Tag Archives: aviation consulting

Good Cop, Bad Cop: Consulting or Auditing?

I pop into a popular industry forum from time to time to see what’s on people’s minds and recently saw a pretty typical post in which someone was asking for recommendations for an auditor. The gentleman got several responses but some cautioned about auditors who cross into consulting while conducting an audit. Another poster jumped in with a comment about how unethical it is to consult while auditing. That’s true. Just like you shouldn’t provide instruction while conducting a checkride, you shouldn’t consult while auditing. It’s basically cheating. Either the operator is prepared and meets the audit standard when the auditor arrives or they don’t, right? Further, one fundamental of auditing is that an auditor shouldn’t evaluate their own work. If the auditor gives the operator “the answer”, that’s exactly what happens.

It’s so easy on paper isn’t it? Audit – don’t consult. In reality, it’s a difficult line to walk. I don’t love auditing because I truly enjoy helping people and when I’m auditing I feel like the “bad cop”. Obviously an audit can be conducted in a respectful, friendly manner. There’s no need to be rude or unkind. But it can be hard to tell an operator – especially a company with friendly staff who are eager to do well – that their hard work isn’t quite enough to meet the standard. And they often ask, “What do you recommend?” As an auditor I really can’t answer that except to suggest they re-read the audit standard and any applicable guidance or other references. I can’t “fix it” for them.

The other point noted in the forum was the practice of jacking up a bill by consulting during an audit. That’s a very unethical practice. An audit is a fixed service – typically preparation time, on-site time, report drafting time – and those should all be included in a fixed fee. The time needed to audit an organization can vary based on the size and complexity of the operation but an auditor should obtain those details before they present a proposal. An experienced auditor will have an idea of how long a particular audit will take and should be able to identify a fixed, fair fee. Any auditor that adds on to the bill because they provided additional services during the audit is doing the operator a real disservice.

What if an operator really likes the auditor’s perspective, personality, and skill set and would like the auditor to help with improvements? Certainly some of my clients are former “auditees” of mine, but there’s a professional way to approach this. I thank the operator for their interest but tell them we need to finish the audit process before we discuss additional work. If they need help closing their audit findings, I refer them to a trusted colleague. I stay out of the process until the operator is able to present acceptable corrective actions (or otherwise finish the audit in accordance with the particular audit standard) and I am able to write the report and recommend the operator for the audit registration. Only after the audit process is completely finished am I willing to discuss an opportunity to help the operator on additional projects.

I try to keep the line very clear between auditing and consulting for a number of reasons. Aside from the fact most audit standards (and the very intent of auditing) prohibit consulting while auditing, I despise when unscrupulous consultants create their own work by bringing up issues that aren’t really there. “Your manual isn’t worded exactly as I would word it, but if you hire me, I can fix it.” What is that about? As an auditor, I don’t care if you exercise operational control through iPhone apps and fancy software systems with giant NASA Houston-type screens or with smoke signals so long as your operational control system complies with requirements and is effective.

So here are a few tips from an auditor/consultant to help avoid a good cop, bad cop conflict.

1. Don’t accept a proposal for an audit that includes a variable fee for services outside of the audit itself. Fixed rate + travel expenses = fair proposal. Maybe there’s a situation where a variable rate is appropriate for an audit but seriously – I can’t think of one.

2. It’s cool if you like your auditor and want their expertise after the audit process is done. Save that little nugget until after the audit is completely finished – report accepted by all necessary parties, certification or registration completed, whatever the “finish line” is for the particular audit standard. Then call the auditor and say, “Hey – I like how you think. Would you be interested in helping us with X?” That way no one can question that the outcome of the audit was dependent upon hiring the auditor later as a consultant.

3. Be careful about the types of questions you ask your auditor. Asking “How do you interpret that standard and what guidance materials are available to support your interpretation?” might give you some insight as to what the auditor is looking for if you aren’t sure how to address a finding. It might also reveal the auditor has gone off on their own tangent and isn’t sticking to the audit standard and that’s another issue altogether. But don’t ask, “How would you fix that?” Then your auditor feels like a jerk because they can’t “help.”

How do you ensure a happy audit for your organization?

Click here to read more on how to have a happy audit.

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Compliance: A New Year’s Resolution

I know you are likely in the flurry of holiday festivities but let’s take a moment to look ahead to 2014. Over 40% of Americans make New Year’s resolutions – to lose weight, keep to a budget, spend more time with family, whatever it is. Do you make New Year’s resolutions for your company? You probably do, but you likely call them “goals”, “metrics”, or “performance indicators”.

I have a suggestion for one of your 2014 company goals: verify the regulatory compliance of your organization.

An individual seeking a Part 135 air carrier certificate must complete a letter or statement of compliance to prove their compliance to the FAA. The statement of compliance is essentially a table that lists each regulation applicable to the air carrier and also the manual or document location in which the operator demonstrates compliance. Many companies believe this statement of compliance is a one-time deal – once the air carrier obtains certification, the company never needs to look at the statement of compliance again. However, the FAA has indicated the letter of compliance should be a “living document” which should be updated when the operator makes changes to manuals and other documents. (And even if the FAA doesn’t require a new statement of compliance with every manual revision, wouldn’t it be great to say, “Here’s my new manual revision, Mr./Ms. POI. You’ll see the revisions are compliant with the regulations by referring to the handy dandy statement of compliance I’ve provided.” Then smile and offer the inspector a cookie. More on cookies in a future post.)

Many operators think their annual audit by XYZ Auditing Firm or their IS-BAO registration ensures their Part 135 regulatory compliance. That is a false and potentially costly assumption. The Air Charter Safety Foundation Industry Audit Standard is the most complete compliance audit currently available but for various reasons, only a handful of operators have completed that audit. Don’t assume you are compliant with Federal Aviation Regulations just because you have a fancy audit certificate in your lobby. Also don’t assume you are compliant just because your FAA-assigned inspectors have approved or accepted your manuals. (See the “My Inspector Said” post.)

I often see companies in business for many years that are on revision 30 or higher for operations and maintenance manuals but seldom have they updated their statement of compliance since certification. It’s not difficult for manuals to fall out of compliance. Occasionally companies that have experienced significant management or ownership changes or have had numerous manual revisions inadvertently drop manual language that is required by regulation. Federal Aviation Regulations change frequently and it can be difficult for operators to keep up. Many operators forget to make appropriate changes to Department of Transportation (DOT) regulations (hazardous materials, anyone?) and National Transportation Safety Board (NTSB) regulations. (Go look at your operations manual or whatever document outlines the NTSB accident reporting requirements. If the revision date of that section is older than June 22, 2010, your manual is out of date and you risk failing to submit a required report if you use your manual as a reference. Forgot about that one? You’re in good company. Most operators do. Don’t get me started on hazmat. The DOT seems to change 10 words every few years. Identifying those 10 words and revising your manual and training program is kind of like a riddle – but a riddle that could cost you big bucks if you mess up.)

Your New Year’s resolution for 2014 should be to assess your manuals and documents by completing a new statement of compliance. Then identify any omissions or inconsistencies and make appropriate corrections to ensure your company is in compliance. It is best for YOU to identify these gaps before another party (*cough cough* the FAA) does.

“But Lindsey, why do I need to be concerned about regulatory compliance if the FAA has approved or accepted my manuals?” I refer you once again to the “My Inspector Said” post, not to mention the fact inspectors are human too and mistakes happen. Plus there are some situations that prompt “special” FAA surveillance. The sale of a company that holds a Part 135 air carrier certificate, significant management or business model changes, financial hardship/bankruptcy of an air carrier, and a number of other scenarios can trigger in-depth FAA inspections, including detailed manual reviews. Certainly a significant accident can prompt an investigation of your compliance by the FAA, NTSB, and even plaintiffs’ attorneys. Aside from the desire to keep the FAA happily at bay, you should consider completing a new statement of compliance or revising your current statement of compliance if you’ve been in operation for a long period of time (say 10 or more years) or you are considering selling your company.

Are you sure your company is in compliance with all applicable FAA, DOT, and NTSB regulations? Pretty sure? Maybe? Have I mentioned OSHA compliance? Now there’s the holiday spirit!

Give me a call (703-445-2450) or send me an email if you have compliance questions or want to start off the new year with a clean statement of compliance. Then if you don’t lose weight, stick to your budget, or spend more time with the kids in 2014, at least one resolution was successful!

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Smart Supplemental Lift

Every Part 135 operator is a charter broker at some point. A crewmember gets sick, an airplane breaks, or demand simply exceeds your fleet capabilities and you’re out looking for another charter operator to pick up a flight for you. How do you choose your supplemental lift providers? Do you have a vetting process in place or will any operator with a 135 certificate on the wall do in a pinch? Developing and consistently using a documented vetting process can help limit your liability when sending a customer to another air carrier.

To develop an evaluation process, start with the simplest aspects of Part 135 operations.

Is the air carrier legal? That is, do they have a valid Part 135 certificate to conduct the specific type of operation? Many charter operators stop there. Obviously the FAA wouldn’t certificate a company that isn’t really competent to run a Part 135 operation. Right? Well… I’ll let you ponder that one. But just remember – a Part 135 certificate is merely a passing grade. It’s a pretty low bar compared to where the industry really is in terms of safety, security, and efficiency. Do you want your customers flying with the operator who only got a “D” in Part 135 operations? A “D” is a passing grade and personally I don’t want the “D” pilot, the “D” charter operator, or the “D” brain surgeon. Achieving a passing grade really isn’t saying much.

Most operators go beyond the Part 135 certificate and require proof of certain insurance limits. While it’s certainly prudent to verify insurance coverage, that’s like putting on your seatbelt after the car has struck a tree. It’s far better to exercise due diligence and mitigate risk prior to starting the car.

Some charter operators very proudly only use companies with an ARG/US or Wyvern rating or a successful IS-BAO or Air Charter Safety Foundation registration. These ratings and registrations only have value if you know what they mean. What does it take for an operator to earn a particular rating? Is there an on-site safety and operations audit or does the operator just submit data about their fleet and pilots? If an audit is required, what standards must the operator meet in order to be registered? Do findings or concerns have to be addressed before being registered or rated?  All “XYZ Rated!” logos are not equal. I’m not saying one audit or rating is superior to another. They all have some value in our industry. The individual rating or registration’s value depends on your needs and your expectations for your customers but if you don’t know what’s behind the rating, it’s meaningless.

Even an operator’s audit status shouldn’t be a single decision point for choosing supplemental lift. Audits are basically the gym membership of aviation. There are people who buy a gym membership and go work out regularly. Others get the membership and kick themselves every time the monthly fee shows up on their credit card statement because they don’t even remember how to get to the gym. And still other people are very fit and healthy but choose not to have a gym membership.  The operators who work out at the gym regularly not only put themselves out to be evaluated by third party auditors but also strive to keep the audit standards and intent alive and well in between audits. Those who buy memberships and never go back are the operators who pretty up their manuals and bring in donuts for a two or three day audit but if you go back next week, no one knows where the new manuals ended up and the donuts are moldy. (That is purely for illustration purposes, of course. I know no charter operator would do such a thing…) And there are certainly operators who choose not to have a third party evaluation but are still safe, conscientious operators.

This post isn’t intended to tell you how to evaluate charter operators used for supplemental lift. The intent is to get all of us thinking about how and why we choose companies to work with. I get a little knot in my stomach every time an operator says they use any XYZ-rated operator for supplemental lift with no further evaluation beyond verification of the pretty logo. Aside from the personal guilt most of us would feel if we sent a customer to another operator and that flight was involved in an accident, you can limit your legal liability by exercising due diligence prior to choosing supplemental lift providers. You owe it to your employees to protect the company from unnecessary legal risk. You owe it to your customers to put them with carefully chosen air carriers.

I encourage you to develop a detailed, documented process for evaluating your supplemental lift providers and use it for each and every trip you have to send to another air carrier. If you already have a process, give it a good hard look. Is it still valuable? Is it enough? Once you have a reasonable process in place, use it consistently and conscientiously. Be smart about supplemental lift.

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Checking Your Check Airman

I hope I’m not about to ruin your post-holiday weekend euphoria and the short work week ahead, but September provides one last opportunity for Part 135 operators to avoid a major FAA compliance pitfall. Back in February the FAA published a policy notice that impacts any Part 135 operator that uses contract instructors and/or check airman.

As you might recall, a contract instructor or contract check airman providing services for a Part 135 operator must have completed at least one Part 135 air carrier’s initial training and qualification curriculum as a flight crew member. In February, the FAA required all Part 135 operators that use contract check instructors or check airman to conduct a records review of each individual used in these capacities.

Let’s be clear about the requirement: If you are a Part 135 air carrier and you use contract instructors and/or contract check airman, YOU must review each contract instructor and check airman’s training records to ensure they have received initial training from at least one Part 135 air carrier. The deadline was extended to September 30, 2013, to give air carriers a fair shot at complying with the requirement, but depending on how many contract instructors and contract check airman you use, this is still a heavy lift.

The FAA doesn’t seem to be fooling around on this one. There are a few nuances in the policy notice that sound rather ominous:

1. Notarized affidavit: If you are unable to obtain records for any reason, both the contract instructor/check airman and the requesting air carrier (you) must sign and have notarized an affidavit attesting to your attempt to obtain records. There’s no “Scout’s honor” clause – the FAA wants a notarized affidavit.

2. Return LOAs: If you are unable to confirm an instructor or check airman’s training before September 30, 2013, that instructor or check airman will be considered unqualified to provide your training or checking. You will be required to return that individual’s Letter of Authorization (LOA) to the FAA.

3. “Appropriate action”: “If, after [September 30, 2013], the POI finds that the air carrier or program manager has utilized unqualified contract instructors or contract check airman, the POI must take appropriate action.” Here the policy notice is referring to the POI rescinding the individual’s LOA, but there could be more significant “appropriate action”. Any training received from an instructor or check airman who is not technically qualified could be deemed noncompliant. Every Part 135 flight conducted by a pilot who was trained or checked by an unqualified instructor or check airman could be considered a regulatory violation. (I know this is a worst-case scenario, but I just can’t shake the feeling that some people in the FAA are looking to set an example to prove the agency is serious about these training issues.)

4. False statements: The FAA also used this policy notice as an opportunity to remind contract instructors and contract check airmen that providing fraudulent or false statements to the FAA could result in a fine, imprisonment, and/or certificate action. (Does the agency anticipate the industry will lie about this? To my knowledge, this isn’t standard policy notice and I twitched a bit when I got to this section. It’s not often the agency so deliberately calls out a “reminder” like this.)

Have you reviewed your contract instructor and contract check airman records?

Please don’t believe that the Part 142 training centers have everything wrapped up with a pretty bow for you and all you need to do is log on to their web portal on September 29 to check it out. The training centers might be right on the ball on this issue but it’s not their responsibility – it’s yours, the Part 135 certificate holder’s. And if there is an error or oversight with a contract instructor or contract check airman your organization uses, the liability is yours.

If you haven’t started reviewing your contract instructor and check airman records, DON’T DELAY. September 30 will be here before you know it.

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“My Inspector Said…”

If there is one phrase I would ban from the Part 135 lexicon, it would be “My inspector said it was okay.” I have (hypothetically) seen Part 135 operators conducting all sorts of activities ranging from “in the grey area” to “clearly non-compliant” and if I had a quarter for every time an operator says, “My inspector said it was okay”, I’d be rich.

First, a quick caveat: This post is not meant to be a slam against the FAA or the individuals who represent the agency. There are some really intelligent, well-meaning people working at the FAA. This post is meant to serve as a wake-up call to operators about the ramifications an operator could face because of misunderstandings and inconsistencies within the agency and the ignorance (no offense – requirements change so frequently it can be hard to keep up) of the operator. Unfortunately the agency seems to be allowed misunderstandings and inconsistencies while the operator is not permitted to be ignorant.

Second caveat: There are big legal words and concepts ahead; however, I am still not an attorney.

Here’s how the conversation goes with the operator who says, “My inspector said it was okay.”

“Just because your inspector says you can do it [whatever ‘it’ is – log duty time a certain way, skip certain training requirements, use creative solutions for augmented crews, whatever] doesn’t mean it’s okay. You can even have your inspector’s signature approving or accepting an activity or an entire manual and if a different department, FSDO, or even individual within the FAA thinks your activities aren’t compliant with regulations, you could find yourself in a bit of a pickle.”

Usually at this point in the discussion the operator is looking at me like I’m Chicken Little. “The sky is falling! The sky is falling!”

Here are a couple of precedents that should give you a clear understanding of how the FAA feels about inspector “misunderstandings” or errors by any other name.

Relevant Precedents

One operator was recently the subject of FAA enforcement action. (The operator’s wounds are probably still fresh so I’m not listing the name here. Enforcement actions are public information and Google is your friend if you’re that interested. Some of these things could happen to any one of us. And yes, if you are the subject of this type of action and I blog about it shortly after your enforcement, I’ll withhold your name too. You’re welcome.) An FAA certificate holder who is the subject of an order of suspension, revocation, or a civil penalty may appeal the FAA’s decision to an administrative law judge (ALJ) of the National Transportation Safety Board (NTSB). This operator used this mechanism to appeal the FAA’s motion for civil penalty. The operator’s main defense was their POI was aware of the activity in question and even approved it. The ALJ took a dim view of the operator’s argument that their POI had approved their activities. The ALJ based his decision on a legal concept known as “estoppel”. “Estoppel” is defined as: “A bar preventing one from making an allegation or a denial that contradicts what one has previously stated as the truth.” For purposes of this discussion, estoppel would prevent the FAA from alleging a certificate holder violated regulations while conducting activities the certificate holder believed were acceptable based on statements made by an FAA representative. Estoppel can be thought of as a “good faith” concept – an operator can reasonably rely on an inspector’s word. Unfortunately it’s not that simple.

Essentially, existing precedents hold the only way an inspector’s approval of a certificate holder’s activities could alleviate the certificate holder of legal liability to comply with regulations is if the inspector deliberately lied. The ALJ upheld these precedents, dismissing the operator’s defense that the operator shouldn’t face enforcement because the POI had approved the activities in question. The NTSB has also consistently held this position on estoppel.

Darby Aviation

Darby Aviation was the subject of FAA enforcement action following the Challenger accident at Teterboro Airport in 2005. In this case, Darby Aviation was issued an emergency order of suspension of their air carrier certificate. The FAA claimed, “Darby Aviation has failed to produce an acceptable Operations Manual or an approvable training program despite repeated FAA efforts to inform the company of the required changes in those documents. As a result, the company has no accepted Operations Manual or approved training program.”

Darby’s main defense was its positive relationship with its POI and FSDO staff, as well as written acceptance or approval of company manuals, policies, and procedures. Darby published a written statement in rebuttal:

“This suspension action revolves around a manual that the FAA has claimed is insufficient, however it is the same manual that has been approved since 1992 and incorporates all changes required and approved by six (6) prior FAA inspectors. In fact, the present Front Line Manager of the Alabama, North Florida Flight Standards District Office (the ‘Birmingham FSDO’) and Darby Aviation’s present FAA Principal Operations Inspector (‘POI’) each approved this manual before wrongfully revoking the same document.”

Darby won an appeal to an ALJ but the FAA immediately appealed to the full Board of the NTSB. The Board upheld the FAA’s emergency order of suspension. Of particular interest to this discussion is the following:

“The Birmingham FSDO’s knowledge and approval of the charter management agreement does not preclude the Administrator from taking a different position. In a large organization such as the FAA there will inevitably be differing views. We disagree with Darby’s assertion that the Birmingham FSDO’s view should prevail in this case. The Administrator can, and indeed should, overrule a FSDO’s position if she believes it is incorrect or may be inconsistent with safety.”
Unfortunately for Darby, the Department of Transportation also issued violations against the air carrier, finding Darby in violation of a prohibition from engaging in unfair and deceptive practices. An excerpt from the DOT Consent Order makes that agency’s position very clear:

“In mitigation, Darby has assured the Enforcement Office that it has always enjoyed an excellent reputation for regulatory compliance, particularly in reference to the Birmingham FAA Flight Standards District Office (FSDO), which monitored Darby’s day-to-day activities. Darby asserts that it did not enter into its initial arrangement with Platinum with the intent of facilitating unlawful conduct on the part of Platinum and it states that the addition of the Platinum aircraft to its operations specifications was approved by its FSDO. Furthermore, Darby states that, based on contacts with its FSDO, it believed that it had taken the necessary and reasonable steps to ensure that Platinum would not be considered to be engaged in unauthorized operations.”
The DOT was not persuaded by this argument and found Darby had engaged in unfair and deceptive practices and an unfair method of competition. The company was ordered to cease and desist from further similar violations and to pay a compromise civil penalty of $60,000.

Unrelated to Darby Aviation’s many legal concerns, the NTSB found four contributing factors to the accident. Two of the four involved the FAA, including: “the failure of the Birmingham, Alabama, FAA Flight Standards District Office to provide adequate surveillance and oversight of operations conducted under Darby’s Part 135 certificate; and … the FAA’s tacit approval of arrangements such as that between Darby and PJM [Platinum Jet Management].”

The NTSB’s findings regarding the accident had no mitigation value for Darby Aviation in its interactions with the FAA or the DOT. In fact, two Board Members who reversed the ALJ’s decision and affirmed the FAA Administrator’s emergency order of suspension, then Acting Chairman Rosenker and Member Hersman, were still on the Board when these contributing factors were adopted as part of the accident final report. In other words, two of the same individuals who agreed the FAA had reason to issue an emergency order of suspension later found the FAA’s activities to be a factor to the Teterboro accident. However, the concept of “estoppel” and the government’s consistent view that safety cannot be compromised because of an inspector or office’s misunderstanding or inconsistency with Federal Aviation Requirements, FAA guidance, and so on, mean the FAA can be a contributing factor to an accident but not accountable for the operator’s regulatory noncompliance.

The “my inspector approved it” argument does not seem to hold water with the FAA, DOT, NTSB ALJs, or the NTSB. It’s a conundrum for operators and inspectors alike. An inspector’s judgment can be questioned by the agency at any time and operators have no real reason to be 100% confident in their inspectors’ decisions. So as a Part 135 operator, what do you do?

First, make sure someone in your company who understands Federal Aviation Regulations is responsible for keeping up with possible regulatory changes. The FAA posts new guidance documents and regulations on its website. Check at them at least weekly. Watch other sources for DOT changes, like hazmat requirements or limitations.

Second, get or stay involved with a trade association like NATA or NBAA. Then your dues are paying those folks to watch for regulatory changes that could affect your company. (Keep in mind, you might be subject to a relatively obscure or uncommon requirement that the majority of a trade association’s membership are not subject to, so don’t simply rely on the trade association. It’s YOUR business. Be proactive.)

Third, if you have an auditor, consultant, or other objective third party point out a possible inconsistency with requirements, LISTEN UP! Don’t dismiss the concern with a quick, “My inspector said I could” and move on. Ask the individual for references that back up his/her position and give the references serious consideration. There’s no doubt some regulatory issues exist in a grey area. Maybe the FAA hasn’t issued clear guidance or there hasn’t been an interpretation on the issue yet. But if there is inspector guidance, a policy notice, a regulation, a legal interpretation, heck, even a quote from FAA senior management that indicates the activity in question is fishy, don’t hang your hat on your inspector’s (or FSDO’s) opinion. Do your own research.

The bottom line: The FAA can and has violated air carriers for activities approved by FAA inspectors. Trust but verify.

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Basic Training for 135 Employees

How much training do you provide for your employees? Every Part 135 charter operator, depending on its operations, is required by regulation to provide pilots with company- and aircraft-specific ground training, simulator or aircraft flight training, emergency training, hazmat training, international training, security training… The list of training requirements for pilots is seemingly endless but training needs for non-pilots aren’t specifically addressed in the regulations.

Industry best practices now encourage Part 135 operators to provide all employees with training related to the operator’s safety program, emergency response procedures, and job-specific training. I think that’s a great start – but it’s not enough.

What industry did your accounting employees come from? Do you think they have any idea what “Part 135” means? Let’s look at a few different positions that could benefit from a general understanding of Part 135 regulations, the company’s responsibilities to the FAA, and the potential ramifications of inadvertent or intentional violations. When the FAA was at the height of the operational control and A008 hysteria, it wasn’t uncommon for inspectors to interview non-flight related staff, like sales personnel or accounting staff, and in some cases, these helpful but untrained individuals created problems for the air carrier.

Flight Coordinator/Controller/Scheduler: A charter operator hires a flight coordinator from the local flight school, where the individual was scheduling instructors, students, and aircraft. The flight coordinator, being the new kid, draws the short straw for night and weekend on-call duties and receives a late Saturday night phone call from an FBO where a company airplane is overnighting. The FBO – which is also a repair station – happened to notice the airplane has a flat tire and wants to know if they should fix it so the airplane is ready for the next day. Newbie flight coordinator, thinking he/she is being proactive and helpful, tells the FBO to go ahead and fix the tire. Why? Because the flight coordinator has never received training on the importance of ALL maintenance on a Part 135 aircraft being conducted under the air carrier’s maintenance program. He/she didn’t know how critical it is to coordinate maintenance functions with the Director of Maintenance or a designee, regardless of the seemingly minor nature of the repair or time of day.

Sales Staff: How many times has your sales staff sold a trip into an airport with a runway too short for the intended airplane? This is particularly confusing to untrained staff if that airplane goes into that airport frequently under Part 91. Has your sales staff failed to advise a client of restrictions on firearms? Or sold a trip that will exceed a crew’s duty period? A clear introduction to Part 135 requirements and comparison with Part 91 rules can help sales staff understand the limitations of Part 135 – and help you to avoid frustrating or losing a client!

Accounting Staff: Some people question the need for an individual responsible for accounts receivable to know what “Part 135” or “operational control” means. While it’s not necessary for the individual to have a PhD in all Part 135 issues, it sure helps to have a general understanding of why Aircraft Owner A flies everything Part 135 and must be billed federal excise taxes but Aircraft Owner B flies all fights under Part 91 and doesn’t pay FET.

Reception and Line Staff: Certainly these individuals don’t need lengthy and detailed training in Part 135 requirements, but some basic training can be helpful to understanding their responsibilities within the company. Most importantly, a general understanding of Part 135 requirements and the FAA’s authority over the company can help a receptionist or line personnel to properly answer, “Hi! I’m Inspector Gadget from the FAA and I’m here to help!” (Of course the correct answer is a very courteous, “Hello! Let me introduce you to our [Director of Operations / Chief Pilot / Director of Maintenance / Agent for Service].”) But first your receptionist or line personnel must know WHO those individuals are (does your line staff know who your company’s Agent for Service is?) and must know that seemingly friendly chats with federal inspectors can lead to trouble for the company if the company representative “guesses” or misspeaks.

Director of Operations / Chief Pilot / Director of Maintenance: Part 119 lays out the requirements and qualifications for these management personnel, but the regulations allow for experience in Part 121 or 135. If you hire a furloughed airline pilot to serve as your chief pilot, are you sure he/she understands the intricacies of Part 135? Your new chief pilot might be very experienced and highly intelligent, but think about it – most 121 pilots forget how to get weather reports or NOTAMs because “dispatch does that”. Don’t you want these folks – ESPECIALLY these folks – to understand how Part 135 differs from other regulatory structures?

I recently developed a training module for a client who realized a basic introduction to Part 135 regulations is a helpful addition to their existing training. This training is required of ALL employees, not just pilots or flight controllers or maintenance personnel.  The training is customized it to include their company-specific policies and procedures and I have delivered the training in person to a number of their employees. The client will soon have a trained individual to conduct future sessions in-house. Do you provide your employees with enough basic training to fully understand their roles and responsibilities within the company? Consider adding a “Basic 135” training module to your curriculum. Training doesn’t have to be complicated, lengthy, or expensive, and a properly trained staff can save you considerably – in time, money, and headaches!

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How to Have a Happy Audit

Over the past several weeks, I’ve presented several concerns frequently uncovered during third party audits of Part 135 operators, including ineffective internal evaluation programs; flight and duty issues for flight managers; errors in pilot training records; questionable use of “safety pilots”; and more. Here are some other tips for ensuring a happy audit:

1. Know Your Objective

What do you want to get out of this audit? If we’re all honest with each other, we know different audits have different meanings within your company. Is this a marketing move so you have a logo on your website? Does a particular client require the audit? Are you looking for an critical review of your safety program or operations? Do you want to improve operational processes?

None of these objectives are necessarily “wrong” or “bad”, although I don’t recommend telling the auditor you need a logo on your website so make it snappy. Most auditors will figure out your objective on the first day anyway. (True story: I once had four people ask me on the first day of an audit if we could finish the audit a day early. The main contact on that audit darkened the door of the conference room every afternoon promptly at 4:58, asking if the maintenance auditor and I were finished for the day. The operator’s staff wanted to leave at 5 whether we were finished for the day or not.) Your objective shouldn’t change the quality or content of your audit but it should help you gauge the resources you want to put towards the audit and any subsequent findings.

2. Be Prepared

You get the best quality audit if you are prepared. Complete the pre-audit checklist if the audit standard organization provides one. If a pre-audit checklist isn’t provided, complete the actual audit checklist to see where you stand. Close any gaps you identify before the auditor arrives. Send the auditors the checklist and relevant manuals at least a couple of weeks in advance, if it’s part of the standard protocol for this type of audit. It’s important for them to be prepared for the audit too.

Double check the revision status of your documents. Make sure you send the auditors current versions of documents. I’ve arrived to an audit before with an electronic rev 8 of the SMS and been given a hard copy rev 8 of the SMS. The documents didn’t match, even though they were both rev 8. Double check your revision numbers to make sure everyone is on the same page – literally.

3. Be Available

Be sure appropriate individuals (the Accountable Executive, Director of Operations, Director of Maintenance, Chief Pilot, and director of safety if you have one) are scheduled to be in the office for at least part of the audit. This is not a good time for the Accountable Executive to go on vacation or the DO to go to school for a week. If any critical personnel have scheduling conflicts, tell the auditors and determine an interview schedule. I know you fly airplanes for a living – not complete audits for a living – though it might seem that way sometimes – so I understand if the chief pilot or DO has to go fly. I can’t give you a complete audit if those individuals are unavailable for the entire period though. Make sure you are accessible to auditors for at least part of the audit.

This sounds obvious but provide appropriate resources for the auditors. Twice now I have conducted audits in lobbies. That is a really uncomfortable situation for both the auditors and the operator. To conduct a good systems audit, the mx and ops auditor have to be able to communicate and sometimes we’ll say things you don’t want your customers or even staff to hear. You might not even be doing anything wrong – we might just be sorting things out between the auditors – but it can be awkward.

4. Responding to Findings

Each audit standard has different requirements for timelines and expectations for corrective actions, so I won’t go into this in detail. Ask your auditor if the expectations are unclear. Be sure to keep track of the time remaining to submit corrective action plans or completed actions. Many audit standards require a process or procedure to meet a particular standard, not just a policy statement. Make sure the staff closing the audit findings know how to write a process or procedure and don’t just submit a policy statement and hope the auditor will accept it.

5. Solving Conflicts

We’re all human. Sometimes you and your auditor will disagree. This happens on maybe 1 out of 10 audits I conduct. In most cases, the operator and I reach a common understanding and the issue is resolved. In one case, I had to bring in the audit standard organization to mediate the issue. Remember the auditor is obligated to the audit standard organization – be it IBAC, ACSF, whoever – to uphold their standard. You might not like a particular requirement and that’s okay. You don’t have to like it. But if you want to play in their sandbox, you have to play by their rules.

Let’s say a standard is impossible for your particular operation to comply with, it is totally inconsistent with your operations model, or you just don’t like it. Keep in mind all of these standards exist because someone lobbied for the item to be included. If you disagree with a standard, I recommend one of the following actions: lobby the audit standard organization for an exemption; lobby the audit standard organization to change the standard itself (this is often a long process as most of the customer advisory boards or review boards only meet once a year); or convince the auditor you do something else that meets or exceeds the INTENT of the standard.

Final Thoughts

Keep an open mind. Sure some auditors like to hangar fly and drink coffee but many of them have good experience and insight and just want to help operators be safer and more efficient. Most of us would rather be there advising you than playing auditor cop but we do have a responsibility to uphold the audit standard and most audit standard organizations have strict rules against consulting while on the audit.

Know a good audit when you see. Did you have no findings? Not a one? Don’t go celebrate. You just wasted your time and money. Okay, if you’re a 135 operator and this is your 3rd round at IS-BAO or whichever audit, maybe you don’t have any actual findings. But different auditors should have different perspectives and might see something another auditor didn’t. If you don’t have any actual findings, were you at least provided with some suggestions for improvement?

Know the difference between a required standard and an auditor’s opinion. Sometimes I’ll offer a suggestion aside from the actual audit. You’re not required to do anything with that. I just saw something that might help you be safer or more efficient. You can take it or leave it. But if an auditor writes up a finding that you feel is not substantiated by the standard itself, question the auditor. If that doesn’t work, go to the audit standard organization. The auditor is there to verify compliance with the standard, not enforce their own opinion.

And finally, don’t assume because you just passed an FAA inspection that you will sail through an audit.  First, back to the “we’re all human” idea. Your inspectors might have missed something. On the other hand, your inspector might be allowing activity that isn’t really permitted. And guess who gets to pay if another inspector decides you aren’t in compliance? You do. Also, most third party audit standards are meant to enforce best practices, not just regulatory compliance.

Contact me at Lindsey@mcfarrenaviation.com or by phone at 703-445-2450 if you need assistance preparing for your next audit or closing audit findings!

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