If you are a trucking company owner or manager, you know how stressful and challenging it can be to face an unexpected audit from the Federal Motor Carrier Safety Administration (FMCSA). Audits are conducted to ensure that trucking companies comply with the safety regulations and standards that apply to their operations. However, audits can also reveal issues and violations that can result in fines, penalties, or even suspension of your operating authority.
In this blog post, we will share a real-life story of how a trucking company overcame challenges during an unexpected audit and what lessons they learned from the experience. We hope that this story will inspire and motivate you to prepare for and handle audits with confidence and professionalism.
The Background
The trucking company in this story is a small family-owned business that operates in the Midwest region. They have been in the industry for over 20 years and have a fleet of 15 trucks and 20 drivers. They specialize in hauling refrigerated goods, such as dairy products, meat, and produce.
The company has a good reputation and a loyal customer base. They pride themselves on providing quality service and maintaining high safety standards. They have never had any major accidents or violations in their history.
However, they also have some challenges and weaknesses that they are not fully aware of. For example, they do not have a dedicated safety manager or a formal safety program. They rely on their drivers to keep track of their hours of service (HOS) and vehicle inspection reports (VIRs) using paper logs and forms. They do not have a system to monitor or verify the accuracy or completeness of these records. They also do not have a regular maintenance schedule or a preventive maintenance program for their trucks.
The FMCSA Audit
One day, the company received a letter from the FMCSA informing them that they were selected for an off-site audit. The letter stated that the audit was part of a random sampling process and that they had 10 days to submit various documents and records to the FMCSA via email or fax.
The documents and records requested by the FMCSA included:
- Driver qualification files
- Driver HOS records
- Driver vehicle inspection reports
- Vehicle maintenance records
- Accident register
- Insurance certificates
- Operating authority registration
The company was shocked and confused by the letter. They had never been audited before and did not know what to expect or how to prepare. They did not have all the documents and records ready or organized. They also did not have enough time or resources to gather and submit everything within the deadline.
They decided to contact a trucking consultant who specialized in helping trucking companies with audits. The consultant advised them to do the following:
- Prioritize the most important documents and records, such as driver qualification files, HOS records, and insurance certificates.
- Scan or photocopy the documents and records and save them in electronic format.
- Label and organize the documents and records by driver name, date, vehicle number, etc.
- Review the documents and records for any errors, omissions, or discrepancies.
- Correct any minor errors or omissions, such as missing signatures or dates, using white-out or pen.
- Explain any major errors or discrepancies, such as HOS violations or missing records, using a cover letter or an email.
- Submit the documents and records to the FMCSA as soon as possible, preferably before the deadline.
- Keep copies of everything that was submitted for future reference.
The company followed the consultant’s advice and managed to submit most of the documents and records within the deadline. However, they also encountered some challenges and difficulties along the way. For example:
- Some of the driver qualification files were incomplete or outdated. They had to contact some of their former drivers to obtain missing information or documents, such as medical certificates or driving records.
- Some of the HOS records were inaccurate or inconsistent. They had to compare the paper logs with the electronic logging device (ELD) data from their trucks to identify any discrepancies or violations.
- Some of the vehicle inspection reports were missing or illegible. They had to rely on their drivers’ memories or notes to reconstruct some of the reports.
- Some of the vehicle maintenance records were scattered or lost. They had to contact some of their vendors or suppliers to obtain copies of invoices or receipts for repairs or services.
The Outcome
After submitting the documents and records, the company waited anxiously for the FMCSA’s response. A few weeks later, they received an email from the FMCSA with the results of the audit.
The email stated that:
- The company had passed the audit with a satisfactory rating.
- The company had no acute violations (serious violations that require immediate corrective action) but had several critical violations (less serious violations that indicate a pattern of non-compliance).
- The critical violations included:
- Failing to ensure that drivers comply with the HOS regulations, resulting in 10 instances of drivers exceeding the daily or weekly driving limits or driving without adequate rest breaks.
- Failing to ensure that drivers conduct pre-trip and post-trip inspections of their vehicles, resulting in 15 instances of drivers operating vehicles with defective or unsafe equipment or without proper documentation.
- Failing to implement a systematic inspection, repair, and maintenance program for their vehicles, resulting in 5 instances of vehicles being operated with overdue or overdue inspections or services.
- The company had to pay a civil penalty of $5,000 for the critical violations.
- The company had to submit a corrective action plan to the FMCSA within 30 days, outlining the steps they would take to prevent or correct the critical violations in the future.
The company was relieved and grateful that they had passed the audit and avoided a worse outcome. However, they also realized that they had a lot of room for improvement and that they had to take action to address their issues and weaknesses.
The Lessons Learned
The company learned several valuable lessons from the audit experience. Some of the lessons they learned were:
- Audits can happen anytime and to anyone. They should always be prepared and ready for an audit, whether it is expected or unexpected.
- Audits are not only about compliance but also about performance. They should not only follow the rules and regulations but also strive to achieve high standards of safety and quality in their operations.
- Audits are not only a challenge but also an opportunity. They should not view audits as a threat or a burden but as a chance to learn and improve their business.
To apply these lessons, the company decided to do the following:
- Hire a safety manager who would be responsible for developing and implementing a safety program for the company, including policies, procedures, training, monitoring, and reporting.
- Switch to ELDs for all their trucks and drivers, which would eliminate the need for paper logs and forms and improve the accuracy and efficiency of their HOS and VIR records.
- Establish a regular maintenance schedule and a preventive maintenance program for their trucks, which would reduce the risk of breakdowns, accidents, or violations due to faulty or worn-out equipment.
- Conduct periodic internal audits and reviews of their documents and records, which would help them identify and correct any errors or issues before they become problems or penalties.
By taking these steps, the company hoped to improve their compliance and performance, as well as their reputation and profitability.
Insights
Facing an unexpected audit can be a stressful and challenging experience for any trucking company. However, it can also be an opportunity to learn and improve your business. In this blog post, we shared a real-life story of how a trucking company overcame challenges during an unexpected audit and what lessons they learned from the experience. We hope that this story will inspire and motivate you to prepare for and handle audits with confidence and professionalism.
If you need help with preparing for or handling FMCSA audits, contact us today. We are a reputable trucking insurance agency that specializes in providing affordable and comprehensive coverage for trucking companies. We can help you protect your business from the risks and liabilities that come with audits.