Corporate Audit Agreements
EPA encourages companies with multiple facilities to take advantage of the Agency's Audit Policy to conduct corporate-wide audits and develop corporate-wide compliance systems.
A Corporate Audit Agreement allows an entity (such as corporation, university or other organization with many facilities or facility locations within its authority) to plan a corporate-wide or facility-wide audit with an advanced understanding between the entity and EPA regarding schedules for conducting the audit and disclosing violations beyond the current 21-day disclosure requirement for single-facility disclosures. In return for the advanced agreement of an audit and disclosure schedule, the facility would receive the benefits of EPA's Audit Policy as applicable.
While there are a few differences between Corporate Audit Agreements and Audit Policy disclosures, the key difference is that a Corporate Audit Agreement has the added benefit of an extended schedule for disclosure of violations. Routine disclosures made under the Audit Policy, however, must be submitted to EPA in writing within 21 days of discovery in order to be eligible for consideration of penalty mitigation.
Corporate auditing agreements are designed to address potentially high-volume disclosures. The audits addressed in an agreement can range from ones that address a specific regulatory requirement to those that involve a comprehensive multi-media review. EPA will require that an auditing agreement be in writing and that the facilities to be audited be identified. Based on the breadth and complexity of the audit, EPA and the company can reach mutually acceptable terms regarding schedules for audit commencement and completion, and a final disclosure report. All agreements are expected to have a schedule for violation corrections and to define injunctive relief. The company and EPA can also define in advance economic benefit for certain violation types (where applicable) and violations ineligible for relief. Such definitions provide the company with advanced knowledge of potential statutory penalties for specific violation types. In developing schedules and the parameters of a corporate auditing agreement, EPA strives to treat competitors similarly.
In developing an auditing agreement, EPA will coordinate with EPA Regions to ensure that the proposed facilities are not ineligible for the Audit Policy due to an ongoing enforcement action or any inspection that might occur during the audit period. In all cases, however, companies that are subject of a corporate-wide investigation by EPA are ineligible for Audit Policy relief. EPA will coordinate and expedited and comprehensive resolution of all disclosures. For violations involving a state-approved program, EPA will notify the state of the disclosure.
EPA understands that, as with most enforcement actions, confidentiality is important to companies. EPA will protect settlement discussions associated with the audit, and findings conducted and disclosed under an agreement, consistent with EPA's handling of enforcement matters and EPA's Confidentiality and Information Received Under Agency's Self-Disclosure Policy. Typically, disclosures and related documents are withheld from public release until such time as the Agency and the self-disclosurer have formally settled the case.
Please refer to "Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations", 65 FR 19,618 (April 11, 2000) (PDF, 292 KB, 11 pages, About pdf) for a more detailed discussion of eligibility and policy application of the Audit Policy.