I Hear You Knockin’… Preparing for and Managing DEA Inspections (Part 3)

This is the third in a series of posts on what DEA registrants can expect during cyclic and on-site inspections.  Our series focuses on the background of such inspections, how investigators conduct them and how registrants should proactively prepare for and manage them.  Part 1, posted May 3rd, examines the purpose, background and scope of DEA cyclic and on-site inspections.  We posted Part 2 on May 21st, explaining how diversion investigators conduct on-site inspections and what registrants must do before, during and after each inspection to minimize negative findings.

The link to Part 1 is here and Part 2 is here.

Part 3 below lists DEA inspection do’s and don’ts for registrants. They are intended to help DEA registrants be prepared for a DEA inspection.  In our experience, unpreparedness can lead to confusion or misunderstandings during an inspection, and potentially cast a negative light on an  otherwise compliant facility.

Inspection Do’s and Don’ts

Registrants should implement the following to prepare for and manage DEA cyclic inspections:

1. Designate a specific employee as the contact/liaison for any DEA inquiries or inspections. Also, ensure at least one contact/liaison back-up given that regulatory inspections always seem to occur at the worst time, i.e., the designated employee is on vacation or out that day.  The designated contact/liaison should greet the investigators immediately upon commencement of a DEA inspection, and be available at all times while investigators are on-site.
2. Ensure DEA registrations and state licenses are current and active and copies maintained in an easily accessible file.
3. Maintain an updated copy of all controlled substance policies and procedures. These should be routinely reviewed and ensure that they comply with the current federal Controlled Substance Act (“CSA”) and regulatory requirements.  We also suggest that a DEA registrant have a specific protocol or policy that details responsibilities during a DEA inspection.
4. Conduct periodic random audits and mock DEA inspections comprising accountability audits, and record/report and security reviews. These should be performed by third-parties or independent staff without day-to-day controlled substance responsibilities. Periodic random internal audits disclose losses and deter internal theft. Mock internal inspections help ensure compliance and instill familiarity and confidence in employees during actual DEA inspections. Review prior DEA inspection documents and notes.  Ensure past deficiencies have been remedied.
5. Compile and maintain an updated inspection binder to provide to investigators comprised of: (a) Copies of current DEA registration and state license certificates; (b) List of controlled substances handled for prior two years; (c) Corporate structure; (d) Hours of operation; (e) Officers, management and responsible employees’ name, home address, date of birth and social security numbers; (f) Employees with access to warehouse, cage and vault; (g) Security system component literature with specifications; (h) Alarm test results; and (i) Central station alarm monitoring contracts.
6. Consult with Human Resources and employment counsel on requests from DEA for personal employee information.
7. Maintain all required records and reports in a manner that they can be readily identified, produced or retrieved (in the case of electronic records).  For paper records this means  having them organized and stored in a location that can be easily retrieved.  Be clear on designation of official records that will be produced during any inspection.
8. Maintain required records and reports for at least two years unless state law requires they be maintained for a longer period of time. Maintain records and reports on-site unless the registrant has notified DEA of off-site storage.
9. Maintain controlled substances in secure areas at all times except during receiving, processing, packaging, labelling or conveying to the secure loading area. Return controlled substances to secure areas as soon as possible at the end of the activity or workday.
10. Ensure controlled substances awaiting return or destruction are properly secured and documented. Remember that such products must still be included in any current inventory until they are removed from the facility.
11. Regularly dispose of expired or unusable controlled substances. Although DEA regulations do not require expired or damage drugs to be disposed of in a certain time, keeping excessive inventories of drugs to be destroyed can be viewed by DEA as a security risk.
12. Change locks or keycard access, and update lists of authorized employees with access to the warehouse, cage and vault after every relevant personnel change.
13. Inspect security system components at least quarterly. Repair broken or inoperable components immediately.  (Investigators also appear when a security component is not working properly).  Maintain documentation and literature related to the security system and its components for future reference.
14. Test every alarm sensor with the central monitoring station at least twice a year.
15. Evaluate and understand the scope of the DEA inspection. Review each investigator’s credentials and request copies of their business cards.  Understand the differences between a Notice of Inspection, Administrative Inspection Warrant (“AIW”), or Search Warrant.  Corporate counsel should always be notified in the event of an AIW or Search Warrant
16. Ensure that investigators have an area to work that does not interfere with operations.
17. Keep accurate notes of all requests for information and/or observations, criticisms or recommendations by DEA investigators. Request clarification from investigators on any areas or requests that are unclear.
18. Employees should assist investigators with any routine questions about operations or records/reports. However, any requests to interview employees should be referred to senior management and counsel.
19. Make sure that investigators have all records and reports to conduct their audit and that they understand the registrant’s recordkeeping, reporting and security. Inform the investigators immediately if they do not have accurate counts and inventories of every drug they are auditing, or if they are missing relevant records or reports. Understand the methodology the investigators use to conduct their accountability audit.
20. For the final audit count, do not overlook drugs in the morgue awaiting destruction or elsewhere on the premises.
21. Photocopy or set aside in a separate file all records and reports that investigators review, make copies of, take or specifically raise questions about during the investigation.
22. If the investigators take drugs or original records or reports off-site, obtain a DEA receipt (“DEA Form-12”) listing each item.
23. Correct deficiencies found by investigators while they are on-site or as soon as possible thereafter.
24. Provide unavailable information and records or reports requested by the investigators as soon as possible if appropriate to do so.
25. Do not surrender a DEA registration without consulting an attorney.
26. Although not required by DEA regulations, request a final discussion or exit interview with the investigators at the conclusion of their on-site activities.
27. Conduct a post-inspection mirror audit to identify/anticipate any issues DEA may raise in the future and be prepared to address or where necessary take remedial action.

Conclusion

Implementing the recommendations above will help registrants proactively prepare for and manage DEA inspections.  Preparing for and managing successful DEA inspections require preparation, organizing and maintaining complete and accurate records/reports but also employee familiarity with what to expect.  Knowledge of DEA cyclic inspections provided in our three posts will put registrants in the best position to achieve those goals.