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Corporate governance

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​​Our corporate governance framework assists agency staff to plan and manage activities and deliver on the expectations of government and the community. The framework articulates the lines of authority, accountability, direction and control within our agency. It is designed to ensure our staff understand their accountabilities and our agency delivers outcomes in a controlled, transparent and accountable manner, in line with relevant legislation and government policy.

Governance processes

Our governance processes and policies include:

  • risk management
  • protective security management
  • business planning
  • financial management
  • performance and conformance monitoring and reporting
  • staff performance agreements
  • internal auditing
  • fraud prevention, and
  • Chief Executive Directions and Instructions.

Our governance framework supports our agency culture which promotes and upholds the Australian Public Service Values and Code of Conduct and enables us to monitor and improve our performance.

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Governance structure

Our committee structure supports our agency’s governance and provides leadership and oversight of agency operations and performance. Information about these committees is at Appendix F.

Figure 4: Our committee structure as at 30 June 2017
Figure 4: Our committee structure as at 30 June 2017
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Business planning and reporting

Our business planning considers the allocation of human resources, investment, risk management and performance measurement and incorporates our agency’s performance reporting framework.

The Clean Energy Regulator Corporate Plan 2016–20 is one of several documents that contribute to our business planning. It sets out our purpose, objectives and strategic approach. Updated and published annually, our corporate plan articulates the strategies we use to achieve our objectives and provides a framework for us to measure our performance, in accordance with paragraph 35(1)(a) of the Public Governance, Performance and Accountability Act 2013.

The key performance indicators in our corporate plan are designed to measure achievements against our purpose. They are part of our agency’s key performance indicator framework. We have developed this framework to meet our external and internal reporting requirements, while ensuring the flexibility to incorporate changes in government policy and our operating environment against our core activities as a regulator. Our key performance indicators link our planning and reporting framework at the strategic, operational and individual level as represented in Figure 5.

Figure 5: Planning and performance reporting frameworks
Figure 5: Planning and performance reporting frameworks

As required under section 39 of the Public Governance, Performance and Accountability Act 2013 we report on our performance against the key performance indicators in our corporate plan and the performance criteria in our portfolio budget statements in Section 3: Annual performance statements.

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Risk management

Our approach to risk takes into account the legislative framework, Australian Government policy and our available resources. Our risk appetite reflects the nature of the schemes we administer.

In administering legislation on behalf of the Australian Government, we understand what might undermine our ability to achieve our objectives and meet our statutory obligations. Identifying and managing risks to these objectives at the strategic and operational level enables us to:

  • streamline regulatory processes across and within the schemes we administer
  • target resources towards areas of highest risk
  • achieve organisational efficiencies, and
  • deliver the specific objectives of relevant legislation effectively and efficiently.

We continue to embed and enhance our risk management framework into day-to-day operations, adopting a strong risk management culture where all staff understand how their daily work fits into our agency’s capability to mitigate risk across our full range of functions.

The aim is to maximise return on investment against our purpose, while managing material risks, drawing on agency knowledge and evidence to inform decisions, processes and client engagement.

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Our strategic risks

We have identified the following strategic high level risks to achieving our purpose.

  • Uncertainty impedes us from achieving our purpose.
  • Our role is misunderstood or changes with substantial consequences.
  • We are not an effective regulator.
  • We cannot free resources or lack critical capability to meet core objectives.

We actively manage and review these strategic risks, as well as our operational risks.

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Fraud prevention and control

We take a holistic approach to fraud control to ensure we have robust governance, strong controls, effective risk assessment and management complemented by clear policies and procedures.

Our fraud control plan fosters continued legislative compliance, reflects the overall agency and fraud control structure and provides information on preventing, detecting and responding to internal and scheme related fraud. It also aligns risk management with business planning and agency roles and responsibilities.

We can receive allegations of fraud from internal or external sources by several means. We treat all allegations of fraud seriously and we are committed to maintaining confidentiality and protecting those who provide information concerning alleged fraud. We record and address any alleged, apparent or potential fraud and non-compliance incidents in accordance with the Australian Government Investigations Standards.

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Compliance approach

Our Compliance, Education and Enforcement Policy is designed to optimise voluntary compliance with the schemes we administer.

We recognise that engagement, education and support are critical to ensuring scheme participants meet their obligations and avoid inadvertent non-compliance. We publish various guidance materials and resources to advise our clients of their obligations.

If we do need to address non-compliance, our response is proportionate to the potential or actual harm posed by non compliance, and takes into account the behaviour and motivation of the relevant party.

We publish details of enforcement actions taken when clients do not comply with their obligations, demonstrating to our clients that we will take enforcement action in appropriate circumstances and providing an added incentive for our clients to voluntarily comply.

Where necessary, we pursue civil penalties and criminal prosecutions in more serious cases of deliberate non-compliance.

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Compliance priorities 2017

For the first time, we have published our complete set of 2017 compliance priorities on our website. They identify our focus areas for compliance and approach to regulation as shown in Figure 6.

We target activities in areas of high risk, while also aiming to increase voluntary compliance through early intervention and education. By focusing on high levels of compliance and sharing this information, we increase agency transparency and accountability to clients and the public. The aim is to further increase levels of voluntary compliance and identify areas for improvement.

Figure 6: Focus areas for compliance

Data analytics to detect non-compliance

Emissions Reduction Fund

Integrity of client declarations and ability to meet contractual obligations

Safeguard mechanism

Scrutinise integrity of initial baselines

National Greenhouse and Energy Reporting scheme

Enhance data integrity

Auditor compliance with standards

Small-scale Renewable Energy Scheme

Enhanced monitoring of integrity of claims for small-scale renewable energy certificates

Large-scale Renewable Energy Target

Increased scrutiny of annual acquittal of large-scale generation certificate liability

Increased scrutiny of data provided

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Investigations

During 2016–17 we opened 15 investigations. These investigations were all external and all related to the Renewable Energy Target–seven for fraudulent activity and eight for systems breach/non-compliance.

We closed 37 investigations in 2016–17. As a result of the completed investigations,120 small-scale technology certificates were surrendered. As at 30 June 2017 a total of 17 investigations remained open, compared with 39 investigations underway at the same time last year.

SNAPSHOT

15 investigations opened, 37 closed in 2016–17

Table 8: Investigations closed in 2016–17 by type and scheme
OutcomeRenewable Energy TargetNational Greenhouse and Energy Reporting schemeEmissions Reduction Fund (Carbon Farming Initiative30)Total
No further action required8008
Administrative action (including voluntary surrender of certificates/units, suspension/closure of registry account)5005
Referred to an external agency1001
Referred to an internal team4004
Warning or advisory letter8008
Agreed enforceable undertaking0011
Successful prosecution0000
Merge with existing investigation32100010
Total360137
Table 9: Total investigations in 2016–1733
OutcomeRenewable Energy TargetNational Greenhouse and Energy Reporting schemeEmissions Reduction Fund (Carbon Farming Initiative34)Total
On hand as of 1 July 2016380139
Received 2016–17150015
Closed 2016–17360137
On hand as of 30 June 2017170017
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Audits

The National Greenhouse and Energy Reporting audit framework helps ensure the integrity of data reported to us under this scheme, as well as the Emissions Reduction Fund, safeguard mechanism and Renewable Energy Target.

Audits provide confidence in reported National Greenhouse and Energy Reporting scheme data, and identify factors that helped prioritise report assessment, compliance, intelligence and client education activities. Audits also provide assurance to issue ACCUs under the Emissions Reduction Fund. For more details, see Emissions Reduction Fund. They also award exemption certificates under the Renewable Energy Target scheme. For more details, see Renewable Energy Target.

Figure 7: Audit activities
types of audits, 380 audits completed, 73 voluntary audits from national greenhouse and energy reporting reporters, 14 calculated baseline applications, 141 emissions reduction fund projects, and 85 exemption certificate applications

Of the audits conducted in 2016–17, a total of 88 per cent returned a clean opinion, which indicates the client is compliant with scheme requirements (although they may have a small number of non-material findings) and 10 per cent returned a qualified opinion, which means the client is largely compliant except for a small number of material matters that are not pervasive. The remaining two per cent either returned an adverse finding where there was at least one material issue of significant non-compliance or the auditor was unable to form an opinion.

SNAPSHOT

380 audits completed, 88% returned clean opinion

In 2016–17, for the first time, we commissioned audits by registered greenhouse and energy auditors to examine the compliance of power stations and liable entities participating in the Renewable Energy Target. We previously reviewed compliance of power stations using internal agency resources.

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Registration and compliance of auditors

We register greenhouse and energy auditors and monitor their performance. As at 30 June 2017, there were 116 registered auditors, down from 137 registered at 30 June 2016. This reduction was predominantly due to self-removal and auditors not remaining active–therefore not meeting ongoing registration requirements.

We assessed 65 auditors as part of the routine registration review program during 2016–17. The number of registered auditors remains sufficient to support and provide audits for our schemes and clients.

Compliance by registered auditors is an area of focus for us, given its importance to the integrity of the schemes we administer. In 2016–17, we conducted nine inspections of registered auditors. These inspections provided us with in-depth insights into auditor performance. The inspection program has also assisted us to enhance our own procedures and improve guidance.

Where we identified non-compliance through inspections, we initiated compliance action. This compliance action ranged from specific improvements that auditors need to undertake, through to considering suspension or deregistration. In 2016–17, one auditor was deregistered due to issues with the conduct of their audits (identified during inspection). Two other auditors chose to deregister voluntarily following inspection. We publish decisions to deregister auditors on our website.

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Audit framework enhancements

In response to inspection findings and regulatory decisions, we started a program of enhancements to the audit framework. In June 2017, the Audit Determination and Auditor Registration Instrument were updated to:

  • introduce requirements for auditors to apply auditing and assurance standards
  • require the disclosure of audit and non-audit fees in audit reports
  • increase the qualification requirements for auditors engaged in peer review, and
  • increase the audit experience requirements for people applying to be Category 2 auditors (audit team leaders).

We are examining further potential changes to the National Greenhouse and Energy Reporting regulations in 2017–18.

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Conflict of interest

We inform our staff about their obligations under the Public Service Act 1999, which requires staff to avoid actual, perceived or potential conflicts of interests. Staff and Regulator Members are required to complete an annual declaration of interest form. Compliance with this requirement is reported to the audit committee.

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Business continuity management

During 2016–17 we continued to mature our agency’s business continuity management framework through our training and annual testing program, which assesses our preparedness for a business disruption event. We incorporate necessary improvements to continually build our resilience to a business disruption.

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Internal audit

The Internal Auditor is responsible for the efficient and effective operation of our internal audit function, reporting to the chair through the Chief Operations Officer and the Audit Committee.

During 2016–17 the Audit Committee held quarterly regular meetings and a special meeting to discuss the agency’s financial statements. The Audit Committee endorsed the 2017–18 Strategic Internal Audit Work Program and internal audit reports on performance and compliance issues. It also reviewed our agency’s financial and performance reporting, risk oversight systems and management and internal controls.

Oakton Services Pty Ltd provided internal audit services to our agency during 2016–17 and completed internal audits on:

  • Emissions Reduction Fund automated auction processes
  • Emissions Reduction Fund safeguard baselines–making baseline determinations
  • functional controls project review (including client risk profiling review)
  • risk management
  • information technology security
  • greenhouse and energy auditor inspections
  • compliance with confidentiality requirements, and
  • contractor management.
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Regulatory reform

The Australian Government’s regulatory reform agenda aims to reduce unnecessary or inefficient regulation imposed on individuals, business and community organisations.

As part of the everyday administration of our schemes, we assess the potential burden on clients and implement practical, flexible regulatory approaches that appropriately balance both regulatory and client needs.

Since last year, we have also been required to report annually against the Commonwealth’s Regulator Performance Framework key performance indicators. We published our first annual self-assessment in December 2016, demonstrating achievement against each of our specific measures under the Regulator Performance Framework. We also recognised opportunities to continue to improve our performance as a regulator, such as maximising coordination and consistency in the way we administer our schemes, understanding the impact of our activities on our clients, and maximising the value from the data we collect.

SNAPSHOT

Our first self-assessment of regulatory performance was published in December 2016

We will publish our second annual self-assessment in the last quarter of 2017. Details are on Regulator Performance Framework.

FEATURE ARTICLE

Contact centre recognised in industry sector awards

Our contact centre has been recognised as one of the best in the country, winning the Auscontact Association ACT/NSW Contact Centre award for centres with less than 20 full-time equivalent staff.

The contact centre is the first point of call for clients and others seeking information about our schemes. During 2016–17 staff received 15 342 calls and 2105 emails, and achieved an 82.2 per cent average resolution rate, up from 78 per cent last year. The team also assisted with administration of the Renewable Energy Target, by confirming small-scale solar system installations through 7880 aerial map checks and 11 133 phone audits to ensure the installations had taken place.

While most enquiries (74 per cent) relate to the Renewable Energy Target, contact centre staff need to understand all our schemes as well as have a corporate overview. Our contact centre ensures that they understand scheme priorities, our clients’ needs, and how to provide quality responses.

In providing quality responses, our contact centre helps educate clients, encourage compliance and build confidence in our agency.

Image acknowledgment: Clean Energy Regulator. Clean Energy Regulator staff members, Australian Capital Territory.

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Partnerships

We work closely with our regulatory partners to share information to ensure the integrity of the schemes we administer. We also provide information to assist other Commonwealth, state and territory government organisations to discharge their responsibilities under respective legislation.

A range of formal agreements, lawful disclosure arrangements and staff secondments underpin our partnerships with other agencies. These mechanisms facilitate cooperation and information exchange to assist each agency to fulfil its regulatory responsibilities. This includes sharing relevant information, gathering intelligence and referring matters to the appropriate body, such as Commonwealth, state and territory agencies, including law enforcement if necessary.

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Client survey

We conduct client surveys to understand client perceptions about our overall agency performance, staff performance, regulatory burden and preferred communication channels. This is the third year of our client communications survey, enabling us to compare results.

Table 10: Key client survey findings
Question2014–15 % agree or strongly agree2015–16 % agree or strongly agree2016–17 % agree or strongly agree
The agency is doing a good job808481
Client organisation has an effective working relationship with the agency staff848479
The agency performs functions effectively828280
The agency effectively engages with clients767676
The agency has a clear direction and purpose727576
The agency has a sound focus on important issues687070

Overall, client satisfaction remained relatively steady with past results. Findings highlighted:

  • Strong overall performance. A similar percentage of clients surveyed agree that we are doing a good job, 81 per cent compared with 84 per cent last year. Around 80 per cent believe they have an effective working relationship with us. Strong and steady results in 2016–17 indicate our agency is developing a level of maturity.
  • Areas to sustain. We want to maintain strong results for having clear direction and purpose, and staff performance.
  • Areas to improve. We will work on improving effective relationships with clients, and performing our functions as effectively as possible.

FEATURE ARTICLE

New and improved intranet supports our work

During 2016–17 we redeveloped our agency’s intranet to make it easier and faster for staff to access the information they need to do their jobs.

Known as ‘REGi’, our intranet had grown since the agency began operating in April 2012. As we neared our five-year anniversary, it was time to review and refresh this important staff resource.

The project began with workshops with staff to discuss how people used the intranet, what worked on the current system and what could work better. Feedback from these workshops informed the project’s business requirements, which included an upgraded platform, improved search functionality, a new structure and navigation, updated content, and additional features to make it easier for people to interact with the content.

While the upgraded REGi has a new look, most of the improvements happened behind the scenes. This included a major content review, writing or reviewing more than 400 pages of content and 300 documents, to retain only the most current documents and advice. New inbuilt smart processes include automated prompts to check content accuracy and currency every three months, online forms to make common requests and processes faster and easier, and improved site analytics to track usage and inform continual improvement. We have improved the search functionality, driven by metadata topic tags, to allow staff to more easily find information.

To create a more intuitive structure, we restructured content around common user needs that remain consistent, rather than around organisational structure, which can change. Key content areas now include information related to ‘who we are’, ‘my employment’ and ‘working in the agency’. A new ‘our community’ section focuses on workplace culture, events and staff recognition, and is helping to improve agency culture by creating more of a community atmosphere.

Our new intranet was delivered on time and on budget in June 2017. Initial feedback has been positive, with staff saying it is easier to find information and do their work.

Image acknowledgment: Clean Energy Regulator. REGi interface, Australian Capital Territory.

  1. The Carbon Farming Initiative transferred to the Emissions Reduction Fund during 2014–15.
  2. These matters individually have been found to relate to a broader investigation, which identify numerous persons of interest and victims. Specific cases have been closed, however incorporated into a bigger inquiry.
  3. The carbon pricing mechanism was repealed from 1 July 2014. The carbon pricing mechanism totals have been removed from this table as there are no related referrals.
  4. The Carbon Farming Initiative transferred to the Emissions Reduction Fund during 2014–15.

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