What To Expect During A New Entrant Audit

In 2020, the FMCSA and state enforcers may have conducted over 50% of all compliance reviews remotely where just 10% were conducted in 2019 and 2% in 2018.

To ensure compliance with applicable Federal Motor Carrier Safety Regulations (FMCSRs), Hazardous Materials Regulations (HMRs), and related record-keeping requirements, motor carriers must undergo a Safety Audit within the first 12 months of their operations to complete the New Entrant Program.

As a new entrant into trucking or other industry, it is required to follow Department of Transportation regulations (transportation, construction, manufacturing, etc) and the DOT will want to see some established records and processes.

Download FMCSA 32 Page Safety Audit Resource Guide.

The new entrant safety audit is generally done between the first six to twelve months of operation and is required for any company with a DOT number that is:

• involved in the transportation of property or passengers in interstate commerce,
• with a vehicle of gross vehicle weight rating (GVWR) or gross combination weight rating (GCWR) of more than 10,000 lbs.
• and subject to Federal Motor Carrier Safety Regulations (FMCSR)

Companies operating solely in intrastate commerce are subject to applicable state regulations regarding commercial motor vehicles.

It is important to understand that the New Entrant Safety Audit is a requirement for all new trucking start-ups.

So, knowing that a safety audit is coming, what should new companies expect?

 

What would cause a motor carrier to fail a new entrant safety audit?

A safety audit involves the seven Behavior Analysis and Safety Improvement Categories (BASIC) factors to determine the new carrier’s compliance with the safety regulations and assist in establishing a sound safety program.

The key to compliance with any audit is documentation.

A carrier could do everything right in complying with the regulations but if it is not documented, or they  are unable to present the documents to the safety officer  then the carrier will end up failing the audit. A common cause of a new entrant audit failure is the inability to produce documentation of pre-employment drug test results.

This audit could be in person or done off-site where the carrier will upload required documentation directly to the FMCSA website for them to review.

Auditors may request documents related to drivers, vehicles, and general operating procedures and record-keeping requirements.

A lack of basic safety management controls or failure to comply with any one of the following 16 regulations will result in a notice to a new entrant that its USDOT new entrant registration will be revoked:

1. Failing to implement an alcohol and/or controlled substances testing program
2. Using a driver known to have an alcohol content of 0.04 or greater to perform a safety-sensitive function.
3. Using a driver who has refused to submit to an alcohol or controlled substances test required under part 382.
4. Using a driver known to have tested positive for a controlled substance.
5. Failing to implement a testing program for alcohol and/or random controlled substances.
6. Knowingly using a driver who does not possess a valid CDL.
7. Knowingly allowing, requiring, permitting, or authorizing an employee to operate a commercial motor vehicle with a commercial learner’s permit or commercial driver’s license which is disqualified by a State, has lost the right to operate a CMV in a State or who is disqualified to operate a commercial motor vehicle.
8. Knowingly allowing, requiring, permitting, or authorizing someone to drive who is disqualified from driving a commercial motor vehicle.
9. Operating a motor vehicle without having in effect the required minimum levels of financial responsibility coverage.
10. Operating a passenger carrying vehicle without having in effect the required minimum levels of financial responsibility.
11. Knowingly using a disqualified driver.
12. Knowingly using a physically unqualified driver.
13. Failing to require a driver to make a record of duty status.
14. Requiring or permitting the operation of a commercial motor vehicle declared ‘‘out-of-service’’ before repairs are made.
15. Failing to correct out-of-service defects listed by driver in a driver vehicle inspection report before the vehicle is operated again.
16. Using a commercial motor vehicle not periodically inspected.

Once the New Entrant Safety Audit is complete, the auditor will review the findings with the carrier. Within 45 days, the carrier will receive written notification from FMCSA confirming that they have passed or failed.

If they pass the audit, the carrier’s safety performance will continue to be closely monitored for the remainder of the 18-month new entrant period. If no subsequent safety problems are found, the carrier will be granted permanent operating authority and continue to be monitored under CSA.

 

Off-site FMCSA safety audits are on the rise

During an off-site review, a safety auditor conducts the audit remotely, assessing a carrier’s safety performance and safety management practices by requesting specific documents from the carrier.

In 2018, the FMCSA said off-site audits would be restricted to less-serious carrier problems and would not be allowed in the case of maintenance BASIC violations.

However, the FMCSA changed its tone during the COVID-19 pandemic and immediately expanded the use of remote motor carrier safety compliance reviews.

According to CCJ Magazine, “It’s a new twist,” said Lesley Sachs, a partner at the national transportation-focused law firm Taylor & Associates, based in Winter Haven, Florida. “Carriers need to pay attention. It’s something to take seriously. The opportunity presented itself with COVID, and FMCSA seized it.”

In 2020, the FMCSA and state enforcers may have conducted over 50% of all compliance reviews remotely where just 10% were conducted in 2019 and 2% in 2018.

Although the regulatory definition of compliance review describes the reviews as on-site, FMCSA said the influx of electronic recordkeeping and other technology allows the agency to perform the same investigative functions remotely.

FMCSA’s offsite audits generally take two weeks or less and the investigator will complete the process by phone.

 

How do you schedule the FMCSA new entrant audit?

The investigator will contact you by phone or email to schedule the audit.

Generally, they will try contacting the company by phone first and if they are unable to get a hold of them, they will email you.

According to Harry Sanders, retired from the FMCSA, “The letters FMCSA sent out would be confusing and sometimes a carrier would operate after their revocation date. That would subject them to more headaches in the form of fines and CMVs possible OOS (out-of-service) roadside.”

For off-site audits, the investigator will mention they are required to upload information such as accident records, driver lists, equipment lists, MC-90 forms and other records. Carriers may also be required to fill out a questionnaire with basic details such as revenue and mileage data, insurance information, addresses and other operational information.

If an auditor has attempted to contact you, do not put off getting back to them. The FMCSA has processes in place that they follow and if you do not get back to them, they will mail a notice letter or demand letter with detailed instructions of what they are requesting and the timeline in which you must respond.

If you ignore this request, the company can face monetary fines (around $1,000 for the first 10 days, or up to $10,000) or suspension of authority to operate for refusing to cooperate.

The audit should be scheduled in two or three weeks so the carrier can prepare for the audit.

 

What Happens If Violations Are Found During FMCSA New Entrant Audit?

If the carrier fails the safety audit, the FMCSA will provide the carrier written documentation detailing the violations that caused the carrier to fail and the requirements for developing a corrective action plan (CAP).

According to Harry Sanders, retired from the FMCSA, “I think the biggest concern from most carriers that went through an audit and failed was the uncertainty of submitting a CAP and if it was acceptable and changed the rating from fail to pass.”

The CAP must explain the actions the carrier will take to address the violations identified.

CAPs must be submitted to the FCMSA Service Center within the number of days specified on the failure notification. Failure to either submit a CAP, or implement the corrective actions, will result in loss of FMCSA registration.

CNS is very well-versed in safety and compliance laws and our experienced representatives know what information is crucial and imperative to accomplish a safety rating increase. We work directly with the client on implementing and training staff to meet the requirements necessary.

These corrective action plans are complicated and take a lot of work to be completed.

Learn more on how we can help with your safety rating upgrade. 

Do you have a good safety rating but are still worried you may not pass an audit?

Learn more how CNS can help you prepare for an audit.