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EPA's Audit Policy

The EPA Audit Policy (PDF), (11 pp, 262K, About pdf) formally titled “Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations,” safeguards human health and the environment by providing several major incentives for regulated entities to voluntarily come into compliance with federal environmental laws and regulations.

To take advantage of these incentives, regulated entities must voluntarily discover, promptly disclose to EPA, expeditiously correct, and prevent recurrence of future environmental violations. Disclosures are often preceded by consultation between EPA and the regulated entity, so that they can discuss mutually acceptable disclosure details, compliance, and audit schedules can be discussed.

Summary of Incentives: Significant penalty reductions. Civil penalties under the environmental laws generally have two components, an amount assessed based upon the severity or “gravity” of the violation, and the amount of economic benefit a violator received from failing to comply with the law.

No recommendation for criminal prosecution for entities that disclose criminal violations if all of the applicable conditions under the Policy are met. “Systematic discovery” is not a requirement for eligibility for this incentive, although the entity must be acting in good faith and adopt a systematic approach to preventing recurring violations. Refer to the Audit Policy for a complete discussion of issues relating to disclosure of criminal violations.

No routine requests for audit reports would be made. EPA reaffirms its Environmental Auditing Policy Statement, in effect since 1986, to refrain from routine requests for audit reports. That is, EPA has not and will not routinely request copies of audit reports to trigger enforcement investigations.

How Do I Make a Voluntary Disclosure Under EPA’s Audit Policy?

An entity has 21 days from the time it discovers a violation has, or may have, occurred to disclose the violation in writing to EPA.  Discovery is when any officer, director, employee or agent of the facility has an objectively reasonable basis for believing that a violation has, or may have occurred. Entities should make the disclosure to the EPA Regional Office where the affected facility is located.  Voluntary self-disclosures for violations should be sent to the appropriate Audit Policy Contact.   In the event of violations affecting more than one Region, entities should contact EPA Headquarters.

The disclosure should at a minimum identify the means of discovery, type of violation, and facility location.  EPA encourages companies to review our Sample Disclosure Follow-Up Letter and the Self-Disclosure Questionnaire in Attachment A of that letter to get a sense of the type of information needed about the violation(s) being disclosed in order to process the submission.

Before self-disclosing, you may wish to consult one or more of U.S. EPA's policies and guidance which deal with self-disclosures and incentives for compliance.  

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Conditions for Penalty Mitigation

Entities that satisfy the following conditions are eligible for Audit Policy benefits. Even if your entity fails to meet the first condition - systematic discovery - you can still be eligible for 75% penalty mitigation, and a recommendation for no criminal prosecution of the violations against your entity.

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Please refer to the Audit Policy (PDF), (11 pp, 262K About PDF)"Incentives for Self-Policing: Discovery, Disclosure, Correction and Prevention of Violations", 65 FR 19,618 (04/11/00) for a more detailed discussion of eligibility and the application of the Audit Policy. Additional information about the Audit Policy and its use is available from the following:

Sample Documents for Use in Self-Disclosing Environmental Violations under EPA's Audit Policy

Audit Policy User's Survey (November 13, 1998)

Under a contract EPA conducted a voluntary and confidential survey of companies that have disclosed environmental violations under the EPA Audit Policy. The intent of the survey was to aide EPA to better serve the regulated community and to help EPA evaluate and improve the Audit Policy.

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Compliance Assistance | Compliance Monitoring | Compliance Incentives


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