To most Americans, the word “audit” conjures up a visceral fear of the IRS combing through their records and finances. However, to those in the motor carrier industry, “audit” means something much different, but no less terrifying. A Department of Transportation (DOT) audit, or “investigation,” conducted by the Federal Motor Carrier Safety Administration (FMCSA), can pose a direct risk to a carrier’s ability to operate and survive as a going concern. They are used to determine a motor carrier’s compliance with the Federal Motor Carrier Safety Regulations (FMCSRs). Therefore, it is imperative that a carrier understands what a DOT audit entails and how to act during its course.
What provokes a DOT Audit?
FMCSA has to prioritize carriers for audits. Understanding what factors the Agency uses to prioritize carriers for an audit is important for all carriers to understand so that they can do their best to keep out of the crosshairs. The most common triggers for a DOT are: (1) High Safety Management System (SMS) Behavior Analysis and Safety Improvement Categories (BASIC) scores; (2) Significant DOT recordable accident(s); and (3) Non-Frivolous Complaints.
High SMS BASIC scores. SMS BASICs assess a motor carrier’s safety performance in seven areas: Unsafe Driving, Hours-of-Service Compliance, Driver Fitness, Controlled Substances/Alcohol, Vehicle Maintenance, Hazardous Materials Compliance, and Crash Indicator. This assessment comes from data collected on roadside inspections, DOT crashes, and previous reviews and enforcements. If a motor carrier has a BASIC score above the threshold level established by the FMCSA, it can be a target for a DOT audit. It normally requires at least two or more BASIC scores above the threshold for any investigation to occur. However, those with high hours of service, vehicle maintenance, and unsafe driving BASICs are more likely to find themselves the target of an FMCSA investigation.
Significant DOT recordable accident. A Significant Crash is a crash involving a commercial motor vehicle (CMV) involving a fatality, an unusually high number of injuries, or crashes involving a CMV that are likely to result in heightened interest. An accident of this type can result in the FMCSA launching an investigation of a motor carrier.
Non-frivolous complaint. When there is a substantive complaint made against a motor carrier (example: forcing drivers to drive over hours), that motor carrier may be made part of an FMCSA investigation.
Unresolved prior acute or critical violations. Previous acute or critical violations found during a previous DOT audit can subject a motor carrier to an additional investigation if that violation has not been resolved.
There are 3 types of DOT audits conducted by an FMCSA Safety Investigator(s) (SI) or their state partners:
Off-site investigation: As the name implies, off-site DOT audits are held remotely without the SI coming the carrier’s location. Companies called on for an off-site audit will be required to electronically submit the information requested by the auditor. This involves requests for documentation from the carrier followed by an in-depth review of available information to determine the nature and extent of safety issues identified as reasons for the audit. While an off-site investigation includes the same investigative processes as an on-site investigation, the sampling numbers and documents requested are often less onerous.
On-site comprehensive investigation: The on-site comprehensive investigation, often referred to as a “compliance review,” takes place at the carrier’s place of business. This audit type occurs when the FMCSA believes the carrier exhibits broad and complex safety problems. During an on-site comprehensive audit, all BASICs and related FMCSRs Parts are investigated.
On-site focused investigation: The On-site Focused Investigation also takes place at the carrier’s place of business. Here, the SI concentrates on the specific safety problem areas identified for the investigation. It involves reviewing records, interviewing personnel, analyzing practices, and identifying corrective actions. If violations in other areas are discovered, this may expand to a comprehensive DOT audit.
The COVID pandemic saw the FMCSA cut back on their on-site investigations and perform more off-site investigations. However, that trend has been reversed in the last few years. According to the FMCSA’s Motor Carrier Management Information System (MCMIS) data snapshot as of 8/30/2024, on-site investigations rose 77% in 2023 over the 2020 level. See chart below.
Data Source: FMCSA’s Motor Carrier Management Information System (MCMIS) data snapshot as of 12/29/2023, including current year-to-date information for CY 2023. The data presented above are accurate as of this date but are subject to updates as new or additional information may be reported to MCMIS following the snapshot date.
Possible Consequences of DOT Audit
Investigation expansion. If the investigation starts off as an off-site or on-site focused investigation and violations in other areas are found, the investigation could expand to an on-site comprehensive investigation.
Fines. A Notice of Claim (NOC) for violations found during an investigation will assess monetary fines to a carrier. These fines are determined by the type and number of violations found. The FMCSA increased the fine amounts for 2024 in a Final Rule published December 28, 2023. For example, the maximum amount for a recordkeeping violation increased from $14,960 to $15,445.
Safety rating downgrade. A DOT audit can result in one of the following safety ratings: (1) Satisfactory; (2) Conditional; (3) Unsatisfactory; or (4) No rating. While a Satisfactory or non-rated investigation will have minimum to no impact on a motor carrier’s operations, the same cannot be said for a proposed Conditional or Unsatisfactory safety rating. A Conditional safety rating, if it becomes final, can result in increased insurance costs and possible loss of business if a carrier’s customers require a Satisfactory or no safety rating. A final Unsatisfactory safety rating will result in the motor carrier’s loss of operating privileges.
Know What to Expect
Notification/Initial contact call. An SI will normally notify a motor carrier that it is subject to an investigation. This usually comes in the form of a phone call followed up by an investigation letter. The SI will then inform the carrier of the type of investigation to be performed. In the case of an on-site investigation, it is likely the SI will schedule the investigation sometime between 48 hours and two weeks after the notification. However, in certain cases, such as a major DOT accident, there may be no prior notification, and the SI will show up at the carrier’s location.
Initial request for documents. In most instances the SI will request an initial list of regulated drivers and vehicles from the carrier. Keep in mind, even before requesting any initial documents, the SI has already gone through the motor carrier’s records regarding SMS scores, accidents, and other information contained in the FMCSA databases.
Expectations by type of audit. The expectations regarding the procedures of an audit differ by investigation type.
Off-site audits will normally consist of the SI calling and sending a letter requesting documents from the motor carrier. The requested information will center on documents related to the reason for the investigation, such as hours of service. The SI will then remotely review these documents and send any supplemental requests for documents. The motor carrier will upload these documents through the FMCSA’s SMS website. Once this review is completed, the SI and motor carrier’s representative(s) will have a final closing call to discuss the findings, including any proposed safety rating.
For on-site focused investigations, the SI will also likely request an initial list of drivers and vehicles prior to arriving at the motor carrier’s location. Once on-site, the SI will conduct an initial interview with the motor carrier’s management discussing the scope and expectations of the investigation. After this, the SI will request specific records related to the safety areas they are investigating. If these records indicate violations in additional compliance areas, the investigation could be expanded to an on-site comprehensive investigation. In such a case, the SI will examine all areas of a motor carrier’s compliance with all Federal Motor Carrier Safety Regulations (FMCSRs), including driver qualifications, hours of service, accidents, and vehicle maintenance. An on-site comprehensive investigation can originate on its own based upon the safety violations that prompted the investigation. In the case of any on-site investigation, once the SI has completed their review of the documents, they will hold a close-out meeting with the motor carrier’s management. During this meeting, the SI will discuss their findings and any proposed safety rating. They will normally prove the motor carrier with a copy of the audit report with a proposed safety rating to the motor carrier at this meeting.
Preparing for the Safety Investigation
Ideally, a motor carrier would have a near “bullet-proof” compliance and safety program when the FMCSA comes calling. In these cases, the carrier would have completed internal “mock” DOT audits to look for and correct any deficiencies found. However, few motor carriers actually do this. When they receive notice of an impending DOT audit, they must scramble to search for documents and correct any deficiencies found. The amount and type of preparation will often be contingent upon the type of investigation and amount of time provided before the investigation begins. It is important to remember that this preparation should be ongoing throughout the investigation in anticipation of additional document requests.
Initial driver and vehicle lists. As discussed previously, most investigations begin with the SI requesting the motor carrier’s driver and vehicle list. Normally this request will be for any driver or vehicle used by the carrier in the previous 365 days. Before handing over any list, ensure that no drivers or vehicles are included that have not been used in the previous 365 days. Additionally, clean the lists of any drivers or vehicles that are not regulated by the FMCSA.
Identify “red flag” violations and other roadside violations. During any investigation, the SI will look for egregious violations of the Federal Motor Carrier Safety Regulations. These violations are called “red-flag violations.” If a red-flag violation is found, the investigator will look to see if the violation has been corrected. Therefore, it is important a motor carrier identify any “red flag” violations their drivers have had on a roadside inspection and ensure the violation has been corrected. A list of “red flag” violations can be found on the FMCSA CSA FAQs website.
Check driver qualification files. It is imperative to review the driver qualification files of drivers who have had a roadside violation (particularly an out-of-service violation) or a DOT recordable accident. These are the files an SI will likely request first for their sampling.
Hours of service (HOS). If HOS is a part of an off-site or on-site focus investigation, or for any on-site investigation, a motor carrier should take several immediate steps. Review the logs or ELDs of any driver with an HOS violation on a roadside inspection during the previous 6 months. For ELDs, ensure the log has been certified by the driver. All unassigned driving time should be assigned, if possible. For any outstanding required paper logs, have drivers have complete and submit as soon as possible. It is also prudent to collect and organize any supporting documents the motor carrier used to check for falsifications. Any critical violation found in the HOS area will result in a “conditional” safety rating, regardless if no other violations are found.
Complete vehicle files. Similar to actions previously discussed, it is prudent to complete as many vehicle files as possible, particularly if vehicle maintenance will be part of the investigation. The first files to examine and complete should be those vehicles with out-of-service violations or involved in DOT accidents within the previous 12 months. It is during this process that the carrier should look to complete any overdue annual inspections and preventive maintenance, time permitting.
Verify drug and alcohol testing. The motor carriers should immediately request any missing records, such as quarterly reports and testing results, from the third-party administrator (TPA) or laboratory they use to administer their drug and alcohol testing program. This will be necessary to prove the carrier has met the minimum random testing and that they have a program as required by the FMCSRSs. It is also useful to go and document the reasons for missing a post-accident test.
Update DOT accident register. Immediately following notification of a pending investigation that may involve examining DOT crashes, it is prudent for a motor carrier to ensure their DOT accident register is complete and up to date. At a minimum, this should include that the accident register includes all accidents on the FMCSA’s SMS and Portal websites.
Identify “good” files. A, SI will already know what issues they will be investigating before they even make initial contact with the motor carrier. With access to the FMCSA’s database, they will also have specific drivers and vehicles they intend to investigate. However, they often will still ask the motor carrier to pull additional driver and vehicle files to meet their sampling quotas. Therefore, it is always good practice to identify driver qualification files, driver logs, vehicle files, and other documents that are compliant and ready for review.
Develop a game plan. When notification occurs, it is important to identify the points of contact within your organization who will be responsible for finding and reviewing the documents and files needed for the upcoming investigation. This will also carry over once the investigation is ongoing and additional document requests from the SI occur. Motor carriers should also identify one person who will “run point” during the audit. That designated representative should have all contact with the SI regarding document requests, providing documents, and answering questions. During on-site investigations, the SI may request to interview individuals in charge of certain areas of the business (safety, operations, driver recruiting and training, etc.). Notify the most qualified personnel to speak on these topics in advance so that they can prepare and no surprises will occur. It is always recommended that the motor carrier have a meeting with all internal and external personnel who will be involved in the audit process to ensure everyone is aware of the overall company strategy.
How to Navigate the DOT Audit
Cooperate with the SI (but not too much). The SI has legal authority to conduct the investigation. It is important that the motor carrier be seen as cooperative. However, this does not preclude the motor carrier from asking the SI for identification, the reasons for the investigation, or expected scope and time frame. The motor carrier is only obligated to produce records and documents that are specifically requested by the SI. For instance, if the SI requests a driver qualification file, the carrier should only include items specifically required under Part 391.51. Any other items that may have been kept in the driver qualification file, such as drug tests results, training records, or policy acknowledgement sheets, should be culled before the file is submitted.
Locate the SI(s) in a physical location away from daily operations and drivers. For on-site investigations, it is good practice to determine where the SI(s) will be physically located in the motor carrier’s building before the investigation begins. The SI should be placed in an area away from the operations of the company. The location should minimize any possible contact with the motor carrier’s personnel, including drivers. By doing so, this allows the motor carrier to exercise more control over whom within the company has contact with the SI.
Do not provide access to internal program and systems. Many motor carriers have their files and documents stored digitally. For instance, they may have an electronic driver qualification program. However, it is highly advisable to present the SI with photocopy documents rather than access to the carrier’s internal systems. This allows a company to control what documents an SI can review and limits it to the documents requested.
Forward-Looking Preparation
If a motor carrier waits until the FMCSA audit before preparing for a safety investigation, it may already be too late. A motor carrier needs to commit the time and resources to compliance prior to that notification. Fortunately, there are numerous actions a motor carrier can take to help survive a DOT audit.
Know the FMCSRs. It is imperative that a motor carrier knows what is required of it under the FMCSRS. The regulations are numerous and often confusing. However, someone within the organization must understand the FMCSRS, even if outside consultants are used. Designating a safety person or safety department to track compliance with the regulations is the first step in insulating a motor carrier from adverse DOT audit results.
Prepare. A wise person once said, “an ounce of prevention is worth a pound of cure.” This is very true regarding a DOT audit. Regularly reviewing files and operational models for compliance with FMCSRs, SMS scores and violations, and other records will allow a motor carrier to gauge its safety program. That is the time to make corrections, complete records and files, address roadside violation patterns, and take other steps to bring its operations into compliance. The FMCSA provides a valuable tool to motor carriers to review its internal safety compliance program, the Safety Management Cycle (SMC). According to the FMCSA it “developed the SMC to help SIs and motor carriers effectively address motor carrier safety and compliance issues and to improve compliance with” the FMCSRs. The FMCSA also states that “(a)pplying the SMC is a step-by-step process that looks at “why” the safety and compliance issues are occurring rather than just identifying the violation (the “what”). The tool provides a framework for brainstorming remedies, choosing solutions, and designing and implementing plans to improve the motor carrier’s safety operations.”
The SMC consists of six Safety Management Processes (SMPs):
The SMC can be used when a motor carrier examines its violations and crashes found in its SMS history. In doing so, a carrier can find the root causes of its compliance issues and develop policies and standard operating procedures to reduce or eliminate those issues going forward.
Conduct internal “mock” DOT audits. A valuable tool in preparing for any potential DOT investigation is for a motor carrier to conduct a “mock” DOT audit on itself. A mock audit can be done by internal personnel or an external source, such as a DOT attorney. It can also be conducted as either a focused or comprehensive review. A mock audit is one way to identify and address any violations or issues with the FMCSRs before they manifest themselves in ways that put the motor carrier on the FMCSA’s radar.
Conclusion
A DOT audit can be an intimidating process for any motor carrier. The consequences of the outcome can have a profound impact on the carrier’s business. However, a motor carrier can effectively influence the results of any potential audit with a proper understanding of the process and effective preparation. The time to start preparing is now. The most effective way to survive a DOT audit is understanding the process and implementing an effective safety and compliance program to avoid the audit altogether.
THOMAS O’DONNELL is Of Counsel in the Transportation & Logistics Practice Group and may be reached at 302.442.7007 and todonnell@beneschlaw.com.