What to Expect During Your First Safety Audit

So, you want to start a transportation company. The next thing to think about is who are you going to use as drivers, W2 Employees or 1099 Independent Contractors. 

The first thing that you need is a DOT number which is just a free registration number which has no authority to transport freight. To transport freight across State lines, you need to apply for your MC number. With this you can now hire employees or utilize the services of independent contractors.

But wait, you now have to check your applicable state for guidelines to determine whether you pay them as W-2 employees or 1099 independent contractors.

Every state has three departments you will have to check; the work comp, the wage & hour, and the unemployment departments. Even though they are all within the same state they may not have the same guidelines. NTA members have all of this knowledge at their fingertips.

Now, I first reported on this back on June 5, 2024. See NTA News on our website (www.ntassoc.com) 

The following demonstrates what the current administration in Washington, D.C. is doing to small business especially those companies with 1 to 20 employees and/or independent contractors.

The United States Treasury’s Financial Crimes Network (FinCen) now administers a reporting system aimed at all of small business throughout the United States.

Since the first of the year, and any newly established LLC, corporation, LLP and some other business types, including any owner-operator or small fleet who’s filed with their Secretary of State to establish the business, have 90 days to report Beneficial Ownership Information (BOI) to FinCen and the Treasury.

The requirement is also in play for businesses that existed prior to the first of the year. Those owner-operators and many small fleets have much more time to report the deadline to complete the filing with FinCen is the end of 2024.

It now appears that the FMCSA has included sone of this BOI in your First Safety Audit. The following was in a Safety Audit issued to a motor carrier member of NTA in an official letter dated July 1, 2024.

Pay special attention to a new category called Business Records below.

DRIVERS

1. All identifying information for any and all drivers employed and/or used by you and/or operating a commercial motor vehicle under or displaying your USDOT number, during the previous 12- month period. For each of the drivers, the information shall include:
2. Full name
3. Date of birth
4. Social Security Number
5. Commercial driver’s license (CDL) & State of issuance
6. Date(s) of hire
7. Date(s) of termination
8. Driver address(es), telephone number(s), cellular telephone number(s) and any other contact information
9. All driver qualification files for any and all drivers employed and/or used by you and/or operating a commercial motor vehicle under or displaying your USDOT at any time during the previous 12-month period. The driver qualification files for each driver shall include all information required by 49 C.F.R. Part 391, and shall include but not limited to:
10. Medical examination/certificate and/or examination reports.
11. Commercial Driver’s License (CDL) and any other licensing information, including a copy of each driver’s Commercial Driver’s License.
12. Information requested from previous employers.
13. Information received from previous employers.
14. Driver history and records requested prior to hire.
15. Annual certification and list of violations for the driver and annual review of driving record.
16. Date(s) of hire and first date driver was used in a safety sensitive function.
17. Any information indicating disqualification.
18. Information documenting any qualification requirement exemption claimed.

CONTROLLED SUBSTANCES and ALCOHOL TESTING

1. All alcohol and controlled substances testing files, records, and information by 49 C.F.R. Part 40 and/or 49 C.F.R. Part 382 for the previous 12-month period. The documentation shall include but not be limited to:
2. Training program.
3. Control and custody forms for all alcohol and controlled substances testing samples, including pre-employment testing, random testing, reasonable suspicion testing, post- accident testing, and return to duty testing.
4. Test results for all samples collected.
5. Medica Review Officer (MRO) reports.
6. Documentation of driver refusal to be tested.
7. Documentation of probable cause determination for driver testing,
8. Identification and contact information (including address and telephone), and copies of contracts for all laboratories sies, and consortiums.
9. Driver selection and/or pool lists used for random testing.
10. Signed release forms by each driver for release of testing information.
11. Information documenting any testing exemptions claimed.
12. Information documenting the random alcohol and controlled substances testing program including, but not limited to:
13. The average number of drivers positions for current and previous calenda years, and documentation showing how this number was calculated.
14. The number of random controlled substance tests conducted for the current and previous calendar year.
15. The number of random alcohol tests conducted for current and previous year.
16. The number of pre-employment tests conducted during the previous 12-month period.
17. Laboratory monthly statistical reports and annual summary.
18. All records or other documents that refer or relate to company policies and procedures regarding drug and alcohol testing, including correspondence memoranda, and calculations.

HOURS of SERVICE

1. All driver’s records of duty status (RODS), and all supporting documents, for any and all drivers employed and/or used by you and/or operating a commercial motor vehicle under or displaying your USDOT during the previous 6-month period. Supporting documents include, but are not limited to, trip reports and packets, bills of lading and/or shipping manifest documents, scale receipts, trip permits, roadside inspection reports, fuel receipts, fuel billing reports, expense records, telephone records, motel receipts, trip envelopes, pay records, delivery receipts, toll receipts, port of entry receipts, dispatch sheets, load and offload times and dates, and any other supporting documents. 
2. All dispatch and routing records for any and all drivers employed by and/or used by you, and/or operating a commercial motor vehicle under or operating your USDOT number, and all transportation by, for, or on behalf of you and/or under your USDOT number occurring the previous 6-month period.
3. All payment records, including any and all records or other documents that refer or relate to payments made to owners, managers, consultants, employees, mechanics, drivers or others.
4. All invoices, bills, and memorandums of agreement wit agents, customer, and/or brokers or other related documents that ae used by you to claim reimbursement for transportation related services rendered for the previous 12-month period.

ACCIDENTS

1. Accident Register and al files pertaining to any and all commercial motor vehicles (as defined in 49 C.F.R. §390.5) during the previous 12-month period.

VEHICLES

1. Identification for any and all commercial motor vehicle(s) owned and/or leased and/or operated by you r on your behalf and/or under your USDOT number during the previous 12-month period, including those operated for you by subcontractors and/or independent contractors and/or leased drivers (including owner/operators). The information including an and all records or other documents that refer, relate to or contain identification information, and shall include the make, model, year, serial number, VIN number, gross vehicle rating (GVWR), license plate number and licensing state, company identifier, and tire size.
2. All vehicle registration documentation for any and all commercial motor vehicle(s) owned and/or leased and/or operated y you or on your behalf and/or under or displaying your USDOT number during the previous 12-month period.
3. All documents related to acquisition and/or use of any and all commercial motor vehicle(s) owned and/or leased and/or operated by you or on your behalf and /or under or displaying your USDOT number during the previous 12-month period, including all documents related to or evidencing purchase, transfer and/or leasing of commercial motor vehicle(s). For all leased vehicles, a copy of the lease agreement shall be included.
4. All vehicle maintenance records and the periodic (annual) inspection report for any and all commercial motor vehicles owned and/or leased and/or operated by you and/or on your behalf ad/or under or displaying your USDOT number during the previous 12-month period, including those operated by or for you by subcontractors and/or independent contractors and/or leased drivers (including owner/operators). The documentation shall include all information specified in49 CFR Part 396.
5. Identification information for all mechanics and/or maintenance facilities, including contact information (address and telephone) for each you use or have used to inspect, repair and/or maintain any all commercia motor vehicles owned and/or leased and/or operated by you and/or on your behalf and/or under or displaying your USDOT number during the previous 12-month period, including those operated by or for you by subcontractors and/or independent contractors and/or leased drivers (including owner/operators).
6. All records referencing or related to qualifications, certification, and/or training of any and all mechanics and inspectors who have inspected, maintained and/or repaired any commercia motor vehicles owned and/or leased and/or operated y you and/or on your behalf under or displaying your USDOT number during the previous 12-month period, including those operated by or for you by subcontractors and/or independent contractors and/or leased drivers including owner/operators).
7. All driver vehicle inspections reports (DVIRs) by any and all drivers employed and/or used by you during the previous 3-month period.
8. All agreements, lease documents, records, or other documents between you and any other motor carrier in effect during and/or related to the previous 12-month period.
9. Total Fleet Mileage for all commercial motor vehicles owned, leased, and/or operated by you or on your behalf and/or under or displaying your USDOT number for the previous 12-month period. 

BUSINESS RECORDS

1. Financial statements, tax statements or any other verifiable documentation which evidences and demonstrates your gross revenue for the previous 12-month period.
2. Business records, including corporate charters, articles of incorporation, bylaws, article of organization, operating agreements, partner agreements, or other documents identifying your company’s structure, officers, directors, and/or manager and their responsibilities.
3. Identification information for all company/corporate owners, partners, directors, officers, members, shareholders, and managers for, and individuals having a financial interest in your company, including current contact information (address and telephone) for each.
4. Identification information for all individuals responsible for compliance with Federal motor carrier requirements, including safety director(s), manager9s), and dispatcher(s).
5. Any and all mailing addresses and physical location(s) used by you, currently and during the previous 12-months. Include copies of any purchase, lease, rental, and/or other agreements for all locations you use.

Registration and Insurance Information

1. All safety and operating authority registration issued by FMCSAS, including any and all correspondence related to all USDOT numbers and Motor Carrier identification numbers (MC numbers) for all entitles in which you, and and/or any company/corporate owner, partner, director, officer, member, shareholder, or manager, have or have had any financial interest, or management and/or operational responsibility.
2. All documentation evidencing compliance with minimum liability insurance requirements including Form(s) MSS 90 and/or Form(s) MCS 82 and proof of Bodily Injury and Property Damage (BIPD) for the previous 12-month period including copies of all applications made for insurance.
3. Identification and contact information (address and telephone) for all insurance companies used by you related to motor carrier operations for the previous 12-month period.
4. Documentation and/or list showing designation of process agent for each state in which you operate and/or have operated during the previous 12-month period.

In conclusion, do your due diligence as far as starting capital is required and have a business plan. Remember, you should have all this information on your computer as the FMCSA only has to give you a 72-hour notice and are requesting documents be sent electronically as more and more offsite safety audits are the norm.

The above requirements should be in place before the first wheel turns because if not you will be in violation of OP-1, Sec. 4, Safety Certification, item 30-31 which states that you answered YES, that you are familiar with all the Federal Motor Carrier Safety Regulations to get your MC number and that you will operate your commercial motor vehicles in accordance.

Further, under 49 U.S.C. §521 & §§525, failure to provide access to equipment, lands, building, property, or records demanded may result in civil penalties, criminal penalties, an operation out-of- service order, and suspension or revocation of registration issued under 49 U.S.C. Chapter 139.

Welcome to the Big League’s.