Inspections, Compliance, Enforcement, and Criminal Investigations
State Contracts-Evaluation of Inspectional Performance
State Contracts-Evaluation of Inspectional Performance
State Program Management
|Date Revised: |
December, 6 1990
This Field Management Directive (FMD) provides the procedures for auditing inspections conducted by State agencies under contract with FDA (contract inspections) to ensure adequate State contract inspectional performance.
TABLE OF CONTENTS
Explains the scope of this FMD.
Chronicles the revisions of this FMD.
- CONTRACT INSPECTION AUDIT PROGRAM
Describes the program and its implementation.
- Types of Audits
- Rates of Audits
- Auditor Qualifications
- Reporting Audit Findings
- Correcting Performance Deficiencies
- Dispute Resolution
STATE IMPLEMENTATION OF THE AUDIT PROGRAM: Phases II and III
Describes the process for States to implement the food contract audit program.
- MATERIAL SUPERSEDED
Appendix A Instructions for Evaluating Contract Inspections
Appendix B Contract Audit Form (FDA Form 3610
Appendix B.1 Guidance for Completing the Contract Audit Form
Appendix B.2 Data Reporting Instructions for Food Contract Audits
Appendix C BSE/Feed Establishment Audit Form
Appendix C.1 Guidance for Completing the BSE/Feed Establishment Audit Form
Appendix C.2 Data Reporting Instructions for CVM Contract Audits
Appendix D Guidance for Conducting Joint Audit Inspections and Joint Inspections
Appendix E Summary of Contract Audit Findings: Food Inspection
Worksheet E Calculation of the performance rating for food contract audits
Appendix F Summary of Contract Audit Findings: Feed Establishments
Worksheet F Calculation of the performance rating for feed establishments
Appendix G Audit Report (Form FDA 3611)
Appendix H Model Standard Agreement
Appendix I Contract Inspection Audit Program Evaluation Form
The purpose of this revision is to define: (1) procedures for conducting audits of contract inspections, (2) the required frequency of audits, (3) auditor training requirements, and (4) the records required to document the audits. Specific audit procedures and forms, data reporting instructions, and summary report forms of audit findings are included as appendices. This FMD does not modify the procedures for conducting joint audit inspections and joint inspections for contract monitoring and enforcement purposes.
The revision addresses the oversight of contract inspections in the following program areas:
- Feed establishment (includes GMP and BSE only inspections)
- Tissue residue, medical device, and other inspection programs
This FMD does not address the training requirements and procedures for oversight of states performing inspections of mammography facilities certified by FDA under the Mammography Quality Standards Act of 1992 (MQSA). Those requirements are contained in the MQSA contractual agreements with the States and the FMD No. 144.
This FMD does not contain procedures for reviewing the quality of state documents. Districts are encouraged to conduct a quality assurance review of state documents as part of their quality assurance program.
This FMD does not contain specific guidance for selecting the contract inspections and state inspectors to be audited. It is recommended that the District and the State agency managers develop an audit schedule when assigning the firms to be inspected under contract. Firm selection should be based on the inspection priorities listed in the “Statement of Work” section of the contract.
The original FMD established procedures for joint inspections and independent audit inspections for the food, medicated feed (currently feed establishments), and interstate travel programs. In 1977, a revision expanded the audits, maintained the requirement for joint inspections, and added references to the diagnostic x-ray program. In 1982, a revision combined the general procedures for all current programs into the base document. The FMD was last revised on January 22, 1999. It contained provisions for audits of the food sanitation and medicated feed inspection programs, and the procedures for auditing states performing inspections of mammography facilities certified by FDA under the Mammography Quality Standards Act of 1992 (MQSA) were added.
In June 2000, the Department of Health and Human Services, Office of Inspector General (OIG) published the results of its evaluation of FDA’s oversight of food firm inspections conducted by states through contracts. The report recommended that FDA take steps to address shortcomings in its system of oversight. This FMD is revised to incorporate the OIG’s recommendations and to improve the oversight of food, feed establishment, and other inspections done under contract by the states.
FDA must periodically audit contract inspections to ensure the quality of inspections purchased through contracts with States is adequate and complies with contract requirements. The Contract Inspection Audit Program (hereafter known as the Audit Program) requires that Districts transition from their current system of contract oversight to a more standardized system of formal audits by qualified District and State auditors at a minimum frequency or audit rate. Implementation of the Audit Program is described here.
During Phase I, the District conducts the minimum number of contract audits based on the audit rate specified in this FMD. Full implementation of the Audit Program, when the State agency assumes the responsibility of auditing their food contract inspections, begins in Phase II and is completed in Phase III.
Phases II and III apply to the food contracts only.
Section IV of this FMD provides guidance on developing a plan for transitioning to Phases II and III.
During Phase II, the minimum required audit rate is achieved through a combination of audits conducted by the District and the State agency. The District is required to train and verify the performance of the State inspectors assigned to audit contract inspections conducted by State inspectors.
During Phase III, the State agency assumes the responsibility for conducting audits at the rate specified in this FMD. The District or State agency auditors shall train and verify the performance of a State inspector assigned to audit contract inspections conducted by State inspectors. The State agency submits the audit reports to the District for review. The District will conduct audits of State agency’s audit program.
Independent audits, which were used to determine if the inspection findings of the FDA and the State agency agree, are no longer an oversight option. Contract audits, joint audit inspections, and joint inspections should be used in place of independent audits.
The types of audits relevant to the oversight of contract inspections are defined here.
- Contract audit is an evaluation of a contract inspection in which a trained auditor accompanies a State inspector to document the inspector’s performance. FDA investigators or State inspectors are qualified to conduct a contract audit after all the requirements for the specific inspection program listed in Part C of this section have been successfully completed.
- Training audit is an audit in which a State auditor trainee accompanies the lead auditor and the State inspector during a contract inspection. Its purpose is to teach the State auditor trainee how to conduct an audit by observing an audit of a State inspector. The State auditor trainee must also meet the auditor qualifications listed in this FMD and the related contract.
- Verification audit is an audit conducted by a State auditor during which a qualified FDA or State auditor is present to verify the ability of the State auditor to audit the inspection performance of a State inspector. Appendix D provides guidelines that will help the FDA auditor document the State auditor trainee’s performance during a verification audit.
- Joint audit inspection is an audit done by an FDA investigator accompanying a State inspector and observing his/her performance. A joint audit inspection is used to assess the quality of contract inspections for tissue residue, medical device, and other industries that are not covered by an official audit course. Appendix D provides guidelines for conducting and reporting joint audit inspections.
- Joint inspection is an inspection conducted jointly by District and State personnel for the purposes of training or enforcement. Joint inspections may be counted against the required number of audits when used to train State inspectors. Training may be necessary when a new contract is negotiated, new industries are added to an existing contract, or remedial training is needed. If authorized in the contract, the state agency may count the joint inspection as a contract inspection. Appendix D provides additional guidelines for conducting and reporting joint inspections.
Rates of Audits
A minimum number of contract inspections must be audited each contract year to verify that the state conducts suitable inspections that satisfy the requirements contained in a contract.
The results of all audits should be reported even when more than the required number of contract inspections is audited. In split-district states, the required number of audits should be prorated based on the number for firms covered by the state in each District’s territory.
At the District’s discretion, joint inspections conducted for the purpose of training a State inspector, may be counted toward satisfying the required minimum number of audits.
Table 1 shows the minimum rate of audits by inspection program to be accomplished each contract year. In rare instances, the audit rates may be adjusted. The District, however, must submit a written request that includes a detailed justification to DFSR for approval.
Table 1. Audit rate for contract inspection programs
Minimum audit rate
7 percent of contract inspections
5 percent of contract inspections
Tissue residue, medical device, and other inspection programs
One joint audit inspection of each inspection program
Evaluation of State inspector’s performance
All State inspectors must successfully pass the audit requirements with an overall acceptable rating. State inspectors who receive an overall score of “needs improvement” shall receive remedial training in deficient areas or as agreed upon by the District and State agency managers. Remedial training shall be documented by the State agency.
During Phases I and II of the Audit Program, each State inspector conducting contract inspections must have at least one of their inspections audited by a qualified FDA auditor every 36 months.
During Phase III of the Audit Program, each State inspector conducting contract inspections must have at least one of their inspections audited by a qualified state auditor every 24 months.
Contract audits are to be conducted only by auditors who have completed the required training courses relevant to the inspection programs listed in this section and any additional training courses listed in the related contract. And, the auditors must have experience in conducting inspections in the specific program and should have an understanding of the relevant compliance program and regulations. A State auditor must also complete a training audit and verification audit specific to the type of contract inspection prior to independently conducting a contract audit.
Food Contract Audit Training Requirements
- FDA Food Contract Audit Course
Contract inspections that require a State inspector to complete specific training courses shall be audited by auditors who have completed the same course requirements listed here.
Low-acid and acidified food:
Better Process Control School OR
FDA Basic LACF and Acidified Food Courses
(It is recommended that auditors also complete advanced courses in LACF and acidified food processing.)
Three-day Seafood HACCP Alliance Course
Two-day Seafood HACCP Regulator Course
Juice HACCP Alliance Course (or comparable training)
FDA Juice HACCP Regulator Training
- Feed Establishment Contract Audit Training Requirements
It is recommended that the investigators/inspectors who audit these inspections understand the applicable sections of the compliance programs, and complete the “Report of Inspection” to comply with 21CFR 589.2000.
- FDA/BSE Feed Establishment Contract Audit Course
Contract inspections that require a State inspector to complete specific training courses shall be audited by auditors who have completed the same course requirement listed here.
BSE Inspectional Approach (BSE02)
FDA web-based course
This section describes the references, rate of audit, performance documentation, and performance factors for all contract inspection programs.
References Food contract: Statement of Work Appendix A Instructions for Evaluating Contract Inspections Appendix B Contract Audit Form (FDA Form 3610) will be used to evaluate State inspector’s performance. Appendix B.1 Guidance for Completing the Contract Audit Form (FDA Form 3610) Appendix B.2 Data Reporting Instructions for Food Contract Audits (PAC 03R843) Rate of Audit 7 percent of the total number of contract inspections. Performance Documentation Appendix B Contract Audit Form (FDA Form 3610) will be used to evaluate State inspector’s performance. Performance Factors Performance factors listed in Appendix B.
- Feed establishment
References Feed establishment contract: Statement of Work Appendix A Instructions for Evaluating Contract Inspections Appendix C BSE/Feed Establishment Audit Form Appendix C.1 Guidance for Completing the BSE/Feed Establishment Audit Form Appendix C.2 Data Reporting Instructions for CVM Contract Audits (PAC 71R843) Rate of Audit 5 percent of the total number of contract inspections. Performance Documentation Appendix C BSE/Feed Establishment Audit Form will be used to evaluate State inspector’s performance. Performance Factors Performance factors listed in Appendix C.
- Tissue residue, medical device, and other inspection programs
References Refer to Relevant Contract: Statement of Work Appendix A Instructions for Evaluating Contract Inspections Appendix D Guidance for Conducting Joint Audit Inspections and Joint Inspections Rate of Audit One joint audit inspection of each inspection program every contract year. Performance Documentation The FDA investigator will prepare a memorandum to his/her supervisor to document the State inspector’s performance and any training he/she provided to the State inspector. A copy of the memorandum should be provided to the State agency. Performance Factors Performance factors listed in Appendix D.
Reporting Audit Findings
The District is responsible for providing the following documents to the DFSR, HFC-150, Room 12-07, 5600 Fishers Lane, Rockville, Maryland 20857, Attention: Beverly Kent.
For the food and feed establishment contracts:
Summaries of Contract Audit Findings (Appendices E and F) will be calculated using Worksheets E and F. The worksheets will be submitted no later than fifteen business days after the end of the contract year.
Worksheets E and F will be used: (1) to calculate an overall rating for the contract performance period and (2) to evaluate audit ratings for a single performance factor. The District, State agency, and DFSR will use the rating and evaluation to identify specific aspects of the state’s inspection program that requires improvement. An overall rating for the contract performance period that is below 80 percent indicates a need for improvement and requires corrective action.
For State implementation of the audit program (Phases II and III):
Contract Inspection Audit Evaluation Form (Appendix I) is completed by the District for the contract performance period. The evaluation form will be submitted no later than fifteen business days after the end of the contract year.
For tissue residue, medical device, and other inspection programs:
Audit Report -FDA Form 3611 (Appendix G) will be submitted no later than fifteen business days after the end of the fiscal year.
Correcting Performance Deficiencies
The District should take action when the Audit Program identifies deficiencies in the performance of contract inspections. The following conditions indicate a need for action by the District and State agency.
- An audit of a food or BSE/feed establishment contract inspection is rated “needs improvement”
- A single performance factor is rated as “needs improvement” in multiple audits
- The overall rating for the contract performance period is below 80 percent
- Performance deficiencies are found in Phase III of the State’s implementation of the audit program during a verification audit conducted by the District [applies to food contracts only]
- Performance deficiencies are found during a joint audit inspection of a tissue residue, medical device, or other inspections done under contract
An unacceptable audit will not cause a contract to be altered or unpaid nor will payment for the contract inspection be withheld. The state will be evaluated on its overall work performance during the contract year not the outcome of one contract audit. A single audit may give an indication of a problem but may not prove sufficient to determine its scope. If this occurs, it may indicate an area in the state’s inspection program that may be improved.
The District should follow these procedures to address performance deficiencies or trends identified during the audit process.
- Provide a copy of the performance document (audit form, memorandum, or year-end summaries) to the State agency.
- Telephone the State agency as soon as practical following the audit to discuss:
- Possible causes for performance deficiency,
- Possible solutions and corrections that will improve performance, and
Remedial training when a serious deficiency is reported. District and State agency managers will agree on the training needed to allow the State inspector or State auditor to resume conducting inspections or audits under contract.
NOTE: The District should provide reasonable assistance to enable improvement through training and joint inspections. The FDA project and co-project contract officers should be notified and included in discussions between the District and the State agency.
- If the same or similar performance deficiencies reoccur, request a written plan describing how the problem will be corrected from the State agency.
- Monitor the effectiveness of corrective actions. The District and State agency managers will determine if the State inspectors should discontinue conducting contract inspections until an audit is performed to determine if the State inspector’s performance is acceptable.
- The project officer will be notified immediately of deficiencies and follow-up actions by copy of any written correspondence to the State agency.
- Deficiencies not corrected in a reasonable amount of time or that affect a substantial portion of the State's contract work are considered serious. Under these circumstances non-extension, probation, or termination of the contract may be considered. When recommending such actions, the District shall prepare a written recommendation and submit it to the Director, DFSR, through the RFDD within 30 days of determining an action is necessary. The recommendation should contain the following information:
- Documentation of the problem. Attach copies of pertinent state inspection reports and FDA audit reports,
- A description of the steps taken by the State agency and the District to correct the problem,
- Copies of correspondence between the Region/District and State agency concerning the problem,
- An assessment by the District Director of the cause of the problem and the potential for satisfactory correction, and
RFDD concurred with the District’s findings and recommended action.
The Director, DFSR and the contract specialist will review the District’s proposal to determine if the recommended action is appropriate and complies with contracting procedures and requirements. The Director, DFSR will discuss the action to be taken with the District and request the Office of Acquisitions and Grant Services to send an official notification of the action to the contractor.
The District and the State agency should make every effort to resolve disputes about audit findings and overall audit ratings. If, however, the District and State agency are unable to resolve a dispute, both parties will send a written summary of the situation and a proposed resolution to the Director, DFSR. All related documents, including the FDA audit reports and state inspection reports, shall be included. The Director, DFSR will review the reports and work with the District and the State agency to arrive at a resolution. If the State agency fails to respond, the disposition of the contract may be effected.
STATE IMPLEMENTATION OF THE AUDIT PROGRAM: Phases II and III
ONLY applies to food contracts
Full implementation of the Audit Program, which is when the State agency assumes the responsibility of auditing their food contract inspections, begins in Phase II and is completed in Phase III. Phases II and III of the Audit Program are offered to the State agency as an elective under the “Statement of Work” of the food contract. If the State agency bids on this elective work, an agreement signed by the District Director and the director of the state inspection program is required. Appendix H is a model standard agreement, which is provided in the food contract when the Audit Program is offered as an elective. The signed agreement must be submitted with the State’s contract proposal. At the end of the contract performance period, Appendix I is completed by the District and submitted to DFSR (refer to Section III, Part E).
The State auditors must have an understanding of the relevant compliance program and regulations and have experience in conducting inspections in the specific program area. In addition, the State auditors must complete the training courses described in the contract. If requested by the District, the State agency will provide documentation that the State auditors have completed the prerequisite training requirements.
In general, the State agency will implement Phases II and III following the guidelines described here.
During Phase II, FDA auditors train and verify the performance of State inspectors assigned to audit contract inspections done by State inspectors. During Phase II, the District will continue to conduct audits of contract inspections, as necessary, to achieve the minimum audit rate. The training and verification audits will be counted toward the audit obligation.
One FDA auditor should train only one State auditor trainee. If more than one State auditor trainee is present, the State supervisor will notify the FDA supervisor prior to the training audit. The FDA auditor will train and audit the State supervisor, team leader, or senior inspector to conduct the audit inspection following these procedures.
- The FDA auditor will conduct a training audit. During this audit, the State auditor trainee will observe the FDA auditor auditing a State inspector. The FDA auditor will complete the FDA Form 3610. Additional observations about the audit should be recorded on the audit form not in the FDA auditor’s official diary.
- The FDA auditor will conduct a verification audit. During this audit, the FDA auditor will observe the State auditor trainee conducting a contract audit. The State auditor trainee will complete the FDA Form 3610. The original audit form must be sent to the designated District person. Appendix D provides guidelines that will help the FDA auditor document the state auditor trainee’s performance during a verification audit. A copy of the memorandum will be sent to the State agency.
Only the State inspector, not the State auditor, will report his/her time in eSAF. The number of hours will be reported as an audit not an inspection. At the time data is entered into eSAF, the State data entry user will change the Inspection Type field on the Add/Update Inspection Operation screen from "State" to "Audit". The FDA investigator will report time following the instructions in the Appendix B.2.
Phase III occurs when the State assumes the responsibility of auditing their contract inspections at the rate specified in this FMD. At that time, the State agency must have a quality assurance program that requires correcting performance deficiencies found during an inspection and that provides for remedial training and reverification of an auditor who fails to recognize: (1) deficient performance by an inspector or (2) performance that should be rated as “needs improvement.” The State agency will audit its own inspectors every 24 months considering the inspection priorities listed in the “Statement of Work” section of the food contract. The State auditors will apply the same auditing standards and procedures contained in this FMD. Remedial training is required for a State inspector that receives an overall audit rating of “needs improvement”. Training may be provided by the State agency or FDA.
If additional State auditors are needed, the District and State agency should develop a plan to accomplish the training audits and the verification audits for those State inspectors who have completed the FDA Food Contract Audit Course. The State agency may use State auditors, who have completed the training and auditing requirements described in Phase II, to conduct the training audit and the verification audit of a State auditor trainee.
Only the State inspector, not the State auditor, will report his/her time in eSAF. The number of hours will be reported as an audit not an inspection. At the time data is entered into eSAF, the State data entry user will change the Inspection Type field on the Add/Update Inspection Operation screen from "State" to "Audit".
The State agency will continue to send the original audit forms to the District. The District will send Worksheets E and F, and Appendix G to DFSR.
Every 24 months, the District will evaluate the performance of the State auditors. The FDA auditor should give priority to auditing those State auditors trained by the State agency. He/she will follow Appendix D for documenting the State auditor’s performance and any training he/she provided to the State auditor. A copy of the memorandum will be sent to the State agency. The number and outcome of these verification audits will be reported on Appendix I.
DISTRIBUTION TO STATES
Copies of the FMD should be distributed to the contracting State agencies and discussed with them. Copies of audit documents (including audit forms and year-end summaries) should be provided to the State agencies.
Questions should be directed to Beverly Kent, Federal-State Program Specialist, Division of Federal-State Relations, HFC-150 at 716/541-0331 or email to firstname.lastname@example.org
Office of Inspector General, FDA Oversight of Food Firm Inspection, OEI-01-98-00400. Department of Health Human Services, 2000: www.oig.hhs.gov/oei/reports/oei-01-98-00400.pdf
FDA form 3610 is available at http://www.fda.gov/opacom/morechoices/fdaforms/FDA-3610.pdf
DISTRIBUTION: Regional Food and Drug Directors and District Directors; FDA Headquarters Offices
ISSUED BY: ORA/ORO/Division of Federal-State Relations (HFC-150)
PUBLICATION DATE: 8/7/06