Environment, Health & Safety (EHS) Audit: Tips for Cannabis Businesses on Audit Day | Vicente Sederberg LLP

[co-author: Jace Pohlman]

Environmental, Health, and Safety (EHS) audits can come in many varieties: regulatory agency inspections (scheduled or surprise), internal company requirements, maintenance of certifications, or during an acquisition or sale. In part two of this three-part VS Insights series focused on EHS audits, we will dial in on the EHS audit day. (If you missed it, read part 1: How to Prepare.)

Preparing ahead of time for an audit can be stressful, but nothing compares to the moment when an auditor walks through your door. Let us help you conquer the fear of the unknown and provide some tips to help lower your stress and increase your chances of a clean and perfect audit day.

Personnel Considerations

How your personnel responds to the auditor’s questions can make or break an audit, so make sure your staff is well-equipped to answer questions. In the case of a scheduled audit, management may be aware the auditor is coming, but specific departments may not get word. In this case, a companywide meeting is recommended, though not required. At a minimum, it’s best to speak with department managers or those heavily involved with an audit area so they are prepared and ready to answer any potential questions the auditor may have.

In the case of a surprise audit, it’s best to have a plan in place ahead of time. This plan should include determining who greets the auditor and who is assigned to inform on- and off-site staff.

The Basics Steps of EHS Audit Day

As we discussed in part one of the series, audits can cover anything from worker safety checks to compliance with state and federal environmental agency regulations. While there’s no set template, audits are typically performed in the following steps:

Step 1: Pre-meeting

  • Audits typically begin with a meeting between the auditor and management personnel to discuss the purpose and scope of the audit.

  • Discuss whether photography is allowed, especially if it’s an external audit.

Step 2: Inspection of Facility

  • Before taking the auditor through your facility, brief them on any safety requirements.

  • Once ready, the auditor will walk the facility to check for regulatory compliance of specific operations and departments in the business. This could be looking at product storage spaces or viewing water drainage systems and waste removal processes.

Step 3: Paperwork Review

  • Next will be a review of internal operations. The auditor will look at the facility and department operations, worker health and safety concerns, and overall facility operating procedures.

  • Examples could include a review of standard operating procedures of a department to business records showing certification compliance from the past year.

Step 4: Interviews

  • In addition to viewing the facility, auditors will often interview business personnel and view documents and records relevant to the audit.

Quick Tips for the Big Audit Day

  1. Answer truthfully and honestly. It seems simple enough, but it’s crucial to answer honestly. It is much better to say “I don’t know” or “I don’t have that document” rather than be caught in a lie.

  2. Don’t hide or create information. Provide the information you physically have on hand. (Don’t run into a back room and try to quickly whip up a document and back date it.)

  3. Be calm and courteous. Auditors are just trying to do their jobs, and a little kindness will go a long way.

  4. Stay organized. You want to get an auditor in and out quickly. The more organized you are, both in terms of where documents are located and flow through the facility, the quicker the audit process.

  5. Don’t assume what’s being asked. If you’re not clear about the question, ask for clarification.

  6. Plan your facility tour ahead of time. Take into consideration safety precautions for the tour and identify a route that hits on all the major inspection topics for the auditor.

  7. Keep everyone on the same page. Meet with department heads and employees so they know the audit topics and are not caught off guard by questions or inspection by the auditor.

  8. Make copies. Ensure the copies and files the auditor needs are readily available for review. The faster they get through the records, the quicker the audit is completed.

  9. Take photos of everything the auditor photographs. You never know when facility pictures may get swapped, so be sure to document all photographs the auditor captures. Or better yet, offer to take the photos yourself and send them to the auditor.

Audit days can bring heightened stress for everyone in the business. We hope this information helps you understand what to expect and provides some helpful tips to get your cannabis business through an often long and exhausting day.

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