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@GRIAusConf_Mandatory & Voluntary Reporting – emerging trends and managing both - Peter McVay


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@GRIAusConf_Mandatory & Voluntary Reporting – emerging trends and managing both - Peter McVay

  1. 1. Mandatory & VoluntaryReporting – emergingtrends and managing bothChair: Wayne Wescott, Member, GRI Australian Advisory GroupPeter McVay, Audit Manager, Performance Audit, Australian Audit OfficeKate Phillips, Senior Associate, Baker & McKenzieTim Youngberry, First Assistant Secretary, Financial Reporting and CashManagement, Department of Finance and Deregulation
  2. 2. Peter McVay Senior DirectorAustralian National Audit Office 27 March 2012
  3. 3.  National Greenhouse and Energy Reporting Act 2007 came into effect 1 July 2008. Administered by Dept of Climate Change & Energy Efficiency. Aims to introduce a single national reporting framework for data relating to greenhouse gas emissions, and energy production. 2011 - 775 corporations met threshold levels of emissions for registration.
  4. 4.  The 100 corporations with the largest direct greenhouse gas emissions (Scope 1) account for over 90% of total direct emissions reported.
  5. 5.  The objective of the audit was to assess the effectiveness of DCCEE’s implementation and administration of NGERS. The audit examined whether DCCEE had effectively implemented the scheme; managed the integrity, security and quality of scheme data; streamlined reporting arrangements in line with the agreement by governments and monitored industry compliance with the provisions of the NGER Act.
  6. 6.  substantial and complex undertaking. challenging operating environment - CPRS 2010-11, carbon price 2012, emissions trading scheme in 2015. workable scheme - a more accurate measurement of greenhouse gas emissions and energy use compared to previous surveys and programs. a positive relationship with the majority of registered corporations. Over 50% of corporations indicated tangible benefits have been obtained from measuring their GH gases and energy use.
  7. 7. These include: enhancing the integrity of reported greenhouse gas emissions and energy use data; improving data security; better managing compliance with the regulatory requirements; and streamlining reporting obligations as intended by COAG.
  8. 8.  Data integrity critical to the objectives of the NGER Act. Data quality of reports over the first two years of NGERS:  material errors and gaps in the data;  Year 1 (2008-09) more than half of all reports to the department contained minor mistakes and about one per cent had major errors; and  Year 2 (2009-10) the department undertook a more in-depth validation process. Of the 545 reports analysed, 72% contained errors - 17% with serious material errors.  manual spreadsheet problem, poor record keeping, problems with contractors and lack of materiality threshold. Resubmission process and data quality improvement strategy introduced by DCCEE to fix problems.
  9. 9.  Strict provisions in the legislation to protect data security. ANAO used IT consultant and conducted a penetration test. 40 technical recommendations to DCCEE. 8 recommendations classified as high priority. Recommendations being implemented by DCCEE. Security concerns related to matters such as:  formalising the security patch management process;  hardening the protection of the servers running online reporting;  limiting administrator access and privileges within the online reporting environment; and  ensuring that there is an adequate security around the network of private service providers with administrator access.
  10. 10.  Streamlining Protocol signed by Prime Minister and Premiers in July 2009. designed to reinforce objective of NGER Act to reduce duplication and create a single national reporting framework (e.g. 15 reports to reduce to one). No progress with most state governments after two years; (Only QLD, NT & ACT have agreed; up to 10 reports still required). Tensions over:  potential conflicts in Commonwealth and state legislation;  controls over the release of sensitive, commercial-in-confidence information;  limited warranties over the quality of data; and  costs involved for state agencies in meeting Commonwealth confidentiality and disclosure standards.
  11. 11.  Implementation of compliance and audit slower than planned and constrained by limited resources. DCCEE have been effective in achieving compliance with registration requirements and in achieving a high rate of reporting. 2006 cost of compliance estimated at up to $10,000. 2011 - for most corporations capital costs were from $5000 and recurrent costs from $1500. The top 100 corporations (in terms of emissions) reported capital costs of up to $3 million and recurrent costs up to $1.5 million.
  12. 12. Three recommendations were made to: reduce the compliance costs for industry - consider an appropriate materiality threshold(s) for reporting by registered corporations. address NGERS data sharing and access issues through a forum of relevant stakeholders and complete outstanding memoranda of understanding with data users. meet the objectives of Streamlining Protocol by involving relevant state/territory jurisdictions in progressing the agreed objective; and consulting with industry representatives to implement streamlining initiatives and to identify further streamlining opportunities. All recommendations were agreed by DCCEE.
  13. 13.  Streamlining and integration; Commonwealth/State cooperation; Data integrity and assurance; Focus on material matters; Managing costs of compliance; Recognising tangible benefits from measuring energy use and production; and GRI as the basis for greater consistency in reporting globally?