GAP.1.10.0.

CONDUCTING THE LOSS PREVENTION AUDIT

The loss prevention audit is designed to provide management with feedback about how well the other
OVERVIEW programs are being implemented at a facility.
The in-house inspector must tour the entire facility, including outside areas, roofs and the interiors of
all buildings. A report form, such as the one shown in Appendix B, should be completed during each
audit. The suggested report form is a brief checklist of all management programs in force. Appropriate
comments should be made only where deficiencies or major changes are noted. Most facilities will
require a custom-designed form.
The inspector should be familiar with the facility’s Management of Change (MOC) program. During
the audit, the inspector should determine whether MOC procedures were followed in implementing
each change noted as a result of the audit.
Loss and “near miss” reports for incidents occurring since the last audit should be thoroughly
reviewed to identify management program failures. Any deficiencies found should be corrected.
Following are specific areas to check for the OVERVIEW programs listed on the sample form:

MANAGEMENT OF CHANGE
It is not the inspector’s responsibility to evaluate changes but to ascertain the present state of the
facility’s Management of Change system. The inspector should be familiar with the facility and its
processes, procedures and personnel so that any changes will be recognized. Then the concerned
personnel and documentation should be consulted to determine if all relevant Management of
Change procedures have been followed properly.

IMPAIRMENTS TO FIRE PROTECTION SYSTEMS

In verifying that the impairment handling program at the facility is functioning properly, the inspector
should be thoroughly familiar with Global Asset Protection Services (GAPS) RSVP impairment
handling program or other equivalent program in use at the facility. At the time of each audit, the shut-
off and reminder tags should be reviewed for each impairment that has occurred since the last audit.
During this review, evidence of any improper handling should be noted. Any impairment encountered
during the tour should be reviewed to be sure proper procedures are followed.

SMOKING REGULATIONS
While touring the facility, the inspector should check for the following:
• Proper posting of “No Smoking” signs;
• Evidence of failure to comply with smoking regulations, such as discarded smoking materials or
someone smoking in “No Smoking” areas;
• Occupancy changes requiring revisions of smoking regulations;
• Cleanliness in smoking areas.

MAINTENANCE
The inspector should be alert to indications of deficiencies in the maintenance management program.
Work orders and equipment data files should be checked to determine if proper priorities are being

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followed. If the maintenance information system is computerized, access to it will allow the inspector
to audit its general condition. Observation of maintenance jobs in progress should reveal the
adequacy of training, as well as the general competence of, and direction given to, maintenance
employees.
The inspector should review maintenance records and equipment operating logs, paying particular
attention to the possibility of adverse trends developing unnoticed. Any changes made in original
devices or materials should be documented in the facility’s MOC program.
The inspector should confirm that all components and systems determined to be “critical” or safety-
related by the Hazard Identification and Evaluation (see GAP.1.13.0) have been so noted within the
maintenance program. A review of the written maintenance notification reports to management
should reveal whether any critical components or systems have been out of service and whether any
safety-related components or systems remain out of service.
During the plant tour, the inspector should note indications of maintenance deficiencies. These
indications include:
• Building Construction
Blistered or damaged roof covering;
°
Loose flashings;
°
Improperly sealed penetrations;
°
Overloaded floors;
°
Excessive cracks in masonry walls;
°
Broken windows.
°
• Electrical Equipment
Covers not in place on junction boxes and equipment enclosures;
°
Missing bolts and threaded covers on hazardous location equipment enclosures;
°
Covers, including gaskets, not in place on weathertight equipment enclosures and junction
° boxes;
Use of temporary wiring, including extension cords;
°
Presence of “cheater cords,” which allow use of nonapproved devices in hazardous locations;
°
Dust, dirt and residues in and on motors, panels and lighting fixtures and corrosion of
° enclosures and conduits;
Missing or cracked globes on lighting fixtures in hazardous areas;
°
Any evidence of arcing or overheating;
°
Leaking insulating fluids;
°
Wear, chafing or other mechanical damage to cables or enclosures.
°
• Piping
Missing flange or support bolts;
°
Leaking joints and valve packings;
°
Excessive corrosion;
°
Loose, missing or “bottomed out” supports or hangers;
°
Hammering or vibration.
°
• Machinery
Improper lubrication;
°
Excessive or unusual noise or vibration;
°
Missing bolts in cover plates;
°
Any hastily erected, temporary equipment;
°
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Loose or broken foundation bolts.

°
• Boilers and Pressure Vessels
Leaks, cracks, bulges, local overheating or excessive corrosion;
°
Corroded or leaking safety or relief valves;
°
Relief valve discharge piping reduced in size or not properly supported;
°
Loose or missing insulation.
°
EMPLOYEE TRAINING
During loss prevention audits, the inspector should be alert to unsafe work practices, which may
indicate inadequate employee training programs or the need for retraining. The inspector should be
familiar with the work methods taught in the training programs to determine whether the work
practices observed during the audits are “by the book” or are worker adaptations.
If worker adaptations are observed, the inspector should determine if management tolerated the
modification. This would indicate a lack of support for the training program. The inspector should
determine if proper Management of Change procedures were followed in instituting the changed work
practices.
Loss and “near miss” reports should be reviewed to determine whether employee training needs
improvement.

NEW CONSTRUCTION
If any new construction, remodeling or change of occupancy is underway, the inspector should
determine whether codes and standards are being observed, protection features are being expedited,
combustible materials are being kept out of buildings until sprinklers are in service, and trash is being
removed to ensure proper housekeeping.
For major construction projects, the inspector should accompany the construction manager on a tour
of the site to determine that the precautions listed are being taken. In any recently completed
construction, the inspector should determine whether loss prevention and protection specifications
were actually followed.

LOSS PREVENTION RECOMMENDATIONS

The inspector should be familiar with GAPS recommendations and should report on the status of any
that are being, or have recently been, completed.

PRE-EMERGENCY PLANNING
The inspector should be familiar with the written pre-emergency plan to determine whether it is
current and takes into account changes in new construction, occupancy, operations or personnel. The
inspector should also check the records to determine whether the Fire Brigade is training regularly
and to be sure that the public fire department has visited the facility within the last year. If it was
necessary to implement the pre-emergency plan since the last audit, the inspector should determine if
the results were properly critiqued and any deficiencies corrected.

HAZARDOUS MATERIALS EVALUATION

During each loss prevention audit, the inspector should check for new materials being used. When a
new material is found, the inspector should hold a discussion with the person responsible for
hazardous materials evaluation to determine if it has been evaluated and what cautionary signs or
markings are required.

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New materials are usually encountered where new processes or operations have been installed.
However, materials used in an old operation may be changed for a variety of reasons. For example, a
more effective material might be found or a less expensive material used in a process. Whenever
materials have changed, the inspector should confirm that the change was reviewed under the MOC
program.
During the tour, the inspector should also check areas known to contain hazardous materials to see
that proper signs and labels are being used and are readable. Random discussion with area
supervisors and operators should be held to determine whether they understand the hazards of the
materials.

CUTTING, WELDING AND OTHER HOT WORK

During each loss prevention audit, the inspector should observe any hot work in progress. First, the
existence of a properly completed and signed permit at the job site should be verified. Then the work
practices being followed should be compared to those indicated on the permit. The inspector should
also check the condition of hot work equipment and verify that warning tags are in place. The file of
permits pertaining to jobs done since the last audit should be reviewed to see that proper procedures
were followed.

FIRE PROTECTION AND SECURITY SURVEILLANCE

To verify that the surveillance program at the facility is functioning as intended, the inspector should
spot-check guard records to be certain the guards are making tours correctly. If passive programs are
in use, the inspector should verify that fire protection signaling systems are in service and have been
properly tested as a part of the fire protection equipment inspection and that other protective systems
are being maintained as well. The inspector should also check other elements of the passive
programs such as barriers, fences and locks to be certain that they continue to perform their intended
function. Where identification badges are used, the inspector should record any infractions of this
system.

FIRE PROTECTION EQUIPMENT INSPECTION

The inspector should determine if inspections are being made at proper intervals, review the records
for each inspection, and ascertain whether corrections are being made promptly. During the loss
prevention audit, the inspector should note any deficiencies that would indicate weaknesses in the fire
protection equipment inspection program.

HAZARD IDENTIFICATION AND EVALUATION

While it is not the inspector’s responsibility to evaluate hazards, changes noted in the hazard level
should be recorded, along with a description of the nature of the change. Hazard level changes may
stem from new processes, equipment, or materials. The inspector should determine whether MOC
procedures were followed in making the changes.
In addition, increased production rates may raise the hazard level. This may be the result of increases
in storage and handling of hazardous materials or the operation of processes or equipment at rates
above design capacity.
Some of the more common types of hazard increase include:
• Use of a new flammable solvent in place of a nonhazardous liquid;
• Warehousing or storage higher than normal, storage in aisles, or increased storage of a hazardous
material such that quantities exceed protection design parameters;
• Improper types of industrial trucks being operated in hazardous areas;
• Combustible stock stored in an unsprinklered area;

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• Safety instrumentation out of service;

• Ineffective operation of dust or vapor control equipment;
• Machine speedup undertaken without consideration of all the stresses involved;
• Unauthorized adjustment of safety valve, overspeed trip, axial position limit or other safety, or
disabling of the devices themselves;
• Use of external fans or water spray for additional cooling of electrical equipment.

PROPER HOUSEKEEPING
During each loss prevention audit, the inspector should check that specified levels of housekeeping
are being maintained throughout all areas of the facility. This check should include:
• All areas on each floor. Special attention should be given to enclosed, low-traffic areas. Areas
such as elevator machinery rooms and electrical transformer/switchgear rooms should be free of
storage and debris.
• Outside yard areas. Dried vegetation, debris and combustible yard storage should be kept well
away from buildings, utilities and liquefied gas storage containers.
• Exposing properties. While it may not be possible to make internal building inspections, any
obvious deficiencies should be noted. The inspector should make appropriate recommendations to
protect the exposed part of the facility.

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