liabilities.
• Ensure profitable future.
• Minimize liabilities for:
- Share holders
- Stake holders
2/29/2016 Free template from www.brainybetty.com
2

Why Audit?
• Improve processes.
• Minimize liabilities for corporate
officers.
• Determine future expenses and costs.
• Improve savings.
• Improve functionality.
• Improve Public Image.
• Enhancement of regulatory relations.
3

2/29/2016
~•.....! . . .
i .
[ pui~ J
~~~~--
HIDVALSC.HOOL FOP"
l l-iE GlF rED
~i-
Free template from www.brainybetty.com
4

2/29/2016
Impact on Regulated
Community
5

Defining Environmental Audits
• Multi-Media
- All Envt. Regulations
- Full Review &
Disclosure.
- System Analysis.
- ISO
- QA/QC
• Media Specific
- Very focused.
- One statute or law
- One envt. Medium
(i.e., air, land, water)
- Site specific.
- Trend Analysis
throughout
complex/corporation.
2129/2016 Free template from www.brainybetty.com
6

Advantages vs. Disadvantages
• Better compliance
• Fewer surprises
• Fewer fines
• Better public relations
• Potential cost savings
• Improved information
transfer
• Increased
environmental
awareness.
• Commitment of
resources.
• Temporary distribution
.
In
production/operations.
• Increased information
to fine or bring law-suits
• Increased liability
• Opening up corporate
weaknesses.
7

•
ACCOUnGUlt street gang"
8

Real Reasons to Audit is:
·VSCA (Verify Adequate System
Competently Applied)!
• [)()~~T ~V~I:? r=()I:?f7~T!
•§ystems always think
system in-place. Always!
9

EPA Policy on Audits
• Comply or DIEI
• Enforcement of
administrative laws
resulting in record
penalties and fines.
• Come to Jesusl
• Let's sit-down and
reason with one
another.
• Convert into a Good
Corporate Citizenl
• Some fines, but can
repent.
• The repenting can
hurtl
10

EPA Encourages Envt Auditing
• Full disclosure.
• Programmatic compliance
• Limited fines
• Improved public image
• Good faith effort
• Less litigation and more cooperation.
11

Attorney-Client Privilege
• If possible - always conduct audit
under attorney client privilege.
• Establish a buffer in possible.
• Full disclosure under attorney client
privilege.
• Work with regulators
• Invite them in and make them part of
the family - sort of...
12

EPA States
• Corporate manager are responsible.
• Part of mitigating factors during sentencing.
• Judge is required to take into consideration.
• Creates environmental insensitive.
• Creates environmental partnership.
• EPA will NOT dictate or interfere.
• EPA will NOT mandate auditing?
• ISO 14001 - want to do business?
• Voluntary Basis - goes along way.
13

, j
b
~
fl!4JJ
Hit's another corporale lawyer... do we wanl to buy a soul?"
14

Elements of Effective Audit
Program
• Explicit top management support.
• Independent of operations.
• Independent of audited activities.
• Attorney client privilege
• Adequate team staffing and support
• Adequate auditor training
• Explicit audit objectives, scope, goals
clearly stated with frequency of audits
15

Program
• A process which collects, analyzes,
interprets and documents information
sufficient to achieve auditing objectives.
• (put your money where your mouth is)!
• Process includes specific procedures
and instruction - do not deviate.
• Report directly to senior management.
• Top down flow (senior management to
bottom feeders).
16

Program
• Mechanism that creates:
- Clear reports.
- Prompt (don't water it down)
- Concise (to the point)
- Corrective actions and resources clearly
provided to remedy situations of non-
compliance.
- Don't shoot the messenger!
- Accurate, Thoroughness, and Quality!
2/29/2016 Free template from www.brainybeUy.com
17

Confidentiality?
• Audits produce information or opinions
that may, if revealed, could be harmful
for your company.
• Certain underlying facts can never be
protected from disclosure.
- Establish attorney client privilege.
- Eventually the veil will be pierced! Its just a
matter of time.
- Release under your terms.
18

Protect the company through
audit process by:
• Senior management support.
• Conducted through Counsel.
• Memorandum from senior management to legal
counsel directing:
- Audit by conducted.
- Conducted through counsel.
- Obtain legal advise.
- Information is to be held confidential and privileged.
- Litigation is anticipated (asserting the basis for this
assumption) this is important.
- All notes are to be logged in the attorney's bound journal.
- A similar memorandum from Counsel to Consultant if they
are used.
19

audit process by:
• Counsel directly retains consultants -
inserting a buffer or barrier.
• ALL written communication are labeled
in the following manner:
- "privileged and confidential" and add the
words "do not duplicate"
20

audit process by:
• ALL written communications are kept in
separate secured files under the control
of counsel.
• Distribution of the report is on a need-
to-know basis.
• An oral audit brief is considered only in
especially sensitive situations (for
maximum protection of information)
always exceptions.
21

LiabiIities
• Cooperation & Officers.
• Envt statutes impose
reporting, record
keeping, documentation
of compliance.
• Failure to submit,
report, document,
falsify, hide, obscure.
• Willfully and Knowingly!
• Auditors/assessment
Team.
- Errors & Omissions.
- Falsifying and hiding
- Water down findings
- Obfuscate/confuse
- Lie
- Remiss
- Failure to obtain, report,
find, discover.
- Destroy
- Intimidate, etc.
22

Planning the program Nuts
and Bolts.
• Program objectives:
- Assurance of compliance.
- Management of liabilities
- Making management accountable
- Tracking of compliance costs.
- Commitment of monies and resources.
23

Planning the program Nuts
and Bolts.
• Organization of the program
- Corporate control with full-time auditors
- Consultants anyone?
- A small corporate oversight group?
24

Management issues
• Expectations of senior management.
• Measures of successful performance.
• Unannounced audits (this is a key)
• Reporting protocols
• Supportive vs. combative style (this will
make you or break you as a cooperate
auditor)
• Is your hat white, gray or black?
25

Legal Issues
• Written vs. oral reports.
• Retained documentation - how much?
• Corporate counsel involvement?
• Watch the stinky attorneys!
• Protection from discovery.
• Report format and watchwords
• Language
• Offer recommendations? (be careful).
26

Program coverage
• Frequency of audits/assessments
• All regulations/some regulations
• All plants/some plants/random sample
• Past practices
• Vendor audits (always)
• Waste contractor audits (always)
27

Process Issues
• Pre-visit questionnaire
• Number of auditors/field of expertise.
• Duration of audit
• Pre-visit, on-site, post-site activities.
• Sampling procedures/QA/QC
• Interview techniques (open ended questions)
• Inspection procedures.
• Use of portable computers/lab-tops/I-pads.
28

Auditor Selection and Training
• Skills required?
• Attorney's role with auditors
• Training procedures
• Full-time vs. part-time vs. consultants.
29

Tools
• Pre-visit questionnaire.
• On-site coordinator (very critical)
• Wind Shield Tour.
• Be ware of the guided tour.
• Compliance checklists Uust checklists)
• Programmatic vs. systemic.
• Regulatory updates
• Audit reports (past, present & future)
• Guidance/procedure manual
• Follow up reports and visits
• Computer support
• Division of duties
30

Conducting the Audit
• Pre-Audit Activities
- Organize team
- Determine scope of audit
- Submit pre-audit questionnaire
- Establish on-site coordinator.
- Develop detailed agenda
• Interviews (who, what, where, why, how, when)
• Review regulations and assigned leads.
• Review records previously requested.
31

Conducting the Audit
• On-site Activities:
- Meet and greet
- Layout the rules of engagement
- Observe throughout entire process
- Records review on-site continued.
- Wind-Shield Tour.
- Assign duties to On-site Coordinator.
- Conduct Walk-Down
- Convene - write down and summarize
- Reacquire target.
32

2/29/2016
~o~ -
-Jucqueline could see al Ihe oil/sell/WI
her cross-examination wUllld need
(0 gel h(~rond the happy/ace.
c 07Ch()ocsf,ncher0319 07 Scnbblc In·low 3ll()wComix com
33

On-site
• Conduct interviews:
- Open ended questions.
- Focus on key-players.
- Pull-the-String
- Follow-up on what you found, heard, and
discovered.
- Use your checklist - to remember!
- Observe (compare, contract, records, logs)
- Maintain photo log (be careful)
- Close on positive note - if possible.
- Your baby is ugly!!!!!
34

Post-Site/Audit Activities
• Review and follow-up while still fresh.
• Completed document review
• Request additional documents
• Make plans for future visits or interviews if necessary.
• Outline audit report
• Assign duties to write report
• Establish format - stick to it.
• Involve legal or senior management if required.
• Write Draft Report
• Agree to findings, concerns, recommendations.
• What is your audit criteria? How are you going to rank your finding.
• What your words, wordsmithing,
• What are the requirements.
• Liabilities worth reporting to management or counsel?
• Submit report - follow agreed to protocol
• Provide debrief of audit activities.
35

Environmental Auditing

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (7)

Similar to Environmental Auditing

Similar to Environmental Auditing (20)

Environmental Auditing