Local Energy CRC audits: the condensed version

If you need an audit, but don’t have time to read all the stuff below, here’s what you need to know.

What do we do?

Local Energy audits your CRC data and evidence pack, including processes and procedures, to make sure you are compliant and to reduce the risk of fines and name-and-shame penalties.

Why do people choose us?

Because we’ve been doing this for local authorities and other public sector organisations longer than anyone else, and we’re good at it because we understand their particular challenges.

Why not just do it yourself?

Practise makes perfect! We’ve seen how and where CRC reporting mistakes are most often made; we’ve also seen – and implemented – solutions to correct and avoid those mistakes.

We can identify improvements quickly and cost-effectively.

CRC compliance audits

The CRC administrator (Environment Agency; Scottish Environment Protection Agency; Chief Inspector, Department of the Environment, Northern Ireland) started the process of auditing CRC participants in October 2011.

The administrator expects to audit 25% of participants each year, mainly selected according to the level of risk, which is assessed according to approximately 20 criteria, plus some selected at random.

Audits will be desk-based initially; participants will be contacted by email and asked to supply specific information. Follow-up tele-conference calls will be used for clarification purposes and, if any unresolved issues remain, a site visit may be made.

There are two possible outcomes:

  • Pass
  • Further action required

Many audits are expected to result in a requirement for further action; this is not a bad outcome, as recommendations for improvement will help participants to manage their CRC compliance better in future. However, where the required actions are not completed within the appropriate timescale, enforcement action may follow.

Enforcement action may include enforcement notices, financial penalties and/or ‘name and shame’.

Why do you need a Local Energy audit?

The CRC regulations require that participants carry out annual audits. The completion of an audit must be evidenced in writing (“an audit certificate”), and the certificate must be signed by the person who exercises management control in respect of the participant’s activities (for example, the senior officer) and kept with its records.

To satisfy these requirements, a CRC participant may choose to commission an in-house internal audit, or to appoint an external auditor.

When using in-house auditors, it is important to ensure that the auditors have not been involved in CRC data collation, management and reporting. They must, however, have suitable skills to carry out the audit, including a good understanding of the requirements of the scheme, as many CRC definitions differ from those routinely used in financial accounting.

If appointing external auditors, it is also important to ensure that they understand the participant’s specific CRC issues, such as street lighting or schools, and that they have extensive knowledge of the regulations as they apply to public sector bodies.

Local Energy has worked with more than 150 public sector bodies on the CRC since 2008 and has undertaken a number of audits since the scheme came into force.

What is included in the Local Energy audit?

The audit follows a similar procedure to a compliance audit.

The first step is undertaken remotely (desktop audit); the auditee sends requested documentation to Local Energy usually comprised of, but not limited to:

  • Registration data
  • Annual report
  • Footprint report
  • Evidence pack summary
  • CRC manual (CRC management procedures)

The desktop audit takes up to a day and is mainly focused on:

1) Accuracy of data

2) Robustness of procedures and processes

3) Clarity and transparency of documented evidence

At this stage, further information may be requested and a list of questions may be drawn up for use during the site visit.

Dates will be agreed for the site visit; this will usually take 2-3 days. The onsite audit will involve a much more thorough check of the evidence pack and audit trails. This will include:

  • Energy data (including collated data; by site; by invoice)
  • Internal processes and procedures
  • Supporting evidence including special events and correspondence records
  • Structure and transparency of the evidence pack
  • Estimation techniques used including justification
  • Any previous audit(s) and evidence of regular data checks including appropriate sign off from those responsible and accountable

It is important that the relevant personnel are available during the site visit to answer questions about the evidence supplied and to locate any additional documentation requested.

Finally, Local Energy will supply a written audit report, including recommendations with specific actions and completion dates. This can be signed off by the senior officer on completion and can be used to demonstrate CRC compliance.

What does a Local Energy audit cost?

A full audit usually takes 4-5 days (2-3 days on site) and is priced at £3,000 +VAT.

NOTE: If you need an audit of your annual report data prior to report submission, please contact us ASAP to reserve an auditor. Dates in May-July are very popular! 

To book an audit please contact either Karen Lawrence karen.lawrence@lgiu.org.uk or Peter Chasmer peter.chasmer@lgiu.org.uk or call us on 020 7554 2800 / 07825 745622.