NGER Audit Framework Gavin Mongan, Scheme Audit and Assurance

2015 Auditor workshops 2 31 March 2015 Key themes integrity control consistency These themes will be recurring throughout the day. Pay attention. You will be quizzed at the end. NGER Audit Program

Where are we now (and where are we going)

4 Maturing NGER framework 31 March – Auditor Registration 2011 – Pilot NGER Audits 2012 – PEC, JCP, CFI Audits 2013 – Liable Entity Audits 2014 – Auditor Review & Inspection 2015 – ERF Audits NGER Audit Program

Major achievements March 2015 Final Liable Entity audits completed. Completed pilot auditor desktop inspection programme. Received and assessed our 1500th audit under the Framework. 560 NGER 680 CPM (including JCP) 270 CFI Established new Greenhouse and Energy Audit Service Panel. NGER Audit Program

Audit reports assessed 631 March 2015NGER Audit Program

2013 vs 2014 Audits in audits across all schemes Over half were carbon tax related including liable entity, JCP and audit programme. 94% clean Highest proportion of clean were PEC and Voluntary audits. Lowest proportion were CFI. Audits in audits across all schemes Increase due to higher number of CFI audits (75 in 2013 vs 170 in 2014) Offset by lower number of JCP and PEC. 95% clean Improvements in CFI as the scheme matures 731 March 2015NGER Audit Program

Audits received in March 2015NGER Audit Program

NGER Audit Programme

2013/14 NGER Audit Programme audits completed. >22 s19 audits >25 s22A audits >1 s11 operational control audit No incidences of fraud or deliberate non-compliance. 0.1% Quantifiable Scope 1 errors. 12 Audit firms engaged. Main issues identified related to energy production and consumption, incorrect application of NGER determination and record keeping issues. 31 March 2015NGER Audit Program

Audits of liable entities

Liable Entity Audits 1231 March 2015NGER Audit Program

Carbon Farming Initiative

Audits under Carbon Farming Initiative 171 audits received in last 12 months. >270 audits in total 10 Qualified audits from 6 Project Proponents. >60% from landfill projects now corrected 19 audit firms using 16 audit team leaders. a good mix of teams providing excellent value March 2015NGER Audit Program

Number of CFI projects vs abatement Projects Abatement March 2015

Audit firms participation in CFI The top 5 audit firms by number of projects audited assessed over 70% of projects from 50% of proponents. 16NGER Audit Program March 2015

Other audits JCP and PEC

Audits for JCP and PEC 117 audits for JCP and PEC 99% of JCP audits clean 100% of PEC audits clean 75% from Cat 2 or 3 auditors 2014 final year of JCP audits PEC to continue *Registered Greenhouse and Energy Auditor (RGEA) 1831 March 2015NGER Audit Program

Registered greenhouse and energy auditors

Auditor registration 168 active registered greenhouse and energy auditors review programme has resulted in reduction over 2014 greatest decrease in Cat 1 – down 11% over 2014 auditors can be registered in multiple categories 2031 March 2015NGER Audit Program

Auditor review 2131 March reviews initiated to date majority of auditors meeting legislative requirements minor recommendations for some 4 suspensions 7 deregistrations 24 self-initiated suspensions or deregistrations NGER Audit Program

Auditor review Auditor management activities Annual reporting Notifications Outreach and surveillance 2231 March 2015NGER Audit Program

Lessons learned

What has been done well Use of multi-disciplinary teams including subcontracting. Effective use of templates including fitting to existing branding. Communication between firms and the Clean Energy Regulator. Responsive to Clean Energy Regulator feedback. Audit reports were broadly clear and concise March 2015NGER Audit Program

Areas for improvement Inconsistent audit scope and objectives. Failure to reference appropriate legislation correctly. Failure to reference correct standards (ASQC1, ASAEs). Excessive wording undermined confidence in opinion given. Peer reviewer lacked appropriate assurance experience. Knowing limitations and capacity – Resourcing and capability March 2015NGER Audit Program

What’s next?

2015 What’s ahead… 2014/15 NGER Audit Programme. No change to NGER Audit Framework. No more Carbon Liability or JCP audits Update of Audit Determination Handbook. Maturing the Auditor Performance Framework, and The Emissions Reduction Fund March 2015NGER Audit Program

Key messages Maintaining the integrity Of the schemes Of the audit framework Of yourselves 2831 March 2015NGER Audit Program

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