Effectively Conducting an Internal Code Compliance Audit Internal Audit Effectively Conducting an Internal Code Compliance Audit Practice and Theory Presented by Shawn Brink  August 24th, 2016

Purpose Compliance Structure Roles & Responsibility Types of Audits Post Audit

What is an audit?

“A careful check or review of something.” Audit “A careful check or review of something.”

What do you think of when you hear AUDIT?

V I T A L Purpose of Audits Validation Improvement Teamwork Analyze Learn V I T A L

Compliance Structure

Compliance Structure SCA SNV NNV SAZ CAZ Corporate

Roles & Responsibility

Corporate: Compliance Staff Responsibilities Understand and interpret Company policies & procedures required by the code. Act as a liaison between SWG and the state commission (ACC, PUCN, CPUC) or DOT. Provide guidance on issues during audit. Track audit issues & provide reports. Coordinate & facilitate audit activities.

Corporate: Compliance Staff Responsibilities Coordinate State, Federal or internal audit schedules. Conduct exit reviews for internal audits. Distribute internal audit reports. Facilitate & coordinate Company responses to State & Federal audit reports with the Division personnel. Communicate with key Division personnel.

Division/District Responsibilities Be prepared; know your system. Anticipate potential field visit locations and review facilities and records. Provide documents to inspectors in a timely manner. Have key employees available. Timely and good communication with Compliance Staff.

Division/District Responsibilities Be aware of audit activities and surroundings. Advise all employees that an audit is in progress and of time parameters. Carefully schedule field activities to avoid conflicts with audit. Share audit activity updates from Compliance Staff with appropriate personnel.

Division/District Responsibilities Plan ahead on who will be responsible for each portion of the audit. Keep the inspectors informed (Staff). Be friendly and cooperative.

Types of Audits

Types of Internal Audits O&M Specialized Procedure Based

O&M Internal Audits Comprehensive nine (9) week O&M audit conducted in the divisions and districts annually. Simulation of the upcoming State Regulatory Audit. Consists of document review & inspections of facilities in field.

O&M Internal Audits Week 1 – Bullhead City Week 2 - Yuma Week 3 - Tucson Week 4 - Phoenix Week 5 - Phoenix Week 6 – Casa Grande Week 7 – Sierra Vista Week 8 - Globe Week 9 – Clifton/Morenci

O&M Internal Audit: Documentation Review documents prior to submitting to an inspector (last two years). Have facility lists readily available for each O&M category. Provide only what can be requested or reasonably reviewed.

O&M Internal Audit: Documentation Keep discussions on O&M activities to a minimum. Answer questions directly related to work performed and minimize explanations. Don’t speculate; if you do not know, say so. Seek and stick to the facts - never guess.

O&M Internal Audit: Documentation Personnel in audit room should be kept to a minimum. Take notes on audit discussions. Photo copy any documents given to inspectors and provide a copy to Division and Staff Compliance personnel.

O&M Internal Audit: Field Inspections Route field inspections and provide copies to key audit personnel. Use the most direct route; know where you are going. Keep group informed of changes to route.

O&M Internal Audit: Field Inspections Inspectors will normally want a pipe-to-soil Corrosion read at each facility. Have appropriate personnel meet at a facility for the scheduled time to limit the size of the audit caravan. Field personnel should answer audit questions to the best of their ability. It is acceptable to refer to the Operations Manual.

Specialized Internal Audits Specialized audits (Damage Prevention, MAOP, Idle Riser, Isolated Steel, etc.)

Procedure Based Audits Compliance prepares different procedure based questions on a variety of tasks. Compliance Specialists perform regular procedure based audits. The purpose of these audits are to enhance employee/contractor awareness.

Post Internal Audit

Post Internal Audit Complete work for any issues identified during the audit prior to the end of the audit, if possible. Debrief / Communicate What can we learn from the audit?

Post Internal Audit Exit reviews are conducted for internal audits Audit results sent and reviewed with key management personnel prior to final report Audit results have been used for Self-Identification

Teamwork & Cooperation are the Key! Thank you for your time! Questions?

Questions?