By Colleen Kave, J.D.
The U.S. Department of Transportation’s Office of Inspector General (OIG) published an audit report this week that catalogues shortcomings in the National Highway Traffic Safety Administration’s (NHTSA) recall processes. The report, mandated by the Fixing America’s Surface Transportation (FAST) Act of 2015, addressed congressional concerns arising from NHTSA’s handling of the Takata airbag recall, a decade-long campaign affecting an estimated 37 million vehicles. OIG concluded that NHTSA’s recall management lacks adequate procedures and oversight, and made six recommendations for improving the agency’s processes (NHTSA’s Management of Light Passenger Vehicle Recalls Lacks Adequate Processes and Oversight, Report No. ST2018062, July 18, 2018).
OIG’s audit objectives were to assess NHTSA’s procedures for (1) monitoring manufacturers’ proposed recall remedies and scope, and (2) overseeing safety recall implementation, including the sufficiency of recall completion rates. With respect to monitoring recall campaigns, the report found that NHTSA’s process lacks documentation and management controls, and does not ensure complete and timely reporting of remedies. Additionally, despite its authority to do so, NHTSA does not verify recall completion rates, and it lacks sufficient management controls to ensure a risk-based approach in deciding whether to use oversight tools to improve recall completion rates. In terms of oversight, NHTSA expanded its oversight of the Takata recalls in 2015 by increasing reporting requirements for automakers. However, the agency failed to follow its own procedures to address low recall completion rates for earlier Takata recalls.
The OIG report provided six recommendations aimed at improving NHTSA’s processes for monitoring recall remedies and scope and overseeing safety recall implementation:
- Develop and implement a risk-based process to monitor manufacturers’ reporting of recall remedy, scope, and risk information. The process should include taking appropriate steps with manufacturers that are not in compliance, including enforcement actions when necessary, as well as verifying information submitted by manufacturers, and identifying and addressing potential inadequacies of recall remedies and scope. NHTSA partially concurred with this recommendation, stating that optimizing safety through compliance can be achieved largely through non-enforcement actions, but agreeing to take investigative or enforcement action when necessary and to consider appropriate steps if it appears manufacturers have provided inaccurate information.
- Develop and implement a risk-based process—with specific timelines—that provides guidance for NHTSA’s Office of Defects Investigation (ODI) staff on identifying recalls with missing communications (e.g., dealer notifications, technical service bulletins), taking appropriate action to resolve the deficiency, and documenting the outcomes in an official recordkeeping system. NHTSA partially concurred with this recommendation, agreeing to update its procedures to include general timelines for resolving missing communications and documenting the outcomes.
- In accordance with the Government Accountability Office’s Standards for Internal Control in the Federal Government and NHTSA’s procedures, develop, implement, and document management controls, including a supervisory review process, for monitoring recall remedies, scope, and risk reporting and oversight of recall implementation. NHTSA concurred with this recommendation.
- Develop a training curriculum on staff responsibilities for updated recall monitoring and oversight processes, and provide this training to ODI and Office of Vehicle Safety Compliance staff. NHTSA concurred with this recommendation.
- Update the recall reporting portal and issue written guidance to identify all recall scope, risk, and completion rate information that regulations require manufacturers to submit. NHTSA concurred with this recommendation.
- Document lessons learned from the Takata recalls, and develop and implement a plan for applying those lessons to help manufacturers improve completion rates of other recalls. NHTSA partially concurred with this recommendation, agreeing to implement the provision as written, but asserting that it had already documented lessons learned from the Takata recalls in its November 2017 Independent Monitor Report, and that it applies this knowledge to improve completion rates for other recalls.
Finding the agency responsive to the six recommendations, OIG concluded its report by reiterating NHTSA’s need for a system of strong management controls with procedures designed to ensure compliance with the federal laws and regulations governing vehicle recalls. According to OIG, the current lack of internal accountability and risk-based oversight inhibits the agency’s ability to achieve its mission of saving lives, preventing injuries, and reducing economic losses resulting from motor vehicle crashes.
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