The Ultimate Guide to Conducting a Mock Compliance Audit and Pricing it Right
Safety Consultant with Sheldon Primus
The Ultimate Guide to Conducting a Mock Compliance Audit and Pricing it Right
September 18, 2023
In this podcast, we explore the art of mastering mock compliance audits and gaining valuable insights into pricing tips that can help you optimize your healthcare compliance. Sheldon shares his experience and knowledge on the subject, offering practical tips and strategies that can help you prepare for, and confidently navigate, the audit process. We delve into the importance of conducting mock audits as a proactive measure, discuss common compliance issues that may arise, and provide actionable advice on how to address them. Tune in to gain valuable insights on mastering mock compliance audits and optimizing your compliance program.
Keywords: Mock OSHA Audit, pricing, regulatory compliance, 


 

[00:00:04.940] - Sheldon 

This episode is powered by Safety FM. Welcome to the Safety Consultant Podcast. I'm your host, Sheldon Primus. It's a podcast where I teach you the business of being a safety consultant. I talk about OSHA compliance. We also talk about just general safety and health stuff in the past, I've also included stuff related to keeping yourself well, self-health stuff. I just want to thank everybody for listening to the podcast. I want to just encourage you, if you have not yet, go to safetyconsultant. Com. That's the video-on-demand service that I have that helps people who want to be consultants or you're playing the role of the consultant in your company. It's not just for consultants, even though it's a safety consultant TV. Some of you are playing the role as a consultant and you need some help. I got you. I have some templates if you do the online version, but if you just want to sit back and chill and watch something on your TV, go to your App Store or whatever, the service you're looking at, if it's Apple TV or if it's Roku or whatever, and go to safetyconsultant. Com. That's what you're going to do. 
 

[00:01:39.660] - Sheldon 

Safetyconsultant. Com. If not, just grab your phone, slip over to your App Store, look up Safety Consultant TV. That's Android and it is also an Apple and the other ones. That is how you're going to get this information. Safety Consultant TV. Use code SC-101, and it's going to give you 30 days for you to… There you go. Safety Consultant TV. Just about anything you put your hands on that's electronics that delivers any entertainment content, just type in Safety Consultant TV. Boom, you got me. All right, gang, I have right in my hot little hands, this is from the chartable list, and this is telling me where we are on everybody's radar. For Apple, the show is 37 in Saudi Arabia. Thank you. You're so awesome. Sixty-nine in Chile, 99 in UAE, and 28 in Senegal. You guys have been holding it down for me. Thank you, all of you. If I haven't said anything about your country is just not in the top 200 to Apple. They really like anything in the top 200 in my category as government. Then they drop out after that to Apple. Charitable is a little bit different. I do have a Charitable that's a service that just tracks podcasts. 
 

[00:03:21.860] - Sheldon 

With the Charitable, I'm not ranking that great. Like in the US for all podcasts, I'm 10,957. But think of all the podcasts out there now. It's been ridiculous. It's good to because honestly, there's a podcast for everybody right now, which is a good thing. Hold on, let me give you one or two that I know that I'm in the 200s. For global government reach, I'm 161 in the chartable list. In the US government reach, I am 137 in chartable. I'm going to switch over to the Becast. Becast is one that I do use, and that is the service that is providing the podcast for you. They actually do their own little version of what I just showed you. By location, and I'm doing this just by the year, here's my locations for everybody listening to me, and they listed out in order. Their order is just truly by listeners. Us, you guys by far are my greatest listeners. Bahrain, your second, France, Singapore, Italy, Finland, Thailand, Canada. Number eight, Germany, Netherlands, UK, Hungary, South Africa, island number 14, Austria, Hong Kong, Taiwan, Australia, Malaysia, Portugal, Belgium, Korea, you are 22, Kenya, Switzerland, Cambodia. Hey, that's where my daughter is right now. 
 

[00:05:14.150] - Sheldon 

Wow. That's awesome. Cambodia, you guys are 25. My daughter is a full-time traveler and she's in Cambodia. Love and life. She really loves your country, gang. All right, Chechia, Sweden, Saudi Arabia, Qatar, Israel, Denmark, India, you're 32, Rwand, China, New Zealand, UAE, 36 on this list. Uganda, Greece, Norway, Japan, Egypt, Croatia, Poland. There we go. Tanya. Awesome. Man, this is a global outreach. You guys have really been holding me down with just sharing the show with friends and making sure that people out there get to hear the good words and keeping people safe. That's the whole thing, right? We're consultants to keep people safe. We want to make sure that people are not get hurt at work. That is the goal because honestly, that is some of the things that it drove us all into this business. I just really want to just thank everybody for everything you guys truly, truly, truly rock. Here we go. Give you guys a nice big applause. Yes, thank you. All right, so today's episode, what I'm going to really focus on is I want to make sure that I just go back to do some basics here. And the basics for safety consulting is a lot of people go in and they're thinking, I'm going to go through a facility, I'm going to do an audit, and then I'm going to write to clients some recommendation on what I've seen. 
 

[00:07:15.950] - Sheldon 

And you'll use whatever your government entity is for the backup to the compliance side. And when I say backup, I just mean to back up what you're saying. And that's generally what everybody wants to see. They want to see Where is it coming from? Show me the standard that you're just citing right now. And that's true. You're going to end up doing a report and then you're going to have to work that out. All right, so let's talk about the actual process for doing a mock audit. I'm going to call it a mock OSHA audit because that's my regulator, but you guys could call it your regulator's mock audit. First and foremost, if you're going to get what you're going to do, right? You're going to market this. That's what I mean. What you can do? You're going to market this. For in order for you to market this and do this right, I would say the power of the marketing is going to come from the name of your regulatory entity. I'm not telling you to take their logo. I'm not telling you to do anything that says that they're approving this audit. But when you say the word mock or you say the word, well, I've only used the phrase mock OSHA audit, but the idea is you're not the entity. 
 

[00:08:33.350] - Sheldon 

You don't want anyone to think that you're coming from your governmental entity because that's going to take on a different connotation altogether and probably get you in legal hot water. You don't want to say this is OSHA audit or regulatory audit, because you're not the regulator. What you are going to say is you're going to have the eyes of the regulator as you walk through the facility. Here's my tips, and this is the episode today, is the tips for doing physical walkthroughs as a business model here. First, you want to recognize who's at need. If you're in OSHA, you could do this, or to say you're under OSHA's regulation or jurisdiction, you could do this from either their citation sites. You could also look for your national, excuse me, NAISC code for, and that is North American Industry Classification System Code. That's a six-digit code that is for Mexico, America, and Canada. And that six-digit code shows exactly what type of work the person or the company is doing, and it groups everybody that are in the same type of work together by code. You could look up the codes and the ones that are the most hazardous in the eyes of US OSHA, they have an additional record-keeping role for them. 
 

[00:10:08.500] - Sheldon 

And that just means that they have to keep records of injury and illnesses because OSHA says that their activity can lead to more sicknesses, illnesses, or even physical hazards that could lead to somebody getting hurt. So therefore, these codes are going to be the ones that OSHA is going to spend a lot of time on. What you want to do is break down first who will need a compliance audit and a mock compliance audit if we're going to stay true to what I just said earlier. That's the first thing that you want to figure out who's going to need a mock compliance audit. Goodness, I also said compliance audit. Can't do that. I just told you guys don't do that. We're going to do a mock compliance audit. With the mock compliance audit, first, who needs it? The driver. The driver, since we're doing a mock compliance audit, the driver is compliance, right? That makes sense. We're going to look for compliance. After we do that and figure out who the target market is for the service, the next thing that we want to do is price this thing right. When you're pricing, you're going to be thinking about you're going to need to know some things. 
 

[00:11:26.370] - Sheldon 

The first you're going to need to know the NIS code equivalent for your country. Whatever that code is that your country uses to identify businesses to say this is a group of meatpackers, this is a group of sawmills. This is the code for sawmill. Here's the code for construction, here's the code for whatever it is, even agriculture. Any of that stuff, that's the first thing you need to do is figure out who has that regulatory driver after that, then now that NAC guest code, the higher the compliance activity for that code, the more that person will pay as far as your billing. What that means is more exposure to risk. First thing you need to know is what do they do, the business? How risky is that business? Second thing to do, and if you don't have a code like that in your country, use the Americans code. You go to census. Gov/naics, I believe. I'm doing this off the top of the nodding. If I'm wrong, forgive me, but just do a NAIS code search. But in the US system, it's going to be under census. Gov and then NAIS. Use that code-to-do list, figure out who's high hazard. 
 

[00:13:02.560] - Sheldon 

Now, the next thing you need is the amount or to say number of employees, because that's going to tell you how many people, because each person brings a level of risk, right? That's going to tell you how many people are in the organization, how much risk you're going to have for this organization. And then also it's going to tell you size. Company size is always a big one. A reason why you need to know company size is because you are going to end up seeing not only more risk, but you're also going to see where the company themselves, when they're a larger company, they're going to act different than smaller companies. So again, you're thinking risk too. Company size is the next thing you're going to want to do. It's okay to do this in an intake form. Do a Google form online or something. Someone says, Hey, do you do compliance audits? And you say, Sure. Go to this website, fill out this form, and as they fill out the form, then now you get this information back and it lets you know, it gets you started with the pricing side. The other thing that you're going to be thinking around. 
 

[00:14:18.390] - Sheldon 

First, we're looking at their code. Second, after their identification code as industry is going to be the actual size of the company. And then lastly, the other thing that you really want to make sure just to give you a good idea of how much time it's going to take you is if it's possible for you to either do your own research or ask them about square footage or something similar. You want to know how big this facility is because if it's really big, then it's going to take you a while. It's going to take you to maybe three days. That goes into your pricing. You're going to need to know that information right upfront. Then now you get that information. What do we do now? This is going to help you put together just a general cost. First, you're going to think about how long do you want to be at that facility each day. Are you going to do eight-hour days? Are you going to do a six-hour day? Normally, I do six-hour day and no working lunches. If the client already suggests that and they bring lunch in, then obviously you do what the client does. 
 

[00:15:35.870] - Sheldon 

But in some cases, when you're off-site and you're not working or being around the client while you're eating, you take that time out. You're going to calculate how much time do you want in a day. I normally give myself one day for a normal size plant. If it's something that takes up many, many, many square footage, three, four, hundred thousand square footage or something similar, I might take a second day. But generally speaking, I'm going to do one location, one day, and let's say, I'm getting a huge construction site or something then, user discretion. But pricing-wise, I'll do that. But then I'm also going to set another day or two for the report because you're going to need to do a detailed report afterwards. Let's say it's one medium-sized facility, get through it in a day. All right, so then you're looking at at least two days worth of charging them. I'm saying it that way because in our minds first, we always think salary as an hourly because that's where a lot of us come from. I don't want you to bill it hourly because that's going to end up messing with you because you're going to want hour for hour. 
 

[00:17:03.390] - Sheldon 

So you don't want to start thinking and nickel and diming yourself with just the clock. Don't think hourly. That clock is going to mess you up. What you want to do is you want to make sure that you're going to be using the equivalent of hourly to help you get an understanding of your time. Your time isn't hour for hour, but your time is going to tell you, it's going to give you an idea, let's say it this way, of how much it's going to take for you to walk through the facility and do your report. Now you could get a basis of how much you could expect to get paid if you're going to do it on the hourly basis. Just don't build them that way. That's just for you, for your brain. Now that you're thinking about how long it's going to take you to do this, the actual company, meaning the NAIS codes and employees size, this is going to lead you to price range. If you want to do a guideline for your prices, like the higher, if there's more employees, that's going to be a higher tier and therefore it's going to cost more. 
 

[00:18:16.270] - Sheldon 

If it's a bigger square footage, that might cost more. If it's a certain NAIS code or industry code that says it's higher hazard than someone else, you may charge a little bit more by code. That's up to you to decide what your philosophy is on charging. But it's a premium thing, so don't be scared to charge high on this one. You're going to be looking at details, so you're just going to take you a lot of time. It's one of those things that just happens, right? The other thing that you'll be thinking about then is when you're out in the field and you're going to be doing the interaction with everyone, are you going to have somebody with you or not? You want somebody that is knowledgeable with you. If they could obey things and fix things right then, encourage that. You want to make sure that you're going to close vulnerabilities as quickly as possible. So in your bid and your actual, because you're going to have to write all this stuff down in a coherent way and give a proposal to them. So once you structure your proposal, also add in that proposal that you want someone to walk with you. 
 

[00:19:37.960] - Sheldon 

Get maintenance supervisor, operations, somebody that knows the facility that can answer things because you may see something and you just don't know if this is typical of their facility or not. The person walking with you will. All right, so now that's all the stuff that's going to go into the proposal. The pricing is going to be up to you. But again, you start with the hours first. How much hours of that is worth your pricing? Generally, if it's an hourly thing in your mind and you're ready to put it on paper as a project price, not an hourly price, I would always go up a little bit more than what your instinct is. Push yourself a little bit further in your pricing than your instinct. There you go. It's rough. It makes you feel like, Oh, I'm charging too much. But think of it this way. If the compliance agency comes and they now give this individual, this company an actual citation, then when compliance agents come, everybody gets freaked out. When they come, give them an actual citation, it's going to be a lot of money. You want to make sure that you're not going to sell yourself short because that's the price they're going to have to pay anyway. 
 

[00:21:11.060] - Sheldon 

So might as well be something less and I'll go to you. I would also put in a proposal as a aside. I was starting to think about everything and my brain was going about making sure I got everything. Hold on, I forgot to tell you guys on that. Okay, so for your walkthrough, that's going to be separate. Then if the regulatory agency shows up, maybe not through your walkthrough, that'd be pretty wild. But if they do and you have the regulatory agency, they come and they find something and they get cited, and now they want to hire you to work with them on the citation, that would be a separate cost. Don't forget to put that in as a separate cost of saying, Here is my regular hourly rate for just one-off things. If they want you to review something for an hour or something similar, give them an hourly rate for that. But that's not part of the project rate. Then you also want to make sure that you can just ensure that when they're going to say that they need some help with the compliance officer here, that's a separate thing. I call it, for me in the US, I'll call it OSHA mitigation. 
 

[00:22:29.810] - Sheldon 

Osha mitigation services. That's different. That's another project altogether. It's going to be some more research and it shouldn't be tied together, but you need some warning in the proposal that is going to let them know this is the rate. If we got to do something with the regulator and I got to help defend you. That's a different price altogether. I just don't want to forget that. I just want to make sure I put that in. All right, so now let's say you got the bid. Yay, we got the bid. This is something that we've been waiting for. Everybody's all happy we've got the bid. Now that you got the bid, here. We got the bid. Now we're going to go out and do the work. I made a huge mistake one of my clients recently. I had to fly there and I did not… I'm a full-time traveler, like you guys know, that listen to the show regularly. My wife and I, we sold our house back in 2017 and we've been traveling on and off full-time in a RV. Right now I'm in Washington State. Even though Florida is, well, the state where we're, I don't know, home-ish state. 
 

[00:23:48.250] - Sheldon 

I travel a lot. I decided not to bring my PPE with me this time around and I did not have steel-toed boots. I was at a facility doing a walk-through and it was part of their policy to have steel-toed boots and I didn't have it. Not good. It's just like one of those things I just really, really, really, really didn't think about when I was traveling. I was willing to just go to the store and buy it right there. But they said, Don't worry about it. They actually put a little wall around me by one person walking in front and one in the back. I told them I'm going to be very cautious with anything that could drop or anything that I could step on. I had extra precautions there. But generally speaking, if you do your walkthrough, you want to make sure you have your own PPE or you have PPE provided to you so that when you're walking through the facility that your personal protective equipment is going to match whatever that hazard is. Go through the orientation like the client would for everyone. So you do it too. And that's going to at least get you into the system with the client, make them know that you're part of the team because you did everything they're doing. 
 

[00:25:12.620] - Sheldon 

So walk through. I start literally when I park, actually, even before I park. I look at the gate, I look at the entrances. I'm looking for a wind sock when I'm walking in to see, especially if they have chemicals. I'm starting even before I park. I don't have a discipline in security. Safety, yes. Not security. Two different disciplines. But they do overlap in some things. If you see a gate wide open and you could just drive in or walk in and no one even stops you and say, Hey, what's going on? You just wave and they wave right back. All right, that's a safety and security issue, because if that individual has some ill intent, then that could affect everybody in a safety and a security way. I do look for that stuff when I'm pulling in. My head is on a constant swivel. It's exhausting when you're doing a walk-through. This is my process for you guys. First, I'm looking down and I'm looking down to make sure I'm not slipping and tripping on anything, and I'm looking up to make sure nothing's going to fall down on me, then side to side. I'm looking macro, meaning a wide view, and then micro, a small view. 
 

[00:26:34.200] - Sheldon 

I'm going to look at the full facility, the full walk path first, and then I'm going to look at each step. That's the macro and micro. That's how I'm going through the facility. I'm going to ask questions. If I see something from… Let's go back. Hold on. I got to change my thought. Look for both exposure and hazards. What regulatory agencies normally will do would look for exposure first, meaning people, go to the people and then see what hazards are around the people. So if you want to do the same thing, exposure first people, and then look around the people. But you're looking for details. I mean, things that people overlook, things that's got dust on it that's been there forever, bottles that are just laying around with colors of liquids, then it says water, but it's red, that stuff. You're looking for details. If you want to talk to the worker, which you should, make sure that the worker isn't actively engaged in work because you don't want to be a new hazard to them. You could monitor, watch them first when it's done and it's safe to approach, then talk to the worker. 
 

[00:27:50.250] - Sheldon 

You want to find out about safety culture, you want to find out about procedures, you want to find out about training, that's going to give you a nice little snapshot of the day and then also leading up to the event, whatever that person's doing. That is going to be your day of truly going through that stuff, looking for details. If you don't understand anything, that's okay. With your walkthrough, you do need to have some technology. Sometimes I'm going to be using a sound meter, and I actually use the apps for that. It's not calibrated to the degree that is going to be compliance, but they're really good. I use the Sound meter app for decibels just to find out if it's an acceptable decibel or not. I do tell the client that it's not something that you could use for compliance. It's just to get a little idea. The other thing that I'm going to have available for me is a measuring tape because you're going to need to measure a bunch of other stuff. Another thing that you might want to have available to you is just to make sure that you yourself are going to stay hydrated, especially as you're going to walk through the facility. 
 

[00:29:12.890] - Sheldon 

I take pictures too. You need pictures, you need videos and things like that. Definitely, you're going to need your camera gear. But as far as keeping yourself safe, definitely have some hydration station that you go to often or bring with you. As long as you're not in the process area or anything where you could eat and drink, definitely have that. My last inspection was 103 degrees in Texas. I know it was miserable, the temperature. But the place, I love Texas. It's just so grand. You could see a whole bunch. But summertime, no. That's what we want to go up north where I am right now. So keep yourself safe. After that, when you get back, we have some conference, closing conference, and opening conference. Dude, don't forget that. Tell everybody what to expect before you go out in the field. Then when you come back, everyone could go ahead and do a nice little review. What do we see? That's not your report yet because you have to go back. You have to really go through all your pictures. You have to make recommendations. It's going to be looking up things. My report, I tell them the price of action, the price of inaction. 
 

[00:30:38.580] - Sheldon 

It's up to you how you're going to design your report at the end. But that's going to take probably another week. It probably week or two for you to get that done. Price that in as well. But what I do is I count that as an extra day. Sometimes it's more than one day, but that's my pricing for that. Together, once you get done, you get your report done, you get your recommendations done. If you need to check it with another safety or compliance buddy just to make sure that you're not missing anything, the thing to do if you're going to have some assistance is to give them a little money. Go ahead, break them off a little something to help you out to be that second eye because you're taking time, energy, and away from them, so you might as well add to your cost that little price to have someone else look at your work too. You give the client something that is going to be pretty much ready, finished product. Now after that, the recommendations could be a follow-up service. If you could have some follow-up service, that would look like training. 
 

[00:32:02.090] - Sheldon 

It could also look like you coming back and checking everything out again in six months and a year and do another one. That is another way. There's more things you could do, but that's another way to make sure that there's an ongoing relationship after this mock OSHA audit or mock compliance audit. All right, see, that wasn't bad, was it? That is how and all the other stuff related to doing a mock OSHA audit for your client. It's to make sure that I know that everyone is going to be thinking of this as going to be… I shouldn't say no. I don't know anything. But this is going to be something that I'm hoping is going to be too… I don't know. A daunting. That's the term. I had to think of it in my brain, daunting. It's actually fairly easy. It's just detailed. Pay attention to details. If I tell you anything else and you get anything else in any of your mock compliance audits, pay attention to details. That's what they're really paying for. All right. Again, I was just giving you guys some information on how to do audits if you go to safetyconsultant. 
 

[00:33:35.360] - Sheldon 

Tv, I help you out with that. Then I also have forms there too. If you get on there, listen to truly any of your stores that have apps, just honestly type in Safety Consultant TV, you got me? You're going to use code SC 101. But the benefit is you can also get templates. Now you can look at the written programs you're going to look at for your clients, and then you can match it to the templates on the Safety Consultant TV. All right, gang, you got this. Go get them. This episode has been powered by Safety FM. 
 

[00:34:25.500] - Disclaimer 

The views and opinions expressed on this podcast or broadcast are those of the host and its guests and do not necessarily reflect the official policy or position of the company. Examples of analysis discussed within the past hour are only examples. They should not be utilized in the real world as the only solution available as they are based on very limited and dated open-source information. Assumptions made within this analysis are not reflective of the position of the company. No part of this podcast or broadcast may be reproduced, stored within a retrieval system, or transmitted in any form or by any means, mechanical, electronic recording, or otherwise without prior written permission of the creator of the podcast or broadcast, Sheldon Primus.