Navigating a DOT audit can be a daunting task for trucking companies. The outcome of such an audit can have significant implications for the company's operations and compliance with federal regulations. DOT audits result in three possible ratings: Satisfactory, Conditional, or Unsatisfactory, each carrying its own meaning. Failing a DOT audit can lead to fines, corrective action plans, and even the risk of losing the company's DOT number. In previous articles, we described what a DOT Audit is, the primary reasons they occur, and what happens during an audit. In this article, we will explore the different outcomes of a DOT audit, the main reasons why a trucking company might fail, and the steps that can be taken in case of failure or fines.
What are the different outcomes of a DOT Audit?
Each of the DOT audit categories are reviewed and rated Satisfactory, Unsatisfactory, or Conditional.
Satisfactory – This distinction means the FMCSA has determined the company adequately meets the safety controls in place and complies with federal requirements.
Conditional – This rating means that the FMCSA found at least one violation or non-compliance with federal requirements, but the company does not pose an immediate safety hazard.
Unsatisfactory – This rating means the FMCSA has found serious violations or non-compliance with federal requirements that may cause safety hazards imminently.
What are some of the main reasons why a trucking company might fail a DOT Audit?
Audits will result in the investigator or auditor giving the carrier a satisfactory, conditional, or unsatisfactory rating. Satisfactory is a passing grade and conditional ratings mean violations that could result in fines and an action plan the carrier must follow to show improvement. Unsatisfactory ratings indicate the carrier had major violations which could lead to hefty fines and a follow-up audit to ensure the carrier implemented the actions in the corrective plan to improve their safety measurements. If a carrier does not pay fines or show improvement, they can be at risk of losing their DOT number.
Common information investigators or auditors will review that could result in an audit failure include:
Drug violations of any kind
Unlicensed drivers or drivers operating without proper licenses
Drivers that are not medically qualified
Driver log violations
Record falsifications
Missing or incomplete maintenance records
Operating vehicles that have not received proper repairs or that failed previous inspections
What can I do if I fail a DOT Audit? What can I do if I am fined?
Depending on how severe the carrier violation is, the resulting penalty could range from a simple warning to financial penalties. The FMCSA investigator or auditor will provide the carrier with a written notice detailing which violations caused the carrier to fail the audit alongside a Corrective Action Plan (CAP) for the carrier to follow. CAP describes the actions carriers plan to take to address the identified violations. Carriers must acknowledge they have received and are adhering to the plan by submitting their CAP to the FMCSA Service Center within the specified time that was on the Notice of Failure. If the CAP is not submitted, or if the carrier does not implement the corrective actions, they are subject to losing registration with the FMCSA.
New carriers or trucking companies get extra attention as they learn the rules, so every early violation could lead to closer, long-term monitoring by the DOT.
Carriers should know that they have 30 days to respond after receiving a Notice of Claim from the FMCSA and have the opportunity to contest the proposed fines. The options for a carrier after receiving a Notice of Claim are:
Argue your case before a DOT Office of Hearings Judge to have violations removed or fines reduced
Pay the fine in full
Legal Arbitration – which admits to the violations but seeks to lower the fine
If the carrier fails to respond in 30 days, the FMCSA issues a “Notice to Default and Final Agency Order” which gives the carrier 20 additional days to file a petition asking for reconsideration. This is the final opportunity to contest before a carrier is forced to pay all fines.
Why does all this matter to you?
Passing a DOT audit requires a great deal of organization and preparation. It also requires being a good driver or trucking company owner or manager. Accurately maintaining company records, documenting driver qualifications, recording and reviewing logs, and so on will help you stay organized and be better equipped to handle the audit process. Managing the information that you will need to have available during an audit requires a system that works for you whether it’s a filing cabinet or a third-party service that handles some of the work. Monitoring CSA safety scores and maintaining updated safety management procedures will allow any carrier to be prepared in case they are selected for an audit.
Learn more about how to prepare for a DOT audit by downloading our DOT Audit Checklist.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC - Copyright 2023 - does not assume responsibility for any omissions, errors, or ambiguity contained herein. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.