Voluntary Disclosure Reporting Program
By Gregory J. Reigel
© February, 2007 All rights reserved.
What if you hold a Part 135 air carrier certificate and you discover that you operated one of your aircraft beyond the mandatory compliance date without completing a required inspection? Or, what if you hold a Part 145 repair station certificate and you discover that several of your spare parts were either mislabeled or improperly stored? In either situation, a violation of the FARs has likely occurred. But do you have to lose sleep at night wondering if the FAA will discover the violation during the next inspection? Is a civil penalty, suspension or revocation in your future? Not necessarily. If you qualify, the Voluntary Disclosure Reporting Program (“VDRP”) may allow you to disclose the violation and merely receive a letter of correction in your file.
The FAA established the VDRP to provide a positive incentive to certificate holders, rather than the negative incentives of civil penalties and certificate actions, to promote and achieve compliance and aviation safety. The FAA believes that when a certificate holder detects violations, promptly discloses the violations to the FAA, and takes prompt corrective action to ensure that the same or similar violations do not recur, safe operating practices and compliance with the FAA’s regulations will result. The VDRP is available to certificate holders issued certificates under FAR Parts 21, 119, 121, 125, 129, 133, 135, 137, 141, 142, 145, 147, Production Approval Holders (“PAH”) and for program managers of qualified fractional ownership programs operating under Part 91K (for purposes of this article I will refer to these collectively as “certificate holders”).
When Does The VDRP Apply?
The VDRP does not apply to all violations by a certificate holder. A violation must meet the following five conditions to qualify:
(1) The certificate holder has notified the FAA of the apparent violation immediately after detecting it and before the FAA has learned of it by other means;
(2) The apparent violation was inadvertent;
(3) The apparent violation does not indicate a lack, or reasonable question, of qualification of the certificate holder;
(4) Immediate action, satisfactory to the FAA, was taken upon discovery to terminate the conduct that resulted in the apparent violation; and
(5) The certificate holder has developed or is developing a comprehensive fix and schedule of implementation satisfactory to the FAA. The comprehensive fix includes a follow-up self-audit to ensure that the action taken corrects the noncompliance. This self-audit is in addition to any audits conducted by the FAA.
If all five conditions are not met, the FAA may pursue enforcement action against the certificate holder if it discovers the violation either through a disclosure by the certificate holder or by some other means.
Individual Airmen May Be Covered
The VDRP also applies to individual airmen and agents of the certificate holder if the following occurs:
(1) The apparent violation involves a deficiency of the certificate holder’s practices or procedures that causes the certificate holder to be in violation of a covered violation of an FAA regulation;
(2) The airman or other agent of the certificate holder, while acting on behalf of the certificate holder, inadvertently violates the FAA’s regulations as a direct result of a deficiency of the certificate holder that causes the certificate holder to be in violation of the regulations. (The VDRP does not apply to the airman or other agent when his or her apparent violation is the result of actions unrelated to the certificate holder’s deficiency);
(3) The airman or other agent immediately makes the report of his or her apparent violation to the certificate holder; and
(4) The certificate holder immediately notifies the FAA of both the airman or other agent’s apparent violation and the apparent deficiency in its practice or procedures.
How Does The VDRP Work?
The initial notification/disclosure to the FAA must be “timely.” Although the FAA state that it should ordinarily occur within 24 hours of the discovery of the apparent violation, an inspector may accept disclosures that exceed the 24-hour policy when the inspector determines that specific circumstances justify the later submission, and in view of those circumstances, the submission is still considered timely. The notification/disclosure may be made verbally, in writing or via the FAA’s web based VDRP.
The initial disclosure should include the following information:
(1) A brief description of the apparent violation, including an estimate of the duration of time that it remained undetected, as well as how and when it was discovered;
(2) Verification that noncompliance ceased after it was identified;
(3) A brief description of the immediate action taken after the apparent violation was identified, the immediate action taken to terminate the conduct that resulted in the apparent violation, and the person responsible for taking the immediate action;
(4) Verification that an evaluation is underway to determine if there are any systemic problems and a description of the corrective steps necessary to prevent the apparent violation from recurring;
(5) Identification of the person responsible for preparing the comprehensive fix; and
(6) Acknowledgment that a detailed written report will be provided to the certificate holder’s principal inspector (“PI”) within 10 working days.
The detailed written report submitted by the certificate holder within 10 days of the initial notification/disclosure must include the following:
1) A list of the specific FAA regulations that may have been violated;
2) A description of the apparent violation, including the duration of time it remained undetected, as well as how and when it was detected;
3) A description of the immediate action taken to terminate the conduct that resulted in the apparent violation, including when it was taken, and who was responsible for taking the action;
4) An explanation that shows the apparent violation was inadvertent;
5) Evidence that demonstrates the seriousness of the apparent violation and the regulated entity’s analysis of that evidence;
6) A detailed description of the proposed comprehensive fix, outlining the planned corrective steps, the responsibilities for implementing those corrective steps, and a time schedule for completion of the fix; and
7) Identification of the company official responsible for monitoring the implementation and completion of the comprehensive fix.
Once the PI receives the proposed comprehensive fix, he or she will work with the certificate holder to implement the fix and to ensure that any systemic problems that caused the violation are identified and remedied. Typically, this occurs over a period of time. After initial implementation of the fix is completed, the PI will issue a letter of correction. The PI then monitors the remaining corrective steps identified in the plan. If the certificate holder does not complete the fix or takes actions inconsistent with the fix proposed in the plan, the PI may rescind the letter of correction, re-open the investigative report, and initiate appropriate legal enforcement action.
When all corrective steps are completed, the PI will perform a final assessment to confirm that all required steps were satisfactorily completed. The certificate holder will also perform a self-audit to confirm that the condition that gave rise to the violation has been corrected. If the PI determines that the fix was satisfactory, he or she will then complete a statement of follow-up investigation and close the case.
Privacy Of Disclosures
As an additional incentive to certificate holders, records submitted to the FAA for review pursuant to the VDRP are protected from release to the public under FAA Order 8000.89, Designation of Voluntary Disclosure Reporting Program (VDRP) Information as Protected from Public Disclosure under 14 CFR Part 193.
By taking advantage of the VDRP, certificate holders can identify and correct their own instances of noncompliance and invest resources in efforts to preclude their recurrence. This sure beats losing sleep at night regarding an inadvertent violation.
If you would like more detailed information regarding the VDRP, you should review Advisory Circular AC 00-58A, Voluntary Disclosure Reporting Program.