Part 4 - Audits
65. Industry body to commission performance audits
65.1 The industry body must arrange at regular intervals performance audits of the allocation agent and allocation participants.
65.2 The purpose of a performance audit under this rule is to assess in relation to the allocation agent or an allocation participant, as the case may be, –
65.2.1 The performance of the allocation agent or that allocation participant in terms of compliance with these rules; and
65.2.2 The systems and processes of the allocation agent or that allocation participant that have been put in place to enable compliance with these rules.
65.3 The industry body in its sole discretion will determine –
65.3.1 When a performance audit under this rule is to be conducted;
65.3.2 The person who is to be audited;
65.3.3 Subject to rule 68, who will be appointed as the auditor; and
65.3.4 Any terms and conditions for the performance audit.
66. Industry body may commission event audits
66.1 In addition to performance audits under rule 65, the industry body may cause to be conducted at any time an event audit of the allocation agent, allocation participants or allocation processes in respect of one or more gas gates.
66.2 The purpose of an event audit under this rule is to ascertain the cause or causes of any particular issue or event that has arisen in relation to the allocation of gas under these rules.
66.3 The allocation agent or any allocation participant may request the industry body to cause an event audit to be performed under rule 66.1.
66.4 If the industry body receives a request under rule 66.3, the industry body must, in its sole discretion, decide whether to grant or refuse the request. However, the industry body must not grant a request that, in the opinion of the industry body, is frivolous or vexatious or is not made in good faith.
67. Time restriction on audit material
In conducting an audit under rule 65 or 66, the auditor must not consider any action, circumstance, event, or inaction that occurred 30 months or more before the date the audit was requested by the industry body.
68 Who may be appointed as an auditor
68.1 In appointing an auditor, the industry body must appoint a person who is independent to and not in a position of conflict of interest with the allocation agent or the allocation participant(s), as the case may be, that are to be audited.
68.2 No officer or employee of the industry body may be appointed as an auditor.
68.3 The person or persons that are to be the subject of the audit may recommend one or more auditors for the industry body's consideration.
69. Provision of information to auditor
69.1 In conducting an audit under rule 65 or 66, the auditor may:
69.1.1 Request any information from the allocation agent, the industry body and any allocation participant; and
69.1.2 Request to examine any processes, systems and data of the allocation agent and any allocation participant, provided such processes, systems and data are directly relevant to the performance of the allocation agent or the allocation participant in terms of compliance with these rules.
69.2 Any request under rule 69.1 must be reasonable and strictly for the purposes of the audit.
69.3 The allocation agent, the industry body and every allocation participant must comply with a request under rule 69.1 but nothing in this rule limits any claim for legal professional privilege.
69.4 In providing information to the auditor, an allocation participant or the allocation agent may indicate to the auditor where such information is considered to be confidential.
69.5 For the purposes of this Part 4 of the rules, information is confidential if the allocation participant or the allocation agent, who either owns or holds the information, considers that the information is commercially sensitive.
70. Auditor to prepare draft audit report
70.1 The auditor must prepare, in writing, a draft audit report on the conclusions reached and recommendations formulated as a result of conducting an audit under rule 65 or 66.
70.2 Subject to rule 72, the auditor must give a copy of the draft audit report to –
70.2.1 The person or persons that are the subject of the audit;
70.2.2 The allocation agent, if the allocation agent is not the subject of the audit;
70.2.3 Any other allocation participant which the auditor considers has an interest in the report; and
70.2.4 The industry body.
70.3 In providing the draft audit report under rule 70.2, the persons referred to in that rule, and the industry body, have 10 business days from the date the report is received to provide the auditor with comments on the report.
71. Auditor to prepare final audit report
71.1 Before the auditor prepares a final audit report on the conclusions reached and recommendations formulated as a result of conducting an audit under rule 65 or 66, the auditor must take into account any comments received on the draft audit report.
71.2 The final audit report must be in writing and, if so requested by the person or persons that are the subject of the audit, must include as an appendix any comments from that person or persons on the draft audit report.
71.3 Subject to rule 72, the auditor must give a copy of the final audit report to –
71.3.1 The person or persons that are the subject of the audit;
71.3.2 The allocation agent, if the allocation agent is not the subject of the audit;
71.3.3 Any other allocation participant which the auditor considers has a material interest in the report; and
71.3.4 The industry body.
71.4 Once the auditor has given a final audit report under this rule, the report may not be altered in any way.
72. Confidential information in audit reports
72.1 In providing a draft audit report or final audit report, the auditor must provide a complete version to the industry body.
72.2 However, at the discretion of the auditor, the versions of the draft audit report and the final audit report provided to any other person or published under these rules may exclude any confidential information obtained in the conduct of the audit.
73. Publication of final audit reports
Subject to rule 72, the industry body must publish all final audit reports.
74. Use of final audit reports
To avoid doubt, a final audit report may be used –
74.1 For the purposes of the Gas Governance (Compliance) Regulations 2008;
74.2 For the purposes of considering any amendments to these rules;
74.3 By the industry body;
74.3.1 Under rule 51 in considering whether to request the allocation agent to perform a special allocation;
74.3.2 For the purpose of reviewing the performance of the allocation agent under the allocation agent service provider agreement;
74.3.3 For the purpose of reviewing the performance of an auditor; and
74.3.4 For any other purposes that it considers necessary.
75. Responsibility for audit costs
75.1 In relation to an audit under rule 65, the person that is being audited must pay the costs of the auditor.
75.2 In relation to an audit under rule 66, the following provisions apply:
75.2.1 If the auditor concludes that a material issue has been raised in relation to compliance with these rules –
- the allocation agent or the allocation participant to which the material issue relates must pay the costs of the auditor, and if the material issue relates to more than one person, then each person must pay the costs of the auditor in such portions that reflect their contribution to that material issue as determined by the auditor; and
- if the auditor concludes that no material issue has been raised in relation to compliance with these rules, the costs of the auditor must be apportioned between such of the allocation agent and the allocation participants, as the case may be, as the industry body determines in its sole discretion.
75.3 For the purposes of this rule, the costs of the auditor are those costs that have been agreed between the industry body and the auditor.
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