Surviving a Dept. of Transportation Audit

LCT Staff
Posted on June 1, 2007

I would like to begin with just a brief history about our company before I get to the grisly details of our audit. We have been in business for just over two years, purchasing a 15 year-old-limousine company in Temecula, Calif. We are a mostly retail company with a fleet of 12 vehicles. For all of you who have never heard of, or don’t know where Temecula is, we are approximately 50 miles northeast of San Diego, in southwest Riverside county. Temecula is famous for its wineries and vineyards and much of our business is wine-tour related.

From the time we took the reigns, it was our goal to offer the finest service using the best fleet of vehicles possible. Everything we do is by the book, and when we decided to offer service to Las Vegas, it also would be by the book. We applied for our DOT interstate authority.

With the help and guidance of some industry professionals, we completed our documentation and were issued our ICC number. We actually have done very few trips to Las Vegas, but still want to be able to offer the service to our customers. We had our initial inspection, performed by a member of the California Highway Patrol on behalf of the Department of Transportation. It was cordial and informational, and we were given a status of satisfactory.

Receiving the DOT Notice

In November, we received a notice of audit from the U.S. Dept. of Transportation (DOT). Along with the notice was a list of items the auditor would require during his visit. Let me just say that if you receive this notice, take it very seriously and spend the next two days getting each and every report and piece of paper that is being requested. When the auditor arrived, he flashed his badge and introduced himself as a Special Agent of the DOT. This was not a Highway Patrol officer on behalf of the DOT.

He told me that in light of the recent bus tragedies (in Texas, following Hurricane Katrina), DOT enforcement would be stepped up and those companies without any rating (like us, so he thought) would be the first to be checked. After quickly looking at his reports and realizing that we did already have a rating, he simply stated that since he was already here, he might as well proceed. We did. For the next two days without a break, we went through the process — on the second day until past 7:00 p.m.

Being a small company, we do not have a dedicated compliance person. I would assume that to be the case with most of the limousine companies out there. We do our best to make sure that we are on top of our procedures. Every driver we have is given a pre-employment drug test. We have a DMV printout and employment application as well. We thought we were doing pretty well until things got going. The inspector asked for our driver qualification files. “Do you have a DOT specific employment application for your commercial drivers?” We didn’t. We presented our files as they were. Driver qualification file is an official term defined in the federal code. (One thing I will say is that the Federal Motor Carrier Safety Administration website is a fantastic reference tool). The ability to search for terms is very helpful. The assumption by the inspector is that you have read and understood everything in the code of federal regulations.

“I Am an Investigator”

Upon reviewing all of documents, the phrase “I am an investigator, not a reporter” came up repeatedly. This meant that he was not going to take the information presented to him at face value, he would substantiate it himself. I have never been interrogated by a detective, or cross-examined by an attorney, but I can only imagine that the feeling is remarkably similar. The tone of the audit process went from cordial to hostile frequently. I felt as if I was dealing with a one man “good cop, bad cop.” I was subjected to two days of intense questioning, frequently intimating that I was lying. I was made to feel like a criminal and was constantly reminded of the monetary fines that could easily be assessed.

We then progressed to the drug-testing portion of the program, which I was pretty confident about. Because we have both commercial and non-commercial drivers, we have two pools with our drug consortium. At one point, we ran out of chain of custody forms for our non-commercial drivers, and we accidentally used the incorrect form. I was then notified that I may have violated these drivers’ civil rights by using the incorrect chain of custody form. In addition, when we send the chain of custody form to the collection center, we don’t always get the employer copy back. Not good. Always be sure to match the employer copy of the chain of custody form to the test result.

We then talked about the supervisor portion of the drug-testing program. I personally viewed all of the video and read all of the printed materials to comply with the program. The Special Agent asked to see the original printed material that I read while reviewing the video. I pulled a copy of the material from my files. I was told that this could not have been the original document because, “there was no crease at the staple. Whenever you open a stapled document a crease is formed at the staple.” I know of no such regulation requiring me to keep the original piece of paper from my drug education program, but perhaps it exists. At that point I was quizzed about some of the content in the materials to prove that I had actually read them.

There are a lot of legal intricacies that you as an operator are responsible for. There are a number of source out there to help, from consulting companies and drug consortiums to companies that offer printed materials. One such company is JJ Keller and Associates. They provide forms, manuals and printed materials to help you comply with these regulations. This is not an endorsement for them; it is simply a reference to a company that offers these types of services.

In conclusion, what I will tell you is that if you have interstate operating authority and if your phone has not yet rung, it will and probably very soon. Do yourself a big favor and go with that assumption. Do your own internal audit and correct anything you can in the meantime. Granted, no one will be perfect at the conclusion, but showing that you are making every legitimate effort to comply will go a long way with your auditor.

Steven Levin is president of Sterling Rose Limousines, based in Temecula, Calif.

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