According to data from the Pipeline and Hazardous Materials Safety Administration (PHMSA), more than 3.3 billion tons of hazardous materials (hazmat) are transported within the United States each year. As PHMSA is responsible for evaluating the fitness of companies that transport hazmat, we initiated this audit with the following objective: to assess PHMSA’s implementation of Federal requirements for conducting fitness reviews of applicants seeking hazmat approvals or special permits. Specifically, we assessed (1) PHMSA’s three-tier process for reviewing applicants’ fitness and (2) internal controls the Agency employed to conduct those reviews and communicate the results, as required.
What We Found
PHMSA is improving its three-tier hazmat fitness review processes, but its timeliness goal is not always achievable. Specifically, PHMSA processed most Tier 1 reviews within DOT’s 120-day goal but took longer for Tiers 2 and 3. PHMSA investigators did meet Agency standards for inspecting and developing fitness memorandums. PHMSA is also improving its methods for tracking Tier 2 and Tier 3 applications and for documenting decisions regarding Tier 3 inspections. However, its software systems do not communicate with each other, and the Agency does not require fitness memorandums to identify relevant inspection report numbers—factors that will hinder PHMSA’s efforts to meet its timeliness goal or identify potential problems. PHMSA also has internal control gaps for conducting hazmat fitness reviews, although it is working to address those gaps. In addition, some data were not correctly correlated to company profiles, which could impact the accuracy of Tier 1 reports and fitness reviews. Finally, PHMSA did not fully publicly communicate, as required, the status of applications delayed more than 120 days. Until PHMSA addresses these internal control gaps, it has less assurance its application review process will meet Federal requirements.
We made 12 recommendations to improve PHMSA’s implementation of Federal requirements for conducting fitness reviews. PHMSA concurred with all 12 recommendations, and we consider them resolved but open pending completion of planned actions.
Closed on 05.13.2022
No. 1 to PHMSA
Develop and implement a plan to complete an automated tool for tracking safety profile evaluations.
No. 2 to PHMSA
Conduct a historic analysis and use the results as the basis for timeliness goals for Tier 2 evaluations and Tier 3 inspections in the revised Field Operations Manual .
No. 3 to PHMSA
Develop and implement a plan that updates the interagency agreement for processing approval and special permit applications, including details for conducting Tier 2 evaluations and Tier 3 fitness inspections within the 120-day goal.
No. 4 to PHMSA
Update the various software for processing applications by adding a field for the fitness inspection report number.
No. 5 to PHMSA
Update the Case Management System by adding a field to identify the application tracking number associated with a fitness inspection.
No. 6 to PHMSA
Develop and implement a plan to complete revision of the Field Operations Manual , directing that fitness memorandums include additional information identifying relevant inspections, using quality control items, and conducting risk assessments.
No. 7 to PHMSA
Synchronize the revised Approvals Program Desk Guide and the revised risk-based guidelines for referring foreign cylinder applicants.
No. 8 to PHMSA
Develop and implement a plan to complete an assessment of PHMSA oversight of U.N. Third-Party Packaging Certification Agencies and other independent entities that monitor approval and special permit holders.
No. 9 to PHMSA
Develop and implement guidelines on prioritizing fitness inspections along with other types of inspections.
No. 10 to PHMSA
Develop and implement a mechanism to improve the linking of applicants with incident and enforcement data.
No. 11 to PHMSA
Develop and implement a plan to revise application processing software user guides, with instructions to identify blank automated fitness reports.
No. 12 to PHMSA
Develop and implement a plan to update PHMSA's website on delayed application status with all required data.