Program
*1 PRO^'
Doc ID 310F21001
Office of
Enforcement
and
Compliance
Assurance
March 2021
EPA Celebrates Key Anniversaries by
Releasing Updated Audit Policy FAQs
This past year marked several major anniversaries in the history of EPA's Audit Policy Program,
including the 35th anniversary of EPA's first environmental auditing policy statement, the 25"'
anniversary of the first Audit Policy, the 20th anniversary of the current versions of the Audit Policy and
Small Business Compliance Policy, and the 5th anniversary of the launch of eDisclosure. EPA is taking
the occasion of these various anniversaries to celebrate the success of the Audit Policy Program, remind
regulated entities about the benefits of the various self-disclosed violation policies, and inform the
public about updated Frequently Asked Questions.
Interim
Environmental
Auditing Policy
Statement
Nov. 8, 1985

Incentives for
Self-Policing:
Discover,
Disclosure,
Correction and
Prevention of
Violations Dec.
22,1995

Small
Business
Compliance
Policy Apr.
11, 2000

eDisclosure
portal
launched
Dec. 9,
2.015
• •••••••

Final
Environmental
Auditing Policy
Statement July
9,1986

Incentives for
Self-Policing:
Discover,
Disclosure,
Correction and
Prevention of
Violations Apr.
11, 2000

Interim
Approach to
Applying the
Audit Policy to
New Owners
Aug. 1, 2008
Audit Policy
Refresh
May 15,
2018
Figure 1: Major Milestones in the Audit Policy Program
EPA has a robust Audit Policy Program that incentivizes the voluntary discovery, disclosure and timely
correction of violations by providing for reduced penalties when the conditions of the applicable self-
disclosed violation policy are met. EPA's Audit Policy Program is comprised of three self-disclosed
violation policies, and the eDisclosure system which is an online system for receiving and automatically
processing violation disclosures under two of the self-disclosed violation policies. As described further
below, an entity that self-discloses a violation in a manner that satisfies the conditions of the applicable
self-disclosed violation policy may quality for a 75 or 100% reduction of the gravity component of any
penalty. While the conditions of the three self-disclosed violation policies vary slightly, each requires
voluntary and independent discovery of the violation, as well as prompt disclosure and correction. In
addition, these self-disclosed violation policies generally are not available for repeat violations, or

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violations that resulted in serious actual harm, or may have presented an imminent and substantial
endangerment. More information about EPA's Audit Policy Program generally is available at
https://www.epa.gov/compliance/epas-audit-policy.
From 1995-2020, over 10,000 entities voluntarily self-disclosed
violations at nearly 28,000 facilities under EPA's Audit Policy
Program. More than half of these self-disclosed violations have been
for Emergency Planning and Community Right-to-Know Act
(EPCRA) reporting violations.
Audit Policy EPA's Audit Policy ("Incentives for Self-
Policing: Discovery, Disclosure, Correction and Prevention of
Violations," 65 Fed. Reg. 19618 (Apr. 11, 2000)), safeguards human
health and the environment by providing several major incentives
for regulated entities to voluntarily discover and fix violations of
federal environmental laws and regulations. To take advantage of
these incentives, regulated entities must voluntarily discover,
promptly disclose to the EPA, expeditiously correct, and prevent
recurrence of future environmental violations. See text box for
conditions that must be met to qualify for penalty mitigation.
More specifically, under the Audit Policy an entity may receive:
•	Reduction of 100% of gravity-based penalties if all nine of the
Audit Policy's conditions are met. The EPA retains its discretion to
collect any economic benefit that may have been realized as a result
of noncompliance.
•	Reduction of 75% of gravity-based penalties where the disclosing
entity meets all of the Audit Policy's conditions except for
Condition 1 - Systematic Discovery.
In addition, if all of the applicable conditions under the Audit Policy are met, EPA will not recommend
criminal prosecution for entities that disclose criminal violations.
Small Business Compliance Policy The Small Business Compliance Policy. 65 Fed.
Reg. 19630 (Apr. 11, 2000), applies to companies with 100 or fewer employees and provides penalty
mitigation as an incentive to participate in on-site compliance assistance programs and to conduct
environmental audits to discover, disclose and correct violations in a timely manner. Unlike the Audit
Policy, a small business may qualify for 100% reduction of the gravity component of any civil penalty
even if the violation is not discovered as part of a systematic audit as well as have more time to correct
the violations. More information about the Small Business Compliance Policy can be found at
https://www.epa.gov/compliance/small-business-compliance.
Audit Policy
Conditions
1.
Systematic

Discovery*#
2.
Voluntary Discovery*
3.
Prompt Disclosure*
4.
Discovery and

Disclosure

Independent of

Government or Third-

Party Plaintiff
5.
Correction and

RemediationA
6.
Prevent Recurrence
7.
No Repeat ViolationsA
8.
Other Violations

Excluded*
9.
Cooperation*
*	Modified for New Owner Audit
Policy
#	Not applicable to Small Business
Compliance Policy
A Modified for Small Business
Compliance Policy
PROGRAM SPOTLIGHT
2

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New Owner Audit Policy epa developed the
New Owner Audit Policy ("Interim Approach to Applying
the Audit Policy to New Owners," 73 Fed. Reg. 44991
(Aug. 1, 2008)), to provide additional incentives to new
owners to make a "clean start" at their newly acquired
facilities. The policy applies to new owners that meet all the
conditions of the New Owner Audit Policy, and within 9
months of the transaction closing either (i) promptly
disclose violations to EPA, or (ii) enter into an audit
agreement with EPA.
New owners meeting the conditions of the New Owner
Audit Policy potentially can receive additional penalty
reductions beyond what is provided in the Audit Policy, and
penalty mitigation for a greater range of environmental
violations than would be eligible under the Audit Policy.
EPA also modified the conditions related to systematic
discovery and prompt disclosure as applied to new owners.
Moreover, as part of entering into a new owner audit
agreement, a new owner can negotiate audit scope and
timing, as well as when it will disclose any violations found
as part of its new owner audit (e.g. when it will file its final
report). More information about the New Owner Audit
Policy is available at https://www.epa.gov/compliance/epas-
interim-approach-applying-audit-policv-new-owners.
eDisclosure System
In 2015, the EPA modernized
implementation of its self-
disclosed violation policies by
creating a centralized web-based
eDisclosure portal to receive and
automatically process self-
disclosed civil violations of
environmental law. Under the
automated eDisclosure system,
large and small businesses are
quickly able to resolve certain
routine types of disclosures,
saving time and resources for
Figure 2 Five Fiscal Year Snapshot of Number of eDisclosure Submissions	regulated entities and EPA. The
Updated Frequently
Asked Questions
As part of its effort to renew
emphasis on, and interest in, the
Audit Policy Program, EPA
updated and consolidated existing
interpretive guidance and FAQs.
EPA's Audit Policy Program:
Frequently Asked Questions
supersedes the Audit Policy
Interpretive Guidance (1997), Audit
Policy: Frequently Asked Questions
(2007) and eDisclosure FAOs
(2015) in part because some of the
questions and answers in those
three documents are no longer
relevant. EPA 's Audit Policy
Program: Frequently Asked
Questions incorporates issues
discussed in those three documents
that remain relevant, including any
updates, in a user-friendly manner.
EPA Voluntary Disclosure Programs
eDisclosures Submissions
FY 2016 - FY 2020
499
509
517
566
622
FY 2016	FY 2017	FY 2018	FY 2019	FY 2020
PROGRAM SPOTLIGHT
3

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