The true cost of an environmental audit.

Written By: Doug Ruhlin | May 12, 2016

Time to Read 7 Minutes

Environmental audit costs & prices are impacted by the variables at your facility.

With the rise in 3rd party environmental lawsuits, and the very real threat of enforcement action at your facility due to easily accessed information online, a lot of folks across the country are starting to seriously look at their compliance level.

The problem is, facilities across the United States have a variety of bewildering laws to comply with on a federal, state, county, and sometimes even city, town, or municipal level. Everyone from environmental managers to business owners are wondering how they can make sure they're in compliance, and they're doing that by going through an environmental audit.

But they don't know how to go about it. Sure, they could have their own environmental manager conduct the audit, but would you trust the guy whose job, salary, and reputation are on the line? The guy who already might not be doing his job correctly?

No, people are turning to outside help for an audit. The issue is, no one knows the true cost of an environmental audit. You could hire a multi-national organization that'll charge you a half a million dollars right off the bat, or you could hire a local guy for a couple hundred bucks.

The issue is, an environmental audit can cover such a wide variety of issues that pinning the price down can be very tricky. Fortunately, you can get a general guide to the price of an environmental audit by narrowing down some variables.

Price or Cost of an Environmental Audit

Factors that impact environmental audit costs.

The price of an environmental audit can depend on a lot, but initially you're going to want to make sure your audit meets a few key requirements in order for you to gain maximum value.

  • Your environmental audit should be comprehensive in scope. Meaning, your audit needs to cover all applicable regulations that apply to your facility. But, just because it's exhaustive doesn’t mean your environmental audit should cost an arm and a leg. There's plenty of regulations that could apply to you, so you'll need to ensure you're hiring a company that knows your industry, your type of facility, and your operation.
  • Audits should always be impartial. Remember what I said before about having your environmental manager conduct an audit? If someone's job is depending on the outcome of the audit, you're going to get a biased report. Whether they're not as diligent as an outside party, they're not educated enough, or they're willfully ignoring regulations, you're not going to get the type of audit you should be getting. Yes, using someone from inside your organization might cost less in the short-term, it certainly won't yield the same results.
  • Consider getting an audit on some sort of regular basis. Audits should be regular in nature. You could start off by hiring an outside company, and then use someone internally the following year, and then an outside expert the following year, and so on and so forth.
  • Hire an organization or an expert who knows what they're doing. The cost to hire an international organization specializing in environmental matters to conduct an environmental audit might be overkill, but hiring a local guy might not be enough. You're going to want to make sure you're spending money wisely. This isn’t a good time for someone brand new to be hired or someone who has zero experience in your line of industry. These folks simply won’t know enough to ask the right questions.

Short-term environmental audit costs are very low when you look at the big picture.

Audits, when done correctly, can provide a lot of benefit to you and your organization.

First and foremost, they help you determine if you’re okay regulation-wise so you can sleep easy at night.

Conversely, they can point out where you’re deficient, so you can correct those shortcomings before having them pointed out via a violation or lawsuit.

Finally, they can also provide you with protection against federal and state regulatory liability, should something missing or wrong be found, through the federal USEPA's Audit Policy and state self-disclosure programs.

Explanations on environmental audit costs & prices.Environmental Audit Costs

Folks at this point are either in or out. They're either ready to get a proposal, or they choose to stick their head back in the sand.

People now want to know 'how much'. What's the price of an environmental audit? And the answer unfortunately is… it depends. It can be around a thousand, or over a million. Let's break down the factors to get to a more reasonable number.

Environmental audit prices are reflective of what you want audited.

Are you looking for a complete, comprehensive environmental audit? A complete audit is your best choice for identifying any and all shortcomings regulations-wise, but it's not your only choice. If you're looking for an audit to specifically target one regulation, you can expect to pay a different price. For example, an audit solely focusing on NPDES stormwater permit regulations would be drastically cheaper than an audit that examines your whole operation.

The size and type of your facility will affect the price of an environmental audit.

What type of facility is going to be audited? How complicated is it? For example, a small machine shop with only a couple of applicable regulations is going to be a whole lot easier than auditing a large refinery complex with complicated permitting issues on a huge piece of property.

Your processes impact environmental audit prices.

If you only make one widget or product at your operation, it's likely to be a lot easier than a complex facility that produces hundreds of products. The complexity of your manufacturing processes will, and do, impact the price of an environmental audit.

The turn-around time for an environmental audit effects the price.

Like anything else in life, if you want something done NOW, it's going to cost a premium. If you're thinking ahead, and can start talking, planning, and looking into the process of getting an audit, you're not going be charged that 11th-hour fee.

The number of facilities getting an environmental audit will impact the price.

If you're getting an audit at one facility, you're going to pay a set rate. If you're getting an audit at 5, 10, or 50 facilities, you'll likely receive a 'package deal'.

So, if you had 10 plants of the same type of industry, we would discount the price of the audits because of being able to look at similar facilities that similar regulations apply to. But, if you had 10 plants spread across 10 states, that discount would be somewhat less because we'd need to look at state-specific regulations at each facility.

Conversely, if you had 10 facilities and each was a different type of industry, your discount would be even less because we'd need to be looking at different regulations for each operation. And, if those 10 facilities were spread across 10 different states, there might not be a discount, since every operation is getting audited in a different manner.

Where is the environmental auditor coming from?

Simply put, are you hiring someone from the other side of the country? This ties into the last point. We're located in New Jersey, and if you hired us to conduct an audit at your facility in Seattle, WA, we'd factor in travel time & costs. Conversely, if you hired someone from Portland, OR, their travel time & costs would be lower than ours.

If you had 15 facilities located in and around the city of Seattle, the travel time & costs for any consultant would be spread over those 15 locations.

Who is involved impacts the cost of an environmental audit.

If you want maximum protection against unauthorized disclosure of the audit results, you may want to utilize the attorney-client privilege option for your audit, in which case you’ll need a qualified legal counsel. You're ideally going to want counsel with solid environmental experience, and not your buddy who handled your last house closing. You're also going to need an experienced environmental professional. Go that route, and the cost goes up.

Environmental Audit Costs & Prices

Average environmental audit prices & costs.

So what’s a typical cost for an environmental audit of a typical industrial or commercial facility in the United States?

From our experience, the range in environmental audit costs can go from a low of around $2,500 for very simple, small facilities to well over $40,000 for very large, complicated facilities.

If pressed, I’d probably say that an average cost for an environmental audit in the U.S. is probably in the range of around $6,000 to $7,500, give or take a thousand or two. But of course, that can go up, and it can go down.

Unfortunately, the answer really depends.

The true cost of an environmental audit.

You might be thinking $6,500 seems like a lot of money, but think of what you have at risk.

Non-compliance, without a doubt, is far more expensive than an environmental audit. For instance, one simple fine can be much, much more than $6,500.

For example, NPDES fines begin at $37,500 per day.

TRI Reporting fines routinely range in the hundreds of thousands to multi-million dollar range.

Does that environmental audit seem costly now?

Imagine you got sued by a 3rd party environmental group. There are steps you can take to avoid a lawsuit from a 3rd party environmental group, but if you wind up in the crosshairs, you could be in for a world of hurt. You could be looking at something obscene, like millions of dollars in potential judgments.

Now how does $6,500 look? Looks like pretty cheap insurance I’d say.

So while a typical environmental audit might cost you a few thousand dollars, the value is really priceless.

To learn more about the auditing process, or how much an audit may cost at your facility, click here to contact us or give us a call anytime at 609-693-8301.

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