CONSIDERATIONS FOR HASSLE-FREE GOVERNMENT INSPECTIONS: THE BEST DEFENSE IS A STRONG OFFENSE
As we approach the busiest season of the year, fireworks retailers and display companies can expect an inspection from one, if not several, law enforcement and regulatory agencies. These inspections, oftentimes unannounced, are deliberately timed to occur during your busy season due to the increased level of activity and the corresponding increase in the odds that a violation will be found. The best thing you can do is be prepared for the inspection, and the purpose of this article is to provide you some helpful tips in smoothing out the process.
The answer is relatively straightforward and simple—training and review. Many government agencies have established regulations containing mandatory training requirements that you must review and follow, and it is equally vital that the training program is properly documented, updated and kept in its proper format. One of the first documents that an inspector will likely ask to see is your training records. In addition to making sure the required training is both performed and documented correctly, you should consider implementing a formal compliance program; this can be as simple as having the designated compliance employee review your shipping papers, walk the floor of your facility, and inspect your packages to confirm that everything remains in compliance. It is also prudent to periodically review your security plan to make sure that it continues to satisfy prevailing requirements.
You only have one chance to make a good first impression, so your receptionist (should you have one) must be instructed to promptly announce the arrival of any government inspector directly to senior management who, in turn, sets your inspection protocol in motion. The protocol should include notifying your designated lead compliance employee and the compliance assistant of the presence of the inspectors. For purposes of this article we will call the designated compliance employee the Compliance Officer. Importantly, the compliance assistant serves only in the capacity of a witness to all events and conversations, and the compliance assistant and all other employees should be instructed not to say anything nor interfere with the inspection process.
The designated compliance employee should be thoroughly familiar with the inspection process as well as any procedures specific to each agency (e.g., DOT, ATF); this employee will also be responsible for providing initial responses to any questions and comments made by the inspector(s) and, therefore, must understand how to both frame and furnish the appropriate and proper response
The two employees should introduce themselves to the government inspector(s) and explain that each has been designated by the business to participate in the inspection process. This procedure will help you to keep the facts and events straight and, at the same time, avoid the confusion and inconsistency that arises when several individuals are involved in the inspection process. Oftentimes, several inspectors arrive and fan out around the business premises and in this instance you should assign an employee to accompany each inspector. However, it must be explained to the inspectors that these employees are not authorized to respond for the business; in turn, the employee should be instructed to only assist, observe and report. Further, because government inspectors have the right to ask questions of any of your employees, it is prudent that you confirm that all employees are fully aware of their roles but, nonetheless, they should also be advised that the company Compliance Officer has the main responsibility for any inspection. All questions from any inspector can be directed to the Compliance Officer for the convenience of all parties and to avoid confusion and minimize mistakes. Also, the Compliance Officer should institute a practice of periodically performing an informal inspection of the business operations for purposes of identifying and correcting any potential violations in advance of any formal inspection.
The compliance officer must be user-friendly; meaning, he or she must be able to remain calm in the face of government inspectors who may act imperiously, arbitrarily and capriciously. The inspection process is not the time to argue (you will be provided an opportunity to dispute any violation that may result); rather, it is a time to listen and observe. Over time, the Compliance Officer will come to understand the peculiarities, temperament and tolerance of each inspector and, as a result, should be able to anticipate issues and reactions; over the course of time, a comfort level by and between your employee and the inspector may develop.
A written record of the time the inspection began and ended should be made, together with thorough notes describing what was said by the inspector(s), as well as what was inspected and observed, and for how long. You may want to consider providing each employee involved in the inspection process with a camera to photograph the subject or location of the alleged violation. The photograph should be dated and signed by the photographer for purposes of authenticating it later. Documenting the inspection in this manner may assist in avoiding issuance of questionable violations by the government inspector. In the unlikely event an inspector becomes irate about the presence of a camera, have your employee calmly explain that your business has instituted this procedure as a standard operating procedure and, thus, what may, at first, be unfamiliar will, over time, become routine. If deemed necessary, you can always instruct your employee to advise the inspector that, in the spirit of cooperation, the employee will refrain from taking photographs (during the inspection process). Make a written record of the inspector’s demand to cease photographing, specifying the date, time, and the substance of the inspector’s objections; and, thereafter, photograph the subject or location of the inspector’s violations outside the presence of the investigator(s). All of the written notes and photographs should be maintained in a separate file bearing the date and identity of the agency for future reference, if necessary. You may also consider using a recording device to record your conversations for purposes of accuracy, although we recommend advising the investigators of the presence of any recording device as well as any video-surveillance devices (e.g., closed-circuit cameras) actively in use on premises.
Be wary of investigative techniques to elicit information from you that the agent would otherwise not be entitled to. Investigators are trained to ask for items in the conditional as opposed to the imperative: “if it is not any trouble, can you give me a copy of XYZ”; or, “would it be possible to make a copy of XYZ for me?”; or, “you have no objection to producing a copy of XYZ for me, do you?”; or, “I would appreciate a copy of XYZ.”. In all these examples, you have the choice to respectfully refuse to provide a copy; so, in this sense, the request is conditioned upon your voluntarily cooperating. By distinction, a demand, or order, for a document (coupled with the consequences of non-compliance) must be within the purview of the investigation and the investigator’s jurisdiction. An investigator is not permitted to conduct a ‘fishing expedition’, especially when the investigator strays into uncharted waters.
In conclusion, it is important that the inspection process be treated with utmost seriousness. Suffice it to say, a proactive approach to inspections is likely to be the difference between success and failure. Those businesses that do not already have a Compliance Officer should seriously consider designating one.
