The DOT’s Office of Inspector General (OIG) recently issued an Audit Report  finding that PHMSA’s oversight of state pipeline safety programs is not sufficient to ensure that states comply with program evaluation requirements and properly use suspension grant funds. The audit, prompted by NTSB’s investigation of the September 2010 San Bruno, CA tragedy, assessed PHMSA’s policies, procedures and oversight activities applicable to states certified under PHMSA’s Natural Gas Program. 

In conducting its audit, OIG reviewed 400 program evaluation requirements for 5 randomly selected states, and detected 135 areas of non-compliances, whereas PHMSA identified only 12. The Report found that states could not provide evidence that all inspections were conducted within required timeframes, did not have procedures for all types of inspection activities, and lacked trend analyses of operators’ annual reports. The OIG also found that the calculation method used to determine inspector staffing needs has not been updated since the 1990s, despite significant changes in pipeline safety regulations and practices (e.g., Integrity Management, OQ, etc.). In light of these shortcomings and others outlined in the Report, OIG made recommendations in 7 areas, noting that until such improvements are made, “the Agency cannot be sure that all safety weaknesses are identified and mitigated.”

  • Revise and periodically validate inspector staffing formulas.
  • Develop and add to State Program Guidelines minimum training requirements, tracking of distribution of revised inspection forms, and standards for inspection intervals.
  • Review adequacy of inspection procedures as part of the annual program evaluation.
  • Develop guidance to ensure states employ risk analysis methods for scheduling inspections.
  • Document procedures for conducting triennial grant reviews.
  • Train PHMSA evaluators to effectively determine whether states have complied with all program evaluation requirements, issue notices of non-compliance, and ensure corrective action is taken.
  • Implement a plan for auditing states’ use of suspension funds.

 PHMSA was provided an advance draft of the OIG Report and concurred or partially concurred with the Report’s recommendations in April 2014. OIG has requested that that the Agency reconsider its response to one recommendation and provide further information in support of its actions taken or planned for the six other recommendations.