Audit and the Emissions Reduction Fund Julie Cammell, Scheme
Audit and Assurance
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Audit and the Emissions Reduction Fund the context
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Audit a risk-based approach 3 Reduce complexity & cost
Reduce complexity & cost Streamline audit requirements Uphold
integrity of ACCUs Reduce risk of under- delivery Reduce incidence
of fraud Increase transparency Audits and the Emissions Reduction
Fund31 March 2015
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Scheduled audits Large > 150 000 t CO 2 e Large > 150 000
t CO 2 e Medium 50 000 150 000t CO 2 e Medium 50 000 150 000t CO 2
e Small < 50 000 t CO 2 e Small < 50 000 t CO 2 e Initial
audit Subsequent audits 1 initial 5 subsequent audits 3 subsequent
audits 2 subsequent audits Project scale Average abatement volume
p.a. 1 initial 4Audits and the Emissions Reduction Fund31 March
2015
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Unscheduled additional audits A single offset report >100kt
CO 2 e Subsequent audit required with report 5Audits and the
Emissions Reduction Fund31 March 2015
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Unscheduled additional audits Initial or subsequent audit with
qualified assurance opinion Subsequent audit may be required for
next reporting period Variance with similar projects Subsequent
audit may be required for next reporting period Regulator initiated
audits Compliance or other audit conduced under s214 and 215 of the
CFI Act 6Audits and the Emissions Reduction Fund31 March 2015
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7Audits and the Emissions Reduction Fund31 March 2015
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8 Carbon Farming Initiative (CFI) transition Audits and the
Emissions Reduction Fund31 March 2015
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Regulations to a rule Carbon Credits (Carbon Farming
Initiative) Rule 2015
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10 CFI ActCFI RegulationsCFI Rules Method Determinations Audit
Threshold Instrument NGER Audit Determination Audits and the
Emissions Reduction Fund31 March 2015
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Audit: CFI vs ERF 11 CFIERF ScopeFull project complianceInitial
audits full project compliance Subsequent audits offset report
accuracy TypeReasonable assurance FrequencyWith every project
reportMinimum of three audits over crediting period Who can conduct
audits Category 2 or 3 auditors Audits and the Emissions Reduction
Fund31 March 2015
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The Clean Energy Regulator and the Emissions Reduction Fund
audit
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Role of the Clean Energy Regulator 1.Set the audit schedule.
scheduling audits to maximise the number of ACCUs subject to audit
basing on modelled abatement profiles 2.Assess the audit reports.
no changes to this process 3.Undertake Regulator-initiated audits.
no changes to this process Audits and the Emissions Reduction
Fund31 March 201513
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Auditors and the Emissions Reduction Fund
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Role of the auditor 1.Conduct audits 2.Participants advised to
engage their auditors before registration important for auditors to
maintain independence Audits and the Emissions Reduction Fund1531
March 2015
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Initial audit scope (Legislative Rule s74) The audit must be
about whether, in all material respects: the project has been
implemented in accordance with: >the section 27 declaration;
>the methodology determination; and >the Act, and the offsets
reports prepared in accordance with section 76 of the Act. The
audit must cover the longest of the following periods: the first
reporting period for the project; and the first 6 months of the
project. 16Audits and the Emissions Reduction Fund31 March
2015
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Subsequent audit scope (Legislative Rule s76) 17 The audit must
be about whether, in all material respects: the offsets reports
prepared in accordance with s76 of the Act; whether the project
continue to meets all requirements following any change to a
projects: >compliance with project eligibility requirements;
>monitoring requirements; or >a change relating to the scope
or location of the project. if a change in the way the project is
being operated that is likely to result in the section 27
declaration for the project being revoked, whether the reasons the
declaration was likely to be revoked have been rectified. The
subsequent audit may also be required to address other matters if
requested in writing by the Regulator : Audits and the Emissions
Reduction Fund31 March 2015
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Legal right when required 18 You are the site/asset owner You
are the site/asset lessee You are a service provider Declaration of
legal right to undertake the project Consent from site/asset owner
to undertake the project Consent from relevant rights holders to
undertake the project Declaration of intention to gain consents
(where not available at eligibility) Audits and the Emissions
Reduction Fund31 March 2015
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19Audits and the Emissions Reduction Fund Legal right and
audits 31 March 2015
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Legal right what is required A clear statement form a relevant
stakeholder that the participant is able to carry out the project
for the length of the crediting period. A clear statement from the
relevant stakeholder that the participant is able to obtain
financial benefit from the project including through the ERF for
the length of the crediting period. A brief description of the
activities being undertaken as part of the project. 20Audits and
the Emissions Reduction Fund31 March 2015
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In summary Audit schedules have been introduced. Audit
requirements have changed. Audit is a principle control of the ERF
process. Important to understand the legislative rule, handbook and
templates. 21Audits and the Emissions Reduction Fund31 March
2015