What We Looked At
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.