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NGER Audit Framework 2014-15
Gavin Mongan, Scheme Audit and Assurance
2015 Auditor workshops
231 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 2014-15
Where are we now
(and where are we going)
4
Maturing NGER framework
31 March 2015
2010 – 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 2014-15
Major achievements 2014
531 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 2014-15
Audit reports assessed
631 March 2015
2011 2012 2013 2014 20150
20
40
60
80
100
120
140
160
180
Carbon Farming InitiativeJobs and Competitiveness ProgramLiable Entity Report Audit ReportPartial Exemption Certificates74Voluntary Audit
NGER Audit Program 2014-15
2013 vs 2014Audits in 2013
593 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 2014
675 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 2014-15
Audits received in 2014
831 March 2015
Carbon Farming
JCP
Liable Entity
PEC
s74 NGER
Voluntary NGER
0 40 80 120 160 200
Clean
Qualified
Unable to form an opinion
Adverse
Verificaiton
NGER Audit Program 2014-15
NGER Audit Programme
2013/14 NGER Audit Programme
10
• 48 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 2014-15
Audits of liable entities
Liable Entity Audits
12
0
4,000,000
8,000,000
12,000,000
16,000,000
20,000,000
24,000,000
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
Liable entity audits
Proportion of emissions
No auditVoluntaryaudits
Mandatory audits
31 March 2015NGER Audit Program 2014-15
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.
1431 March 2015NGER Audit Program 2014-15
Number of CFI projects vs abatement
Projects
Abatement
15NGER Audit Framework 2014-15 31 March 2015
Landfill methaneReforestation
and Afforesta-tion (including native forest protection)
Savanna Burning
Piggeries
Audit firms participation in CFI
The top 5 audit firms by number of projects audited assessed over 70% of projects from 50% of proponents.
16
0
20
40
60
80
100
120
140
160
180
200
Project proponents Projects
NGER Audit Program 2014-15 31 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)
• 18
RGEA CAT 2
RGEA CAT 3
Company Registered Only
31 March 2015NGER Audit Program 2014-15
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 2015
Cat 151%
Cat 239%
Cat 310%
NGER Audit Program 2014-15
Auditor review
2131 March 2015
137 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 2014-15
Auditor review• Auditor management activities
• Annual reporting
• Notifications
• Outreach and surveillance
2231 March 2015NGER Audit Program 2014-15
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.
2431 March 2015NGER Audit Program 2014-15
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.
2531 March 2015NGER Audit Program 2014-15
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.
2731 March 2015NGER Audit Program 2014-15
Key messages
Maintaining the integrity
• Of the schemes
• Of the audit framework
• Of yourselves
2831 March 2015NGER Audit Program 2014-15
