New Entrant Safety Audit: How to Prepare and Pass
Every New Carrier gets audited in its first year. Here are tips on how to prepare and pass!
For new carriers, the Federal Motor Carrier Safety Administration (FMCSA) New Entrant Safety Audit is required within the first twelve months of operations. Failure could put you out of business. Fortunately, if you keep good records and follow the regulations, you are already on your way to passing it.
What does the FMCSA audit?
There are three main areas of documentation reviewed: Driver, Vehicle, and Carrier Program.
One important thing to remember is that you have to keep records on yourself just like you would for any driver you would hire for your business. So, for example, this means pulling the MVR on yourself and keeping a record of it on file. Each driver should also have a Driver's Qualification (DQ) file.
Driver records
- List. All drivers (including you). The list includes name (first and last), date of birth, date of hire, license number, and license state.
- License. Commercial Driver Licenses (CDLs) for all drivers.
- Record of Duty. Duty status records. This information should be available via your electronic logging device (ELD) records.
- Motor Vehicle Record (MVR). Each driver's MVR must be requested at least once a year and kept on file for three years.
- Medical Certificate. The form(s) from the medical examiner for each driver certifying their fitness to drive. The medical examinations must take place at least every two years (and more often if a physician specifies for a driver).
Vehicle records
- List. All vehicles: Unit number, VIN number, License Plate State. License Number, Make, Model, and Year.
- Inspection. The annual inspection should include vehicles and trailers (if applicable).
- Hazardous Material (HM) papers. For carriers that transport HM, the appropriate paperwork must be available. If a carrier does not transport HM, then no paperwork is required.
Carrier Program records
- Proof of Insurance. Whatever insurance a carrier is required to have, must be in place. See our blog post, Trucking Insurance For Owner-Operators, for more details on this area.
- Drug & Alcohol Program. Prior to employment and immediately following any accident, a drug test should be done and in the file. (Yes, even for you.) All drivers also need to be part of a random drug test program.
- Accident Register. Hopefully, this will be a blank file because nothing is needed here. But things happen. Details on any reportable accidents must be in the file (for three years).
How do I prepare for a New Entrant Safety Audit?
The key to passing the New Entrant Safety Audit is preparation. We do not recommend waiting until you get a notice for an audit to take action to pass the audit. The audit should confirm you already have proper procedures and the associated documentation in place. So, to prepare for an audit now, you need to focus on your procedures and paperwork, not the audit.
The documents may be electronic or on paper. The key is for the documentation to be available and organized.
While the audit itself comes at the direction of the FMCSA, most of the time the auditor is from your state, with the state DOT. Whether it is a state or federal auditor, the audit criteria are the same. Often the audit will be onsite, but more and more audits are being conducted remotely. It is possible you will only need to submit documentation and then answer any questions from the auditor without meeting the auditor.
Communication with the auditor is important. If there are issues with the timing on submitting documents or meeting in person, let the auditor know right away. Most auditors will work with you if you work with them. They know you travel for a living.
What might cause me to fail my New Entrant Audit?
There are a variety of ways to fail the audit. The main ways are to not submit the required documentation and the second is to ignore the regulations (operate as though the regulations are optional).
Here are 4 more simple ways to make sure you don't pass.
- Alcohol or Drug Violations. Not being part of the random drug testing program or using drivers that are out of compliance.
- Driver Violations. Using a driver that does not have a valid CDL or is not medically qualified.
- Operator Violations. Operating with insufficient insurance or without hours-of-service records.
- Repairs and Inspection Violations. Operating a vehicle declared out-of-service (OOS) prior to repairs being made or operating a vehicle that has not passed (or completed) its annual inspection.
What happens If I fail a New Entrant Audit?
If the cause of failure is considered egregious (really, really bad) you may have your operating authority revoked immediately and you are essentially out of business. Unless the inspector made a mistake and you decide to fight it, another career may be the best option.
In many cases, however, even when a carrier does not initially pass the inspection, there is a route to recovery. Normally, prior to the operating authority being revoked, a carrier will be provided an opportunity to submit a corrective action plan (CAP) to address the issues uncovered in the audit. The CAP must be submitted within the specified time period (usually within 15 days) or the authority will be revoked. But if the CAP is submitted on time and accepted the carrier can continue to operate without a revocation of authority. (Of course, you can expect the auditor to check to see if the CAP is implemented).
But that won't happen to me since I'll be prepared! So what happens once I pass my New Entrant Audit?
Congratulations. Once you successfully complete the New Entrant Safety Audit you will still be on a probationary status until you have had your authority for 18 months. Then (assuming no other problems) you will be granted your permanent authority.
Of course, you will still always be subject to regular FMCSA audits at any time after your initial 18 months. Your operational authority is always subject to review by the FMCSA.
Other relevant articles:
Trucking Insurance for Owner-Operators