Notice To All Intending Tenderers - ipart.nsw.gov.au...Notice To All Intending Tenderers ... Tender...

2008 Operational Audits of Sydney Water, Hunter Water, SCA and State Water

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Notice To All Intending Tenderers This Notice To All Intending Tenderers must be read in conjunction with the Request for Tender ("RFT") for 2007-2008 Operational Audits of Sydney Water Corporation, Hunter Water Corporation, Sydney Catchment Authority and State Water Corporation.

Details of the services the Tribunal requires, the timing and terms and conditions of the RFT are set out in that document.

The RFT is a legally binding document that sets out the conditions you must understand if you are to submit a tender in response to the RFT. These conditions will apply regardless of whether you are the successful tenderer. Your participation in any stage of the tender will be at your own risk, cost and expense.

Please read the RFT carefully. If you have any queries, or requests for further information please contact the person named in item 3 of Schedule 1 of the RFT.

Schedule 3 of the RFT sets out the procedures you are to follow and the format and substance you must consider when preparing your tender. The assessment criteria the Tribunal will apply to evaluate your tender are set out in Schedule 3.

The Tribunal may make changes to the RFT before the closing date for tenders and it will be assumed you have tendered on the basis of the RFT as at the date of the close of tenders. You have the choice of either:

(a) keeping your own watch on the Tribunal’s web site to keep yourself informed of any changes the Tribunal may make to the RFT; or

(b) providing an email address to the person named at item 3, Schedule 1 of the RFT who will let you know if the Tribunal makes any changes to the RFT or if the Tribunal will hold a formal briefing for tenderers.

Note clause 5 of the RFT which describes the copies of your tender to be provided to the Tribunal. The opening of tenders is not a public process.

The form of the Consultancy Agreement is set out in Schedule 4 of the RFT and may be changed by the Tribunal at its absolute discretion prior to the tenderer and the Tribunal executing a form of the Consultancy Agreement.

The selection of the successful tenderer is at the Tribunal's absolute discretion and the Tribunal reserves the right not to accept any tender.

We look forward to receiving your tender.

Yours sincerely,

General Manager, Support Services

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Some Background on the Regulatory Environment of the Water Utilities and the Request for Tender

The utilities Sydney Water Corporation (Sydney Water) is a State Owned Corporation that provides water, sewerage and some stormwater drainage services to about 4 million people within Sydney, Blue Mountains and Illawarra regions. Hunter Water Corporation (Hunter Water) is also a State Owned Corporation that provides water, sewerage and some stormwater drainage services to almost 500,000 consumers within the localities of Newcastle, Lake Macquarie, Maitland, Cessnock and Port Stephens.

The Sydney Catchment Authority (SCA) was established to manage water supply and protect catchments, supply bulk water and regulate activities within the catchments to improve water quality, protect public health and protect the environment. It has primary responsibility for Sydney’s bulk water supply, which is drawn from the catchments of four major river systems – the Warragamba, Upper Nepean, Woronora and Shoalhaven.

State Water is NSW’s rural bulk water delivery corporation, annually delivering more than 5,500GL of water to regional NSW on average, along 7,000km of rivers. In accordance with water sharing plans, State Water delivers about 9,000GL of water for the environment. State Water manages and operates 20 dams and more than 280 weirs and regulators to deliver water for town water supplies, industry, irrigation, stock and domestic use, riparian and environmental flows. State Water also manages the Fish River Water Supply scheme which delivers treated water supplies as well as raw water in the Oberon and Lithgow areas to towns and the power industry.

Audits of the Operating Licences The NSW Government has granted Operating Licences to these water utilities in accordance with the relevant enabling legislation (Sydney Water Act 1994, Hunter Water Act 1991, Sydney Water Catchment Management Act 1998, and State Water Corporation Act 2004). A copy of the current Operating Licences can be found at www.sydneywater.com.au, www.hunterwater.com.au, www.statewater.com.au, and www.sca.nsw.gov.au. Licences for these utilities include a requirement that an Operational Audit of the utility’s performance against its obligations under the respective Licence be undertaken. This Request for Tender refers to these audits. For Sydney Water, Hunter Water and the SCA, the audits for 2007-08 will be conducted in accordance with the Tribunal’s risk based approach. The details of the matters to be audited are included in the tender documentation.

It is intended that staff from the Tribunal’s Secretariat will attend all audit meetings. The role of the Secretariat staff at these meetings is to facilitate discussion and manage any difficulties that arise between the auditor and the utility. This arrangement will also allow the Tribunal to be fully informed of the progress of these audits.

The Tribunal’s Secretariat also conducts “Desk-top Reviews” of licence requirements that are not subject to independent audit under the Tribunal’s risk-based audit regime. Under the “Desk-top Review” process, the audited utility provides the Secretariat with a Statement of Compliance for relevant Operating Licence clauses, together with details of relevant outcomes required by the Operating Licence and any required supporting documentation.

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These audits and desk-top reviews are used by the Tribunal as the basis for its reports on the utility’s performance and recommendations to the relevant portfolio Minister. The Department of the Environment and Climate Change, the Department of Energy and Water and NSW Health continue to regulate water utilities’ activities concerning the environment, their use of water resources and public health respectively.

NWI Indicators NSW is a signatory to the National Water Initiative. An obligation under this inter-governmental agreement is that each State collects data on benchmark indicators from certain water utilities. The audits of performance against the Operating Licences for both Sydney Water and Hunter Water will include audits of these NWI indicators. Indicator definitions are available from the Tribunal’s Secretariat. It should be noted that it will not be mandatory for utilities to provide data for all indicators, only those designated as NWI indicators. Audit of other WSAA indicators will be voluntary, including indicators for the Sydney Catchment Authority. The Tribunal will provide the successful tenderer with an Excel spreadsheet template to accommodate NWI data.


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Request for Tender RFT No W01/2008 – W04/2008

Operational Audit of Sydney Water Corporation RFT W01/2008

Operational Audit of Hunter Water Corporation RFT W02/2008

Operational Audit of the Sydney Catchment Authority RFT W03/2008

Operational Audit of the State Water Corporation RFT W04/2008

IMPORTANT NOTE

This Request for Tender refers to four Operational Audits, namely audits of Sydney Water Corporation, Hunter Water Corporation, State Water Corporation and the Sydney Catchment Authority.

Tenderers may wish to be considered for one or more of these audit projects.

Tenderers who wish to be considered for more than one audit need to submit a separate tender for each audit, noting the reference numbers: W01/2008, W02/2008, W03/2008 and W04/2008.

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Table of Contents

1. Introduction 1

2. Application of these Conditions of Tender 1

3. Communications with Tenderers 1

4. Format of Tender 2

5. Lodgement and Opening of Tenders 2

6. Non-Compliance/Late Tenders 3

7. Consultancy Agreement 3

8. Validity and Withdrawal 3

9. Clarification of Tenders 3

10. The Negotiation Stage 4

11. Award of Agreement 4

12. Amendments to RFT 4

13. Tenderers to bear own costs and risk 5

14. Acceptance of Tenders 5

15. No obligation to accept tenders and part tenders 5

16. Access to further information 5

17. Contact of Referees 5

18. Interviews 5

19. Confidentiality and Privacy 6

20. Intellectual property 7

21. Disclaimer 7

22. Other Reservations 8

23. Tenderer’s duty to inform themselves fully 8

24. Briefing for interested persons 8

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25. Supporting material 9

26. Improper assistance in Tender preparation 9

27. Conflict of interest 10

28. Collusive bidding 10

29. Use of documents and information provided 10

30. Freedom of Information 10

31. Assignment 11

32. Whole Agreement 11

33. Relationship 11

34. Warranty to the Tribunal 12

35. Assistance to the Tribunal in regard to enquiries and due diligence 12

36. Electronic document 12

Schedule 1 Services Required 13

Schedule 2 Tenderer Information 19

Schedule 3 Evaluation Requirements 20

Schedule 4 Form of Consultancy Agreement 23

Schedule 5 Audit Scope for Sydney Water Corporation’s Operational Audit in 2007/08 25

Schedule 6 Audit Scope for Hunter Water Corporation’s Operational Audit in 2007/08 29

Schedule 7 Audit scope for Sydney Catchment Authority’s Operational Audit in 2007/08 33

Schedule 8 Audit Scope for State Water Corporation’s Operational Audit in 2007/08 35

Schedule 9 Tribunal Scoring Methodology 37

Schedule 10 Tribunal’s preferred reporting format 39

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1. Introduction (1) The Independent Pricing and Regulatory Tribunal (the "Tribunal") is

a body corporate established under the Independent Pricing and Regulatory Tribunal Act 1992 (NSW) and its role is described on the Tribunal’s web site at http://www.ipart.nsw.gov.au/.

(2) This document, including the Schedules, is a Request for Tender ("RFT") and is an invitation to suitably qualified persons or organisations to tender to provide the Services in Schedule 1.

(3) Anyone who receives a copy of this RFT is referred to in this RFT as a tenderer whether or not they submit a tender in response to this RFT.

(4) The conditions of Tender are set out in this RFT.

(5) Tenderers must complete Schedule 2 and address the requirements of Schedule 3 in submitting their Tender.

(6) Tenders must be lodged with the Tribunal by no later than the closing date set out in Item 2 of Schedule 1(“Closing Date”).

(7) The criteria used by the Tribunal to evaluate tenders are set out in Schedule 3.

2. Application of these Conditions of Tender (1) Tenderers must make themselves familiar with all of the conditions

of this RFT at the Closing Date and are deemed to have tendered on the basis of any changes which may be made to the RFT up to the Closing Date.

(2) Tenderers will be deemed to have accepted all of the conditions of tender in this Request for Tender and must ensure that they comply with them in all respects.

3. Communications with Tenderers (1) Tenderers may be invited to attend a briefing by the Tribunal on this

RFT.

(2) The Tribunal will only provide notices and address correspondence under this RFT to tenderers at the addresses notified in writing to the Tribunal.

(3) The Tribunal will not be responsible for any correspondence or notices not received by any tenderer.

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4. Format of Tender Each tender must be in writing and must comply with the requirements of this RFT.

5. Lodgement and Opening of Tenders (1) Tenderers must submit three hardcopies and one electronic "soft"

copy (in a format compatible with Microsoft Word XP Professional) of its tender. One set of the hardcopy documents must be marked "ORIGINAL" and the other copies must be marked "COPY". The electronic “soft” copy should be sent by email to the General Manager, Support Services at the following email address: [email protected]. If any inconsistency arises between the copies, including the electronic "soft" copy, the hardcopy tender marked "ORIGINAL" will prevail.

(2) The tenders in hardcopy must be submitted in a sealed envelope marked with the RFT reference number so that it is received by the Closing Date.

(3) All documentation must be in the English language and, if relevant, refer to Australian dollars.

(4) All information must be printed without alterations or erasures (unless each amendment is signed in ink).

(5) Tenders must be addressed to:

General Manager, Support Services Independent Pricing and Regulatory Tribunal

and delivered to the following address by no later than the Closing Date: At P O Box Q290

QVB Post Office NSW 1230

Or The Tender Box, Level 8

1 Market Street SYDNEY NSW 2000

(6) Tenders will be secured in the Tender Box at the Tribunal on Level 8 of 1 Market Street, Sydney until after the Closing Date.

(7) The opening of tenders is not a public process and neither tenderers nor their representatives are entitled to attend the opening of tenders.

(8) All tenders must be provided free of charge to the Tribunal.

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6. Non-Compliance/Late Tenders (1) Any tender not complying with this RFT.

(2) Any tender received after the Closing Date will be registered as a late tender.

(3) The Tribunal reserves the right at its absolute discretion to accept or not accept late and/or non-complying tenders.

7. Consultancy Agreement (1) The successful tenderer will enter into a consultancy agreement with

the Tribunal, in the form set out in Schedule 4.

(2) Any consultancy agreement arising from this RFT will be between the Tribunal and the tenderer whose tender is accepted by the Tribunal.

(3) Each tenderer is required to identify in its tender any clauses of the Consultancy Agreement with which it does not agree. The tenderer should propose alternative clauses for consideration by the Tribunal and the rationale for the proposed amendment.

(4) If a tenderer does not indicate disagreement in its tender with a clause of the Consultancy Agreement, that tenderer will be deemed to have agreed with that clause. The tenderer is precluded from raising any objection to, or amendment of, any clauses of the Consultancy Agreement with which the tenderer has not disagreed in its tender.

(5) Any standard printed conditions of contract of, or provided by, the tenderer will be rejected by, and will not be binding on the Tribunal.

(6) The Tribunal reserves the right at its absolute discretion to accept, reject or agree to modifications or amendments proposed by tenderers to the Consultancy Agreement, or any part thereof.

8. Validity and Withdrawal (1) All tenders will remain valid for a period of 6 calendar months from

the Closing Date.

(2) A tender must not be withdrawn without the prior written consent of the Tribunal.

9. Clarification of Tenders The Tribunal may seek clarification or request further information from tenderers after the Closing Date, as part of the selection process.

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10. The Negotiation Stage (1) This clause is subject to clause 22.

(2) The Tribunal may commence negotiations at its absolute discretion with the tenderers whose tenders are acceptable to the Tribunal.

(3) The Tribunal reserves the right to negotiate with any tenderer until a satisfactory conclusion is reached for the Tribunal.

(4) The negotiation by the Tribunal with any tenderer will not create any rights of any kind in favour of any tenderer in relation to, or for the purposes of, any agreement with the Tribunal or at all.

11. Award of Agreement (1) This clause is subject to clause 22.

(2) No rights of any kind accrue to a tenderer whose tender is acceptable to the Tribunal until the tenderer and the Tribunal execute a form of the consultancy agreement in Schedule 4.

12. Amendments to RFT (1) If the Tribunal considers it necessary to make a change to the RFT

before the Closing Date, the amendments will be posted on the web site of the Tribunal and is deemed to be a communication of the change to the RFT to tenderers. No oral explanation or change to any part of this RFT by any officer or agent of the Tribunal will be deemed to constitute an addendum.

(2) The Tribunal may in its absolute discretion, by notice posted on the web site of the Tribunal before the Closing Date, do all or any of the following:

(a) vary or deviate from the processes as set out in this RFT;

(b) terminate or vary the RFT process;

(c) add to, vary or amend this RFT and the conditions in this RFT;

(d) require additional information from any tenderer;

(e) change the structure and timing of the RFT; and

(f) amend the scope of the Services required by the Tribunal in Schedule 1.

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13. Tenderers to bear own costs and risk (1) Participation in any stage of the RFT will be at the tenderer’s sole

risk, cost and expense.

(2) The Tribunal and its advisers, employees and contractors will not be responsible for any loss, damage or claim (whether direct, indirect or consequential) to the tenderer or any person arising out of this RFT, tendering to the RFT, the RFT process, the negotiation with tenderers, or awarding or not awarding of the tender or any other associated matter. In no event will the Tribunal be responsible for any loss of profits.

(3) This clause 13 will survive the conclusion of all processes arising from the RFT.

14. Acceptance of Tenders While the Tribunal may have regard to the requirements set out in Schedules 2 and 3, it retains an absolute discretion as to how it will assess the tenders.

15. No obligation to accept tenders and part tenders • The Tribunal will be under no obligation to accept any tender or part

tender. • The Tribunal will be under no obligation to accept the lowest priced

tender.

16. Access to further information The Tribunal may decide to provide further information concerning this RFT before the Closing Date. If the Tribunal decides to provide further information it will notify all tenderers by notice posted on the web site of the Tribunal.

17. Contact of Referees The Tribunal reserves the right to contact the referees of each tenderer.

18. Interviews The Tribunal reserves the right to conduct interviews of one or more tenderers after the Closing Date. If an interview is required, the Tribunal will give reasonable notice to the tenderer.

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19. Confidentiality and Privacy In this document:

"confidential information" means all information of the Tribunal, in any form or media, including, without limitation, trade secrets, know-how processes, techniques, source and object codes, software, computer records, business and marketing plans and projections, details of agreements and arrangements with third parties, customer information and lists, designs, plans, drawings and models, but does not include:

(1) information which is at the date of this RFT, or which subsequently becomes into the public domain other than as a result of disclosure by a tenderer, or a person receiving the confidential information from the tenderer, in breach of the conditions of this RFT;

(a) information which a tenderer can establish by written records is at the date of this document already known to that person; or

(b) information which a tenderer can establish to the Tribunal's satisfaction, was developed independently of the Tribunal or any agent or employee of the Tribunal.

(2) In consideration of the Tribunal agreeing to disclose confidential information to a tenderer under or as part of this RFT, the tenderer:

(a) acknowledges and agrees that any confidential information is secret and confidential and that any confidential information disclosed by the Tribunal to the tenderer is disclosed to the tenderer only for the purpose of this RFT and in reliance on, and pursuant to, the terms of the conditions of this RFT;

(b) agrees to keep the confidential information secret and confidential at all times;

(c) must not, without the prior written approval of the Tribunal, use, disclose, divulge or deal with any confidential information, nor cause, permit or allow any act, matter or thing to be done, omitted or occur whereby any confidential information may become known or be used by, or be disclosed or communicated to, any other person, except strictly in accordance with the terms of the conditions of this RFT; and

(d) must return to the Tribunal or destroy all copies of the confidential information upon written demand by the Tribunal or upon the withdrawal of the tenderer from the RFT;

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(3) The tenderer acknowledges and agrees that the Tribunal may publish the following details of the Consultancy Agreement, if any, awarded under this RFT:

(a) details of the Consultancy Agreement (including a description of Services to be completed, the term of the Consultancy Agreement, the commencement date and anticipated completion date);

(b) the full identity of the successful tenderer;

(c) the price payable by the Tribunal and the basis for future changes in this price; and

(d) the significant evaluation criteria and the weightings used in this RFT.

(4) If a tenderer includes information in its tender that it does not wish to be disclosed, it must identify that information in writing to the Tribunal and provide written reasons for such request prior to or on the Closing Date. Where the Tribunal does not agree with the tenderer's request the Tribunal will advise the tenderer accordingly and that decision will be binding on the tenderer.

(5) This clause 19 will not merge with the execution of the Consultancy Agreement.

20. Intellectual property (1) Nothing in the RFT constitutes a transfer of intellectual property

rights of the Tribunal (including intellectual property rights in the RFT) to any tenderer.

(2) The Tribunal may, in its absolute discretion, by written notice, require that all written information provided to tenderers (and copies of the information) be returned to the Tribunal at any time.

21. Disclaimer (1) The Tribunal has taken reasonable care in the preparation of the RFT,

however the information contained in this RFT and the information upon which it is based has not been independently verified or audited. Tenderers are encouraged to seek independent verification on any information about which they are unclear.

(2) The statements, opinions, projections, forecast or other information contained in this RFT may change. Where any such information relates to future matters, no steps have been taken to verify that that information is based upon reasonable grounds. Actual future events may vary significantly from the forecast.

(3) Neither this RFT nor any agreement made on the basis of this RFT, may under any circumstances be taken to create an implication that

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there will be no material change in the affairs of the Tribunal from the date of issue of this RFT.

(4) The provisions of this disclaimer apply in relation to this RFT and also in relation to any other oral or written communications or disclosures to the tenderer or to any other person.

22. Other Reservations (1) By issuing this RFT the Tribunal is not required to negotiate or to

enter into an agreement for the provision of the Services for tender with any person.

(2) The Tribunal may elect to withdraw from the process described in the RFT and may terminate the RFT altogether.

(3) The Tribunal has no obligation to consider and no obligation in respect of the manner, timing or basis of consideration of, any tender.

(4) The Tribunal may at its absolute discretion, withdraw, change or suspend the RFT and its consideration of tenders and any part thereof.

(5) Any decision to shortlist tenderers is for the convenience of the Tribunal and does not create any rights in any person. The Tribunal reserves the right at its absolute discretion to invite persons who do not respond to this RFT to participate in any subsequent tender for the Services.

(6) The Tribunal may at its absolute discretion approve or reject any sub-contractors the tenderer may wish to appoint.

23. Tenderer’s duty to inform themselves fully (1) Any person contemplating the submission of a tender and who is in

doubt as to the true meaning of any part of the specification/requirements, requires further information or finds discrepancies in, or omissions from, the RFT may submit a written request for an explanation or correction no later than 14 days before the Closing Date. The Tribunal or its agents will respond to each written request and reserve the right to advise in similar terms all tenderers save that the source of the inquiry will not be disclosed.

(2) In order to maintain equity in the tendering, Tenderers are advised that they should not seek information in regard to this RFT directly from staff and contractors employed by the Tribunal other than via the mechanism detailed in this clause.

(3) Tenderers must only rely on written advice from the Tribunal.

24. Briefing for interested persons (1) The Tribunal may provide a formal briefing for tenderers. Tenderers

attending are required to register at the briefing. The register of

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tenderers will be distributed to all tenderers within 2 working days after the briefing. If a tenderer has a query or requires further information that is not addressed at the briefing, the tenderer must make a request for information in writing and that request will be registered. The request and such answer as the Tribunal is able to provide will be sent to all registered persons who registered at the briefing.

(2) Questions may be submitted in advance of the briefing to be answered at the meeting. The originator of the question will not be disclosed. Advance questions must be submitted in writing seven days prior to the briefing.

25. Supporting material Supporting material is material additional to the tender which elaborates on or clarifies the tender but does not alter it in any material respect. Material presented as supporting material, which effectively alters the formal tender in any material respect, may not be accepted. Supporting material may be provided at the initiative of the tenderer or at the request of the Tribunal. Supporting material must be received by the Tribunal on or before the Closing Date unless specifically requested by the Tribunal subsequent to that date. The Tribunal reserves the right to disregard any unsolicited supporting material dispatched after the Closing Date. Supporting material must be clearly labelled (identifying this RFT and its subject matter). The intention to submit supporting material in this manner must be clearly stated in the tender.

26. Improper assistance in Tender preparation (1) Tenders which have been compiled with improper assistance of

employees of the Tribunal, ex-employees of the Tribunal, and/or contractors or ex-contractors of the Tribunal or that are found to have been compiled utilising information unlawfully obtained from the Tribunal will be excluded from further consideration.

(2) The emphasis above is on improper assistance. It does not preclude tenderers using former Tribunal employees or former contractors of the Tribunal, provided they have not been involved in the development of the RFT. If anyone has any concern regarding the employment of former Tribunal employees or former contractors of the Tribunal, they should raise their concern in writing.

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27. Conflict of interest (1) Tenderers must warrant that to the best of their knowledge at the

date of submitting the tender no conflict of interest exists by itself, by its employees or any sub-contractors or is likely to arise in relation to this RFT during the RFT selection process.

(2) If during the course of the selection process a conflict or potential conflict of interest arises tenderers undertake to notify the Tribunal immediately in writing of that conflict or potential conflict of interest.

(3) Tenderers must not, and must use their best endeavours to ensure that any employee, agent or sub-contractor of the tenderer does not, during the course of the selection process, engage in any activity or obtain any interest likely to conflict with or restrict the tenderer in being considered under this RFT and must immediately disclose to the Tribunal such activity or interest if it occurs.

(4) In this clause 27 a conflict of interest includes, but is not be limited to, an employee of the tenderer being related to or having a close association with or influence over an employee of the Tribunal which may have the effect of influencing, or giving the appearance of influencing, the review of the tenders to the RFT.

28. Collusive bidding Tenderers and their officers, employees, agents, sub-contractors and advisers must not engage in any collusive bidding, anti-competitive conduct or any other similar conduct with any other tenderer, or any other person in relation to the preparation or lodgement of tenders.

29. Use of documents and information provided (1) The Tribunal will have permanent and unrestricted use of all

documents submitted in a tender, subject to any constraints set out in the RFT.

(2) Despite clause 29(1), intellectual property (including confidential information) owned by the tenderer or third parties and contained in the documents will not pass to the Tribunal. However, the Tribunal will be licensed to use or copy that intellectual property to the extent necessary to conduct an efficient selection process.

30. Freedom of Information (1) The Freedom of Information Act 1989 and provisions of the Independent

Pricing and Regulatory Tribunal Act 1992 extend, as far as possible, to the right of the Australian community to access information in documentary form in the possession of the Tribunal, limited only by considerations of the protection of essential public interest and of the private and business affairs of persons in respect of whom

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information is collected and held by departments and public authorities.

(2) Should a request for access to RFT documents be received, the Tribunal will consult with the tenderer before making any decision to grant access, subject to its obligations under the Freedom of Information Act 1989 and the Independent Pricing and Regulatory Tribunal Act 1992.

(3) The Tribunal will not disclose, the following information about any contract awarded under this tender unless the tenderer agrees, or release is determined under the Freedom of Information Act 1989 and the Independent Pricing and Regulatory Tribunal Act 1992 or is otherwise legally required:

(a) the tenderer's financing arrangements;

(b) the tenderer's cost structure and profit margins; and

(c) items of the tenderer having an intellectual property (including confidential information) characteristic but excluding ideas, concepts or know-how pertaining to the subject matter of the RFT.

(4) The information included in an unsuccessful tender is treated as commercial-in-confidence material and will not be disclosed unless the tenderer agrees, or release is determined under the Freedom of Information Act 1989 and the Independent Pricing and Regulatory Tribunal Act 1992 or is otherwise legally required. However the Tribunal may use ideas, concepts or know-how obtained from the tenders in any manner the Tribunal deems appropriate.

31. Assignment This RFT is personal to and not assignable or transferable by the tenderer without the prior written consent of the Tribunal, which consent may be declined at the Tribunal’s absolute discretion.

32. Whole Agreement To the extent of any inconsistency between the conditions of this RFT and: (1) any correspondence or oral exchanges between the tenderer and the

Tribunal; or

(2) any Schedule, appendix or annexure to this RFT,

the conditions of this RFT will prevail.

33. Relationship The relationship between the Tribunal and tenderers is that of independent contractors and no partnership, employment, agency or joint venture may be implied into the relationship.

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34. Warranty to the Tribunal Tenderers who submit a tender to this RFT are deemed to have warranted to the Tribunal that statements, representations and claims made in the tender are true and correct and are not misleading or deceptive or likely to mislead or deceive.

35. Assistance to the Tribunal in regard to enquiries and due diligence By submitting a tender, tenderers acknowledges that the Tribunal may make enquiries of any person to assist in establishing the suitability of the tenderer and to undertake a due diligence review. Tenderers must provide all reasonable assistance to the Tribunal to undertake these tasks.

36. Electronic document The Tribunal may provide an electronic copy of documents and material. While the Tribunal will use its reasonable endeavours to ensure that the electronic copy is "virus free", the Tribunal does not expressly or by implication warrant that the electronic copy will not contain viruses. Tenderers who choose to receive the electronic copy supplied do so entirely at their own risk.

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Schedule 1 Services Required

1. Services

This Request for Tender refers to four Operational Audits, namely audits of Sydney Water Corporation (Sydney Water), Hunter Water Corporation (Hunter Water), the Sydney Catchment Authority (SCA) and State Water Corporation (State Water). The audits of Sydney Water, Hunter Water and the SCA will be undertaken using a risk-based approach (discussed below) covering the period from 1 July 2007 to 30 June 2008. State Water’s current Licence provides for a full Operational Audit every two years covering the period from 1 July 2006 until 30 June 2008.

Tenderers may wish to be considered for one or more of these audit projects. Tenderers who wish to be considered for more than one audit need to submit a separate tender for each audit.

Objectives of Consultancy

The objective of these audits is to assess the performance of the relevant utility against its Operating Licence requirements for the periods outlined above.

Risk-Based Audits

The Operating Licences for Sydney Water, Hunter Water and the SCA provide that audits may be undertaken using a risk-based approach. The Tribunal has decided to employ a risk-based approach to the 2007-2008 Operational Audits of these utilities. Details of the clauses subject to audit are set out for each utility in Schedules 5, 6 and 7 of this Request for Tender. The audit of State Water will not employ a risk-based approach.

Detailed Scope of Work

Operational Audits

In undertaking the operational audits, the auditor must:

a) conduct a detailed examination of those activities of the utility that are regulated by the Operating Licence, subject to the Tribunal’s risk-based audit approach, where applicable;

b) assess the level of compliance achieved by the utility against each of the requirements of the Operating Licence set out in the Tribunal’s risk-based audit procedure, providing detailed supporting evidence for this assessment and reporting compliance according to the Tribunal’s established compliance scoring methodology, set out in Schedule 8;

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c) assess and report on progress by the utility in addressing any comments made by the relevant portfolio Minister pertaining to previous audits, providing supporting evidence for these assessments. This correspondence will be provided to the successful tenderer;

d) for each section of the Operating Licence that is to be audited, identify factors (if any) that have affected the utility’s performance for the audit period (1 July 2007 to 30 June 2008, except State Water, for whom the audit period is 1 July 2006 to 30 June 2008). This includes verifying the calculation of performance indicators associated with relevant requirements of the operating licences and undertaking an assessment of any underlying trends in performance arising from these indicators. Make recommendations to the Tribunal on how the utility can improve its performance in the future, based on the audit assessment;

e) provide a formal briefing to the Tribunal or the Tribunal’s Secretariat comprising an overview of the utility’s overall performance against the requirements of the Operating Licence and the key findings of this assignment; and

f) prepare a full report on the findings of the assignment, including a summary of the utility’s overall performance against the audited obligations of the Operating Licence and detail of its compliance with each audited obligation of the Operating Licence and any requirements of the Minister in Attachment 1. A sample of the Tribunal’s preferred reporting format is provided in Schedule 9.

The auditor will be responsible for assessing and interpreting the audit requirements in the relevant Operating Licence and the Act and ensuring that the audit process satisfies all statutory requirements subject to the detailed audit scope - See Schedules 5, 6 and 7 for Sydney Water, Hunter Water and the SCA. Notwithstanding this, the audit report should reflect the emphasis of the legislation and the Operating Licence on water quality, system performance, environmental and consumer issues. Additionally, the Tribunal has identified some key issues for the 2007/2008 round of utility audits, as set out in the following table.

Utility Issue

Sydney Water Corporation

• Water quality risk analysis • Compliance with Australian Guidelines for Water

Recycling: Managing Health and Environmental Risks (Phase 1)

• Progress of the Choke Management Strategy in relation to sewer overflows.

Hunter Water Corporation

• Integrated Water Resources Plan • Waste Water and Recycling Operations Plan • Customer Information System (CIS)

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Utility Issue

Sydney Catchment Authority (SCA)

• Review of Water Quality Monitoring Program • Implementation of the Regional Environmental Plan • Water Quality trend analysis • Long term water efficiency

State Water Corporation

• Preparation of Water balance data • Provision of information to CSC’s • Strategy and timeframes of State Water’s Environmental

Plan

Under the Operating Licences, the water utilities are required to provide the Tribunal with a range of reports to inform the Operational Audit. This package of information will be provided to each successful tenderer.

The Tribunal will advertise these audit processes and seek submissions from the public. The auditor must take account of any public submissions received and the views of relevant regulators (Department of Environment and Climate Change, NSW Health and the Department of Water and Energy) and other stakeholders including environment, social welfare and public interest groups.

The Tribunal has determined that the Secretariat should undertake some aspects of future operational audits. The successful tenderer will be expected to provide the Secretariat with guidance in audit concepts and procedures. In this regard, tenderers should, in the first instance, allow for approximately half a day meeting by 1-2 key audit staff at Secretariat’s Sydney office. The Secretariat will undertake a desk-top review of matters not subject to audit for Sydney Water, Hunter Water and the SCA as per Schedules 5, 6 and 7 respectively, and will oversee Auditor/Licensee meetings, and may intervene in the successful tenderer’s auditing areas during the course of the audit.

NWI Indicators

The Tribunal will conduct an audit of NWI data concurrently with the Operational Audits of Sydney Water, Hunter Water and the SCA. NWI data and comments need to be entered into the electronic data templates and that these will be provided to the Tribunal by Friday 10 October, 2008.

In undertaking the NWI audit, for any measure not included in the Operational Audit, the auditor must ensure the consistency and comparability of audit results. This will include analysis of documented procedures, information and quality controls, and relevant data. Any changes in systems and documented procedures must be identified.

Compliance will need to be graded according to the NWI compliance scale, which will be provided to the successful tenderer.

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Outputs

The main outputs from each audit are:

1. Two draft reports and a final written report addressing the objectives of the consultancy relevant to the Operating Licence and the Ministerial requirements.

2. Discussions and meetings with the Tribunal and/or the Tribunal Secretariat, and

3. Presentations to the Tribunal and/or the Tribunal Secretariat which outline the major issues and findings relevant to the objectives.

For draft reports, the Tribunal requires one loose-leaf copy and an electronic copy in Microsoft Word format. For the Final Report, the Tribunal requires four bound copies and one loose-leaf copy, as well as an electronic copy in Microsoft Word format. Details of the Tribunal’s preferred format are shown in Schedule 9.

The first draft report must provide details of audit findings and a preliminary compliance assessment for each auditable requirement of the relevant Operating Licence. The second draft report should include final compliance assessments, commentary and relevant summaries.

On completion of the audit, the auditor’s Operating Licence reports, working papers and advice provided to the Tribunal will become the property of the Tribunal. The final audit reports are provided to the relevant portfolio Minister (the Sydney Water audit report and the Sydney Catchment Authority report will be tabled in Parliament). Accordingly, the report should be clearly and logically set out and written in plain English, avoiding the use of unnecessary technical language. The Tribunal will also publicly display and make the report available for downloading on its website.

Audit Process

The audit process for the tenderer is outlined as follows:

1. Meeting with the Tribunal Water Licensing team

2. Inception meeting with water utility

3. Preparation for the audit interviews

4. Interviews with water utility at their offices/facilities

5. First draft report with audit findings and preliminary compliance assessment for each auditable requirement

6. Second draft report including final compliance assessments, commentary and relevant summaries

7. Final report

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Timing

The successful tenderer must be able to meet the following work schedule: Activity Milestone Date

Start Contract 11 August

First Draft Audit Report 26 September

Second Draft Audit Report 17 October

Discussion of Final Draft 31 October

Presentation of Final Report 12 November

Formal progress updates will be required from the consultant on a weekly basis. Formal review meetings will be required following the delivery of each draft audit report (end of September and mid October). Other progress meetings may be required. The detailed consultancy work plan should reflect these progress meetings and the audit process outlined above.

Proposal

The consultancy proposal should demonstrate an appreciation of the task and a description of the intended approach for carrying it out. It should list the personnel to be involved, including resumes detailing relevant experience. A detailed work plan, which includes the allocation of resources to tasks, is also required.

2. Closing date for tenders

Tenders to this RFT must be lodged with the Tribunal by no later than 5:00 pm on Friday1 August 2008 ("Closing Date").

3. Further Information

All enquires in relation to this RFT must specify the RFT Reference and must be directed in writing in hard copy format or facsimile to:

Name Bob Burford

Telephone (02) 9290 8408

Facsimile (02) 9290 2061

Address Level 8 1 Market Street SYDNEY NSW 2000

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Schedule 2 Tenderer Information

Tenderer's Name

Registered Office

ACN or ARBN

Principal Contact Officer's Full Name

Position/Title

Address

Telephone Number(s)

Fax Number

E-mail Address

Names and Contact Details of Two Referees

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Schedule 3 Evaluation Requirements

1. Required Information In order for the Tribunal to adequately assess tenders, tenderers must provide detailed information on the following:

(a) the names, addresses and curriculum vitae, including details and evidence of experience and qualifications, of all personnel, including the tenderer's officers, employees, agents and contractors ("Nominated Personnel"), who the tenderer proposes to involve in providing the Services;

(b) evidence that the tenderer and its Nominated Personnel have the necessary skills and experience to provide the Services and that it will provide the Services with all due care and skill;

(c) sufficient details to enable the Tribunal to determine whether the tenderer is financially viable and will remain financially viable for the anticipated term of the Consultancy Agreement;

(d) any circumstances that may create a conflict of interest for the organisation or individuals who are to provide the Services;

(e) guarantee that the tenderer is legally entitled to: (i) agree to a contract with the Tribunal; and

(ii) complete the Services.

(f) The names, addresses and contact details of referees whom the tenderer agrees may be approached by the Tribunal or its officers.

(g) Any past litigation the tenderer has been involved in.

2. Pricing Information The tenderer must set out clearly the price for the performance of the Services and the basis, if any, for any change in the price. If no price is specified, the charges applicable and the basis for any proposed variations in the charges.

The tenderer must also set out the basis on which the price or charges would be varied for additional services that the tenderer may provide or which the tenderer believes arise from the requirements of complying with the terms of the Consulting Agreement.

Assessment Criteria The Tribunal will evaluate the tenders based upon the Tribunal’s assessment of:

(a) the in-depth understanding and expertise of the tenderer in areas covered by the relevant Operating Licence;

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(b) the extent of the tenderer’s knowledge and understanding of the regulatory environment of, and the business operations undertaken by, the utility proposed to be audited

(c) the provision of Services of a similar nature, including any prior work undertaken for the Tribunal;

(d) the total cost to the Tribunal of the performance of the Services by the tenderer;

(e) the tenderer’s resources and its ability to provide results within the stated timeframe; and

(f) demonstrated ability to enlist the agencies’ cooperation whilst engendering a sense of acceptance of the relevant outcomes

3. Other Information

These Evaluation Requirements are in addition to: (a) the information required in Schedule 2; and

(b) the conditions of the RFT with which the tenderer must comply.

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Schedule 4 Form of Consultancy Agreement


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24

APR 2005 LF 00/23

Consultancy Agreement Between Independent Pricing and Regulatory Tribunal of New South Wales And [Name of Consultant] 2008 Operational Audit of [Name of Utility]

APR 2005 LF 00/23


APR 2005 LF 00/23

Table of Contents

1 Definitions 1 2. Interpretation 2 3 Engagement and Term 3 4 Consultant’s Obligations 3 5 Tribunal’s Obligations 5 6 Fees and Expenses 6 7 Goods and Services Tax 6 8 Fees invoicing 7 9 Variations 8 10 Warranties and Indemnity by the Consultant 8 11 Liability of the Tribunal 9 12 Intellectual Property 10 13 Confidential Information 10 14 Insurance 12 15 Records and audit 12 16 Termination 14 17 Dispute resolution 15 18 Severability 16 19 Discontinuance by Tribunal 16 20 No Assignment 16 21 Entire Agreement 16 22 Notices 16 23 Applicable law 17 Schedule 1 Confidentiality Undertaking 19 Annexure to Confidentiality Undertaking 20 13 Confidential Information 20 Schedule 2 Items 21 Schedule 3 Services 23


APR 2005 LF 00/23


APR 2005 LF 00/23 1

Consultancy Agreement This Agreement is between the Independent Pricing and Regulatory Tribunal of New South Wales, a body corporate established under the Independent Pricing and Regulatory Tribunal Act 1992 and the person defined as the Consultant.

1 Definitions Agreement means this consultancy agreement. Commencement Date means the earlier of:

(1) the date of this Agreement;

(2) the date that the Consultant commences to perform the Services. Completion Date means the date this Agreement ends as set out in Item 5 of Schedule 2. Consultant means the person(s) described in Item 1 of Schedule 2 engaged by the Tribunal to perform the Services and includes officers, employees, agents and sub-contractors (and their employees and agents) utilised by the Consultant, as permitted by this Agreement. Consultant's Personnel means the person(s) described and named in Item 2 of Schedule 2. Consultant’s Proposal means the Consultant’s response to the Request for Tender or Request for Quote, as the case may be, (whether in writing or otherwise) setting out among other things, the Consultant’s interest in performing the Services and the terms on which the Consultant is prepared to perform the Services. Consultant's Representative means the person(s) described and named in Item 3 of Schedule 2. Contract Material means all material brought into existence as part of, or for the purpose of performing the Services, including but not limited to documents, equipment, information and data stored by any means and including Intellectual Property in relation to them. Fee means the fee (inclusive of GST) payable by the Tribunal to the Consultant under clause 6 for the performance of the Services. GST means the same as in the GST Law. GST Law means A New Tax System (Goods and Services Tax) Act 1999 (Commonwealth).


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Intellectual Property includes all rights in copyright, patents, registered and unregistered trademarks, registered designs, know-how, techniques, methods, trade secrets and all other rights of a secret or proprietary nature. Minister means the Minister having responsibility for the Tribunal. Reimbursable expenses means the costs, expenses, fees or charges the Tribunal agrees to reimburse to the Consultant and for which the Consultant obtains the prior written approval of the Tribunal to incur. Services means the services described in Schedule 3. Tax invoice means the same as in the GST Law. Term means the term of this Agreement and is the period described in clause 3(2). Tribunal means the Independent Pricing and Regulatory Tribunal of New South Wales, a body corporate established under the Independent Pricing and Regulatory Tribunal Act 1992. Tribunal’s Materials means any documentation, information or material supplied by the Tribunal to the Consultant in connection with this Agreement by whatever means. Tribunal's Representative means the person described and named in Item 4 of Schedule 2.

2. Interpretation Unless the context otherwise requires:

(1) headings are for convenience only and do not affect the interpretation of this Agreement.

(2) the reference to a statute, or ordinance, code, legislation or law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of them.

(3) a schedule means a schedule to this Agreement.

(4) words importing the singular include the plural and visa versa.

(5) where a word is defined in this Agreement, other grammatical forms of that word have corresponding meanings.

(6) a reference importing a natural person includes a corporation, association, governmental agency, department, Tribunal or body corporate.

(7) the reference to a party means a party to this Agreement.


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(8) a reference to person or a party includes a reference to that persons or that party’s executors, administrators, successes, substitute, substitutes and permitted assigns.

(9) a reference to a law means any applicable law in force in the Commonwealth of Australia, a State or Territory and the common law.

3 Engagement and Term (1) The Tribunal engages the Consultant to perform the Services in

accordance with this Agreement.

(2) This Agreement will commence on the Commencement Date and will terminate on the Completion Date ("Term").

(3) The Tribunal may, by written notice to the Consultant, extend the Term of this Agreement by a period specified in such notice and the Term shall be deemed to have been extended in accordance with the Tribunal’s written notice.

4 Consultant’s Obligations (1) The Consultant agrees to perform the Services under this Agreement

in the manner, to the standard and by the time stipulated in this Agreement, particularly Schedule 3.

(2) If the Consultant fails to perform any of the Services in the manner, to the standard or by the time stipulated in Schedule 3, each failure will be regarded as a breach of this Agreement and the Tribunal may, at its absolute discretion, do any of the following in relation to each failure of the Consultant:

(a) terminate this Agreement by notice in writing to the Consultant;

(b) vary the scope of the Services and Fees under the Agreement without the consent of the Consultant; or

(c) vary the Agreement in writing with the consent of the Consultant.

(3) The Tribunal may exercise its rights to terminate the Agreement under clause 4(2) despite the fact that some of the Services required to be performed have not been performed or if the exercise of the Tribunal’s rights will prevent their performance.

(4) Clause 9 does not apply to a variation under clauses 4(2)(b) or 4(2)(c).

(5) This clause does not purport to limit the grounds on which the Tribunal may otherwise be lawfully entitled to terminate this Agreement.


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(6) The Consultant must use its best endeavours to inform itself and to remain informed of the requirements of the Tribunal in performing the Services under this Agreement.

(7) The Consultant must ensure that only the persons named in Item 2 of Schedule 2 are engaged in the performance of the Services, unless agreed in writing with the Tribunal.

(8) The Consultant accepts all responsibility for the secure guardianship of the Tribunal’s Materials and must put in place all reasonable measures to ensure the security of the Tribunal’s Materials.

(9) The Consultant agrees that personal information collected, held or used for the purpose of performing the Services will be treated in accordance with the Privacy and Person Information Protection Act 1998 (NSW).

(10) The Consultant must not amend or alter the Tribunal’s Materials or the Contract Material without the written consent of the Tribunal.

(11) The Consultant must consult, co-operate and confer with the Tribunal and others as is necessary for the proper performance of this Agreement and as directed by the Tribunal.

(12) The Consultant must obtain, at its cost, all necessary approvals, licences, permits and consents which may be required by law for the provision of the Services.

(13) The person named in Item 3 of Schedule 2 is responsible on behalf of the Consultant for the provision of the Services and is the initial point of contact for the Tribunal with the Consultant. Any substituted representative of the Consultant must have the prior written consent of the Tribunal.

(14) The Consultant must not assign or sub-contract any part of the Services without the prior written consent of the Tribunal which consent may be withheld or given subject to conditions or unconditionally. If the Consultant desires to sub-contract any part of the Services it must provide the following information without which the Tribunal will not give its written consent to any assignment or sub-contracting proposed by the Consultant:

(a) the services to be provided by the sub-contractor and the need for retaining the sub-contractor;

(b) details of the sub-contractor;

(c) the fees proposed to be charged by the sub-contractor; and

(d) any other information the Tribunal may reasonably request.


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(15) The Consultant is engaged as an independent contractor and is not an employee or agent of the Tribunal for any purpose. The Consultant, its employees and agents must not represent that they or the Consultant are employees or agents of the Tribunal. The Consultant must not bind the Tribunal in any respect and has no authority to do so.

(16) The Consultant must ensure the Services and all work done in connection with the Services, complies with all applicable laws, codes of conduct, directions and all relevant standards applicable to the Services.

(17) Upon reasonable notice from the Tribunal the Consultant must provide access to the Consultant to allow the Tribunal to inspect, discuss or assess the provision of the Services.

(18) If a report, paper or other document is required by the Services to be prepared or made available by the Consultant to the Tribunal, the Consultant must, unless otherwise directed by the Tribunal in writing, provide to the Tribunal:

(a) Two bound copies; (b) One unbound copy; and (c) an electronic copy in Word format readable in Word XP.

5 Tribunal’s Obligations (1) The Tribunal will as soon as practicable, or as required by this

Agreement

(a) make available to the Consultant so much of the Tribunal’s Materials required for the performance of the Services; and

(b) liaise and assist the Consultant as reasonably required so that the Consultant may competently perform the Services under this Agreement.

(2) The person named in Item 4 of Schedule 2 or any other person the Tribunal nominates in writing, will act as the Tribunal’s representative in connection with this Agreement and will be the initial point of contact for the Consultant with the Tribunal.


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6 Fees and Expenses (1) In return for providing the Services, the Tribunal will pay the

Consultant the Fee listed in Item 6 of Schedule 2.

(2) The Tribunal may deduct from the Fee (and any associated GST) any amount due from the Consultant to the Tribunal in connection with the provision of the Services.

(3) Payment, in part or in total, of the Fee under this Agreement does not constitute acceptance by the Tribunal of the Services and does not amount to a waiver of any rights either under this Agreement or at law which the Tribunal may otherwise have at any time against the Consultant.

(4) The Tribunal will only reimburse the Consultant for Reimbursable expenses incurred by the Consultant under this Agreement for which the Consultant provides supporting receipts or other documents acceptable to the Tribunal.

7 Goods and Services Tax (1) Words defined in the GST Law have the same meaning in this clause,

unless it is clear that a different meaning is intended. (2) The Consultant is solely responsible for all taxes duties and

government charges imposed or levied in Australia or overseas in connection with the performance of this Agreement.

(3) All Fees and prices are inclusive of Goods and Services Tax (GST) on the Services and any other supplies made under this Agreement to the extent they are taxable supplies within the meaning of the GST Law.

(4) The consultant (and not the Tribunal) is responsible for payment to the Australian Tax Office of any GST collected from the Tribunal in respect of GST.

(5) The Consultant must, within 20 days of request from the Tribunal, issue a tax invoice (or an adjustment note) to the Tribunal for any supply under or in connection with this Agreement.

(6) The Consultant must promptly create an adjustment note for, apply to the Australian Tax Office for a refund, and refund to the Tribunal, any over payment by the Tribunal for GST. The Consultant’s obligation to make a refund to the Tribunal arises as soon as the Consultant has received a refund or credit from the Australian Tax Office for any or all of the overpayment by the Tribunal of GST.


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(7) The Consultant must provide to the Tribunal:

(a) satisfactory evidence that it is registered for the purpose of GST; and

(b) its Australian Business Number.

(8) Until it has provided its Australian Business Number to the Tribunal, the Tribunal is entitled to withhold from any payment made to the Consultant such amounts as are required for the Tribunal to comply with the provisions of the GST Law and related legislation.

(9) If a payment to satisfy a claim or a right to claim in connection with this Agreement (for example a claim for damages for breach of contract) gives rise to a liability to pay GST the payer must also pay and indemnify the payee against the amount of that GST.

(10) If a party to this Agreement has a claim in connection with this Agreement:

(a) for a cost on which that party must pay GST, the party’s claim is for the cost plus all GST (except any GST for which that party is entitled to an input tax credit);

(b) and the amount of the claim depends upon an actual or estimated revenue or lost revenue, revenue must be calculated without including any amount received or receivable as reimbursement for GST(whether that amount is separate or included as part of a larger amount).

8 Fees invoicing (1) The Consultant must lodge with the Tribunal an invoice for the

Services performed (and for approved Reimbursable expenses, if any, incurred) at the times specified in Item 7 of Schedule 2.

(2) The invoice must be in the form of a tax invoice and must specify;

(a) the Fee due to the Consultant and the basis of the calculation;

(b) the amount of GST payable, if any

(c) a description of the Services performed;

(d) appropriate receipts for Reimbursable expenses and an itemisation of the GST paid by the Consultant in respect of each of them; and

(e) any other information that the Tribunal may require or that may be required to comply with the requirements for a tax invoice under the GST Law.


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(3) The Tribunal may require that the Consultant provide clarification or further information regarding the invoice. Subject to this clause the Tribunal will pay the amount of the invoice:

(a) within 28 days of receiving the invoice; or

(b) if clarification or further information is sought under this clause – within 28 days of receiving clarification or the further information from the Consultant.

(4) Subject to this clause, the total consideration payable will be the amount of the invoice less amounts already paid, and amounts the Tribunal is entitled to set off under clauses 6 or 7.

(5) The Tribunal is entitled to withhold payment of an invoice, or part of it, if:

(a) the Consultant fails to clarify or provide further information within 7 days of a request under clause 8(3);

(b) the invoice is not a tax invoice or is otherwise manifestly incorrect ;or

(c) the Consultant has not performed the Services claimed to have been performed in its invoice as required by this Agreement to the reasonable satisfaction of the Tribunal.

9 Variations (1) The parties may vary or amend this Agreement as agreed by them. (2) No variation or amendment to this Agreement is binding on either

party unless and until it is agreed in writing and signed by both the Tribunal and the Consultant.

10 Warranties and Indemnity by the Consultant (1) The Consultant warrants:

(a) it has the capacity to perform the Services;

(b) it will perform the Services in a diligent manner with all due care and skill;

(c) it will perform the Services in accordance with all express or implied representations or warranties made by the Consultant or by law;

(d) it is not aware of any matter that will prevent or restrict its ability to provide the Services;

(e) the Consultant’s Proposal is accurate and not misleading or deceptive; and


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(f) its performance of clause 13 and the performance of every other person who enters into (or who is required to enter into) a confidentiality undertaking under clause 13.

(2) The Consultant represents and warrants that at the Commencement Date no conflict of interest exists in its performance of the Services. If at any time the Consultant becomes aware of a conflict of interest or potential conflict of interest in it performing the Services, the Consultant warrants it will advise the Tribunal in writing of the circumstances of the conflict of interest or potential conflict of interest.

(3) The Consultant agrees to indemnify and keep indemnified the Tribunal, its employees, agents or contractors from and against all actions, claims, costs, expenses and damages (including all legal costs) arising from:

(a) the performance of the Services by or on behalf of the Consultant;

(b) any acts, defaults or negligence of the Consultant, its employees, agents or sub-contractors;

(c) death, injury, loss or damage to the Consultant, its employees, agents, or sub-contractors or the property of any of them; and

(d) any breach of this Agreement by the Consultant its employees, agents or sub-contractors.

(4) The warranties and indemnities in this clause will survive the expiration or termination of this Agreement.

11 Liability of the Tribunal (1) The Tribunal provides no representations or warranties in relation to

this Agreement. The Tribunal excludes all express or implied warranties to the extent permitted by law.

(2) Anything done by the Tribunal or a member of the Tribunal or any person acting under the direction of the Tribunal does not, if the thing was done in good faith for the purpose of performing this Agreement, subject the member or the person so acting personally to any action, liability, claim or demands.

(3) The Tribunal will not be liable to the Consultant for any loss or damage of any kind (including loss of profits of the Consultant) that may arise from any act or omission including a negligent or wilful or reckless act of the Tribunal, its members, employees or agents.


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12 Intellectual Property (1) The Consultant acknowledges the Tribunal is the owner or licensee

of the Tribunal’s Materials and the Consultant must use the Tribunal’s Materials only for the purposes of this Agreement unless it has obtained the prior written approval of the Tribunal to do otherwise.

(2) Subject to clause 12(3), ownership of Intellectual Property in or in relation to the Contract Material vests upon creation in the Tribunal. The Consultant must, at its own cost, do all things necessary to vest ownership and title of the Intellectual Property in the Tribunal.

(3) If ownership of or title in Intellectual Property in relation to Contract Material is not capable of being vested in the Tribunal under clause 12(2) because the Consultant does not own that Intellectual Property, the Consultant must at its own cost use its best endeavours to ensure the owner of the Contract Material grants the Tribunal an irrevocable royalty free licence to use that Contract Material or that Intellectual Property in a manner and for the period as is reasonably required by the Tribunal.

(4) The Consultant must ensure all licence fees and consents required under law are obtained and paid by the Consultant as a result of any reproduction, adaptation or use of any Intellectual Property or Contract Material necessary for the provision of the Services.

(5) Upon completion of the Services or termination of this Agreement, if the Tribunal requests the consultant to do so, the Consultant must deliver to the Tribunal as soon as practicable all Contract Material and the Tribunal’s Materials.

(6) Subject to the Consultant complying with clause 13 in respect of the Contract Material, Clause 12(5) does not operate to prevent the Consultant from keeping a bona fide copy of the Contract Material solely for its internal records.

13 Confidential Information (1) In this clause, “Confidential Information” means:

(a) the Tribunal’s Materials;

(b) the Contract Materials;

(c) any information marked confidential or information which the Tribunal stipulates (in writing or otherwise) is information of a confidential nature or which may reasonably be understood to be of a confidential nature; and

(d) any information in connection with the Services or this Agreement.


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(2) The Consultant agrees it will:

(a) not disclose the Confidential Information other than as permitted by this clause;

(b) not make use of or take advantage of the Confidential Information for any purpose other than for the purpose of performing the Services;

(c) ensure the Confidential Information in its possession is kept confidential and protected against unauthorised use or access;

(d) return to the Tribunal on request from the Tribunal any copies of Confidential Information in the possession of the Consultant or its employees; and

(e) procure the return to the Tribunal on request from the Tribunal of any copies of Confidential Information in the possession of any third party who obtained the Confidential Information from the Consultant or its employees.

(3) The obligation of confidentiality in this clause does not extend to Confidential Information:

(a) already in the public domain, other than as a result of a breach of this Agreement; or

(b) required to be disclosed by law.

(4) Subject to clause 13(5), the Consultant may disclose Confidential Information:

(a) to its employees, solely for the purposes of performing the Services; or

(b) to any other person, solely for the purposes of performing the Services and subject to the Consultant first obtaining the written approval of the Tribunal. The Tribunal may give its approval subject to conditions.

(5) Before making a disclosure of Confidential Information under clause 13(4) the Consultant must first obtain from the person who is to receive the Confidential Information a confidentiality undertaking in the form of Schedule 1 of this Agreement and comply with any other reasonable requirements of the Tribunal.

(6) The Consultant agrees that a breach of this clause by the Consultant, its employees or any other person who obtains Confidential Information from the Consultant may cause the Tribunal irreparable harm and for which damages may not be an adequate remedy. The Consultant agrees to take no exception to the Tribunal seeking such equitable relief as the Tribunal deems appropriate to remedy a breach of this clause in addition to nay legal remedies the Tribunal may seek.


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(7) The obligations of confidentiality in this clause survive the expiration or termination of this Agreement.

14 Insurance (1) The Consultant must hold and maintain a policy of professional

liability and indemnity insurance with a reputable insurer for an amount of $10 million (or if there is an alternative amount specified at Item 8 (a) of Schedule 2 of this Agreement, that amount) in respect of any single occurrence, on terms approved by the Tribunal (which approval will not be unreasonably withheld) for the Term of this Agreement and for a period of 3 months after the Term of this Agreement.

(2) The Consultant must maintain a suitable and adequate workers compensation insurance policy with a reputable insurer, in accordance with any relevant legislation for the Term of this Agreement.

(3) The Consultant must maintain a policy of public liability insurance with a reputable insurer in terms approved by the Tribunal (which approval will not be unreasonably withheld) for the Term of this Agreement and a period of 3 months after the Term of this Agreement.

(4) The public liability insurance policy must be for an amount not less than $10 million (or if there is an alternative amount specified at Item 8 (b) of Schedule 2 of this Agreement, that amount) in respect of any single occurrence on terms approved by the Tribunal (which approval will not be unreasonably withheld) for the Term of this Agreement and for a period of 3 months after the Term of this Agreement.

(5) Prior to commencing the Services, or on request by the Tribunal, the Consultant must provide the Tribunal with certificates of currency of all insurance required to be maintained by the Consultant under this Agreement.

15 Records and audit (1) The Consultant must keep proper accounts, records and timesheets

(including information stored by computer and other devices) in accordance with current Australian accounting principles in respect of Fees, charges, billing, and Reimbursable expenses payable under this Agreement and that data, information and records relating to this Agreement or its performance are maintained in such a form and manner as to facilitate access and inspection under this clause.


APR 2005 LF 00/23 13

(2) Within a reasonable time of any request by the Tribunal, the Consultant must give the Tribunal access to, or provide to the Tribunal verified copies of, any information the Tribunal may reasonably require to allow any Fees, charges, billing or Reimbursable expenses to be substantiated or verified.

(3) For the purposes of this clause 15, the Consultant must grant, and where relevant must ensure that its subcontractors grant, the Tribunal and its nominees access as required by the Tribunal, to the Consultant's premises and data, records, accounts and other financial material or material relevant to the performance of this Agreement.

(4) In the case of documents or records stored on a medium other than in writing, the Consultant must make available on request at no additional cost to the Tribunal such reasonable facilities as may be necessary to enable a legible reproduction to be created.

(5) The Consultant must ensure that any subcontract entered into for the purpose of this Agreement contains an equivalent clause granting the rights specified in this clause 15 with respect to the subcontractor's premises, data, records, accounts, financial material and information of its personnel.

(6) At its absolute discretion the Tribunal may audit:

(a) the accounts, records and timesheets (including information stored by computer and other devices) of the Consultant to satisfy itself that the Fees, charges, billings or Reimbursable expenses paid or payable by the Tribunal to the Consultant have been calculated, incurred or paid by the Consultant in accordance with the provisions of this Agreement;

(b) any other matters reasonably determined by the Tribunal to be relevant to the performance of the Consultant's obligations under this Agreement.

(7) The Consultant must participate promptly and cooperatively in any audits conducted by the Tribunal or its nominee.

(8) Subject to any express provisions in this Agreement to the contrary, each party must bear its own costs associated with any audits.

(9) The requirement for, and participation in, audits does not in any way reduce the Consultant's responsibility to perform its obligations in accordance with this Agreement.

(10) The Tribunal must use reasonable endeavours to ensure that audits do not unreasonably delay or disrupt the Consultant's performance of its obligations under this Agreement in any material respect.

(11) The Consultant must promptly take, at no additional cost to the Tribunal, corrective action to rectify any error, non-compliance or inaccuracy identified in any audit in the way the Consultant has:


APR 2005 LF 00/23 14

(a) provided the Services; or

(b) calculated Fees, charges, Reimbursable expenses or any other amounts, billed to the Tribunal.

(12) This clause 15 survives the termination of this Agreement.

16 Termination (1) The Tribunal may terminate this Agreement immediately by written

notice to the Consultant if the Consultant:

(a) being a partnership, company, trust or other body undergoes a change in its structure which in the reasonable opinion of the Tribunal limits the ability of the Consultant to perform the Services; or

(b) being a company, trust or other body goes into liquidation or a receiver or receiver and manager or voluntary administrator or mortgagee’s or chargee’s agent is appointed to any part of its business or becomes subject to any form of insolvency administration or arrangement, or in the case of an individual becomes bankrupt or enters into a scheme or arrangement with creditors.

(2) The Tribunal may terminate this Agreement immediately by written notice to the Consultant if:

(a) the Minister gives the Tribunal a direction requiring that it terminate the Agreement; or

(b) the Agreement or the Tribunal’s rights and obligations under the Agreement conflict with any statutory duties owed by the Tribunal or is contrary to law.

(3) If the Consultant:

(a) fails to perform any part of the Services as required by this Agreement;

(b) without the consent of the Tribunal suspends the carrying out of the Services; or

(c) breaches any term of this Agreement, regardless of the nature of the term or the extent of the breach;

the Tribunal may send a written notice to the Consultant to remedy the default to the satisfaction of the Tribunal within 14 days (or such longer period as the Tribunal may specify) from the date of service of the notice by the Tribunal on the Consultant specifying the default and the action required by the Tribunal to remedy the default.


APR 2005 LF 00/23 15

(4) If the Consultant does not remedy the default as required by clause 16(3) and within the period specified in the written notice, the Tribunal may terminate this Agreement immediately.

(5) If the Tribunal no longer requires performance of the whole or part of the Services the Tribunal may terminate the performance of the whole or part of the Services at any time by providing the Consultant with written notice of the extent of the termination of the Services and the Tribunal will not be liable for any claim for damages by reason of the termination of the whole or part of the Services.

(6) If the Tribunal:

(a) fails to pay the Fee to the Consultant (other than in the circumstances permitted by this Agreement), or

(b) commits a substantial breach of this Agreement,

the Consultant may send a written notice addressed to the Tribunal to remedy the default to the satisfaction of the Consultant within 14 days (or such longer period as the Tribunal may specify) from the date of service of the notice by the Consultant on the Tribunal specifying the default and the action required by the Consultant to remedy the default.

(7) If the Tribunal does not remedy the default as required by clause 16(6) and within the period specified in the written notice, the Consultant may terminate this Agreement immediately.

(8) The Tribunal will pay the Consultant for the Services performed by the Consultant as at the date of termination but will not otherwise be liable to the Consultant for that termination.

(9) Subject to clause 16(5), termination by either party does not release either party from liability in respect of any breach of, nor non-performance of any obligation under this Agreement. This clause does not purport to limit the grounds on which either party may otherwise be lawfully entitled to terminate this Agreement. Termination of this Agreement by either party is without prejudice to any accrued rights or remedies of each party.

17 Dispute resolution (1) The Consultant and the Tribunal will endeavour to resolve any

dispute speedily by negotiation. If a dispute between the Consultant and the Tribunal is not resolved by negotiation, the parties may agree to (but are not obliged to) submit the dispute to mediation prior to commencing proceedings in a court or tribunal. The parties agree to share equally in the costs of the mediation.

(2) If the parties agree to submit the dispute to mediation, they will co-operate with each other and the mediator (including by providing


APR 2005 LF 00/23 16

documents and information) to ensure the timely and efficient resolution of the dispute.

(3) Each party must continue to perform its obligations under this Agreement, despite the existence of a dispute.

18 Severability If any part of this Agreement is prohibited, void, voidable, illegal or unenforceable, then that part is severed from this Agreement but without affecting the continued operation of the remainder of the Agreement.

19 Discontinuance by Tribunal Subject to any contrary legislative intention:

(a) if any party is reconstituted, renamed or replaced or if its powers or functions are transferred to another entity, this Agreement is deemed to refer to that new entity; and

(b) if any party ceases to exist, this Agreement is deemed to refer to that entity which serves substantially the same purpose or object as the former entity.

20 No Assignment The Consultant must not assign its rights under this Agreement without the consent of the Tribunal. The Tribunal may withhold its consent in its absolute discretion or give its consent unconditionally or subject to such conditions as it may require.

21 Entire Agreement This document and its schedules constitutes the entire agreement between the Tribunal and the Consultant in relation to the Services.

22 Notices (1) The addresses of the parties for purposes of giving any notice is set

out in Item 9 of Schedule 2 or as may from time to time be specified in writing by the parties. All notices or documents to be served or delivered under this Agreement may be served or delivered by delivering them or sending them by pre-paid post, pre-paid courier or by facsimile.

(2) A notice or document will be taken to have been delivered or served as follows:

(a) in the case of delivery in person, when delivered;

(b) in the case of delivery by post, two working days after the date of posting;


APR 2005 LF 00/23 17

(c) in the case of facsimile transmission, on receipt by the sender of a transmission report from the senders facsimile machine showing that the facsimile has been successfully transmitted.

23 Applicable law The Agreement will be subject to and construed in accordance with the laws of New South Wales and the Commonwealth of Australia and the parties submit to the jurisdiction of the courts of New South Wales and the Commonwealth of Australia.


APR 2005 LF 00/23 18


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Schedule 1 Confidentiality Undertaking

1. I have been provided with, and have read clause 13 of the Consultancy Agreement (“Agreement”) between parties described as the “Tribunal” and the “Consultant” and which annexed.

2. I accept as a condition of my employment with the Consultant, or my engagement by the Consultant to assist in the provision of the Services, as the case may be, that I am bound by clause 13 of the Agreement as if I was the Consultant.

3. I acknowledge clause 13 of the Agreement prevents the Consultant from disclosing Confidential Information to any person unless that person first signs a Confidentiality Undertaking.

4. I have been requested by the Consultant to assist the Consultant in connection with the Services and I will require access to the Confidential Information. The Consultant has requested, and I have agreed, to sign this Confidentiality Undertaking.

5. I agree to use the Confidential Information to assist the Consultant in connection with the Services and for no other purpose. I will maintain the confidentiality of the Confidential Information and will not disclose it to any person unless that person has also signed a Confidentiality Undertaking in the form of this document.

6. I will return the Confidential Information immediately upon completion of my employment with the Consultant, my engagement by the Consultant to assist in the provision of the Services or my involvement in the Services (as the case may be), or upon request by the Consultant.

7. I understand that if I breach this Confidentiality Undertaking, I will be liable to the Consultant for that breach and the Consultant will also be liable to the Tribunal for that breach.

8. By signing this Confidentiality Undertaking, I acknowledge the seriousness of the commitments I make and which I now bind myself to perform.

Signed by the person providing ____________________ this undertaking, in the presence Dated of a witness: __________________________ ___________________________________ Signature of witness Signature of person making the undertaking

__________________________ Name of signatory


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Annexure to Confidentiality Undertaking

13 Confidential Information

(1) In this clause, “Confidential Information” means:

(a) the Tribunal’s Materials;

(b) the Contract Materials;

(c) any information marked confidential or information which the Tribunal stipulates (in writing or otherwise) is information of a confidential nature or which may reasonably be understood to be of a confidential nature; and

(d) any information in connection with the Services or this Agreement.

(2) The Consultant agrees it will:

(a) not disclose the Confidential Information other than as permitted by this clause;

(b) not make use of or take advantage of the Confidential Information for any purpose other than for the purpose of performing the Services;

(c) ensure the Confidential Information in its possession is kept confidential and protected against unauthorised use or access;

(d) return to the Tribunal on request from the Tribunal any copies of Confidential Information in the possession of the Consultant or its employees; and

(e) procure the return to the Tribunal on request from the Tribunal of any copies of Confidential Information in the possession of any third party who obtained the Confidential Information from the Consultant or its employees.

(3) The obligation of confidentiality in this clause does not extend to Confidential Information:

(a) already in the public domain, other than as a result of a breach of this Agreement; or

(b) required to be disclosed by law.

(4) Subject to clause 13(5), the Consultant may disclose Confidential Information:

(a) to its employees, solely for the purposes of performing the Services; or

(b) to any other person, solely for the purposes of performing the Services and subject to the Consultant first obtaining the written approval of the Tribunal. The Tribunal may give its approval subject to conditions.

(5) Before making a disclosure of Confidential Information under clause 13(4) the Consultant must first obtain from the person who is to receive the Confidential Information a confidentiality undertaking in the form of Schedule 1 of this Agreement and comply with any other reasonable requirements of the Tribunal.

(6) The Consultant agrees that a breach of this clause by the Consultant, its employees or any other person who obtains Confidential Information from the Consultant may cause the Tribunal irreparable harm and for which damages may not be an adequate remedy. The Consultant agrees to take no exception to the Tribunal seeking such equitable relief as the Tribunal deems appropriate to remedy a breach of this clause in addition to nay legal remedies the Tribunal may seek.

(7) The obligations of confidentiality in this clause survive the expiration or termination of this Agreement.


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Schedule 2 Items

Item 1: Name and address of Consultant Item 2: Consultant’s Personnel Item 3: Consultant’s Representative Item 4: Tribunal’s Representative Item 5: Completion Date

This Agreement ends: (a) on completion of the Services by the Consultant, or

(b) on [specify date] unless extended as provided for in the Agreement,

(the "Completion Date") Item 6: Fee payable to Consultant (including GST)

[Amount payable to Consultant can be specified either in full, in instalments or as an hourly rate. Hourly rates will rarely be used.] For example: The total fee payable to the Consultant is no more than $XXX,000, payable as follows: (a) $ to be paid by the Tribunal in

full on final completion of the Services; or

(b) $ to be paid in monthly instalments on the last day of each month (or at certain milestones of the Services being provided)

(c) The total fee payable to the Consultant is no more than $XXX,000 payable at the rate of $X00 per hour or $X00 per day.


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Item 7: Date(s) for submitting Fee invoices

[If Consultant to be paid regularly or by instalments, set out the dates [milestones] on which the Consultant must forward an invoice to the Tribunal.]

Item 8: Insurance

(a) The agreed amount of professional indemnity insurance per single occurrence under clause 14(1) is $10 million.

(b) The agreed amount of public liability insurance per single occurence under clause 14(4) is $10 million.

Item 9: Notices Tribunal The Chief Executive Officer Independent Pricing and Regulatory Tribunal of New South Wales Level 8 1 Market Street Sydney 2000 Ph: (02) 9290 8484 Fax: (02) 9290 2061 Consultant (Insert details)


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Schedule 3 Services

Services to be performed Date by which Services must be

performed


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Signed as an Agreement. Signed for and on behalf of the Tribunal by a duly authorised person, in the presence of a witness: __________________________ __________________________ Signature of witness Signature __________________________ Name of signatory THE COMMON SEAL of the Consultant was affixed by resolution of its Board of Directors: __________________________ __________________________ Signature of Director Signature of Secretary __________________________ __________________________ Name of Director Name of Secretary OR Signed by the Consultant in the presence of a witness __________________________ __________________________ Signature of witness Signature __________________________ Name of signatory Date of Agreement ________________


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Schedule 5 Audit Scope for Sydney Water Corporation’s Operational Audit in 2007/08

Sydney Water Corporation Operating Licence 2007/08 audit scope

3 Water Quality

Audit (clauses 3.1.1 and 3.1.3)

3.1 Drinking Water Quality – Standards

IPART Desk-top (clause 3.1.2)

3.2 Drinking Water Quality – Monitoring IPART Desk-top

3.3 Drinking Water Quality – Reporting Audit

Audit (clause 3.4.4)

3.4 Drinking Water – Planning

IPART Desk-top

(clauses 3.4.1 to 3.4.3)

3.5 Drinking Water - Incident Management IPART Desk-top

Audit (clause 3.6.1)

3.6 Other Grades of Water

IPART Desk-top (clause 3.6.3)

4 Infrastructure Performance

4.4 Compliance with Performance Standards Audit

4.5 Reporting on system performance standards IPART Desk-top

4.6 Review of system performance standards IPART Desk-top (clause 4.6.4)

4.7 Service quality and system performance indicators

IPART Desk-top

(clauses 4.7.1, 4.7.3 & 4.7.4)

4.11 Water Leakage IPART Desk-top (clauses 4.11.2 & 4.11.3)

4.12 Reports Related to Water Leakage IPART Desk-top

Audit

(clauses 4.13.1 & 4.13.4)

4.13 Response time for water mains breaks

IPART Desk-top

(clauses 4.13.2 & 4.13.3)

4.14 Priority Sewerage IPART Desk-top

(clauses 4.14.1 to 4.14.3)


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5 Customers and Consumers Rights

5.1 Customer contract IPART Desk-top

(clauses 5.1.4, 5.1.8, & 5.1.9)

5.2 Consumers IPART Desk-top

5.3 Code of Practice and Procedure on Debt and Disconnection

IPART Desk-top

5.4 Customer Councils IPART Desk-top

5.5 Customer Service Indicators IPART Desk-top

6 Complaint and Dispute Handling

6.1 Internal Dispute Resolution Process IPART Desk-top

6.2 External Dispute Resolution Scheme IPART Desk-top

6.3 Complaints to other bodies IPART Desk-top

7 Environment – Indicators and Management

7.1 Environmental Indicators IPART Desk-top

7.2 Environmental Management IPART Desk-top

(clauses 7.2.1, 7.2.2, 7.2.4 to 7.2.7)

7.3 Potable Water Use IPART Desk-top

(clause 7.3.4)

8 Pricing

8 Pricing IPART Desk-top

9 Water Conservation and Demand Management

9.1 Water Conservation Target IPART Desk-top

(clauses 9.1.2 & 9.1.3)

9.2 Demand Management Strategy Audit

(clauses 9.2.1 to 9.2.3)

9.3 Reducing Discharges IPART Desk-top

9.4 Water Conservation Rating and Labelling IPART Desk-top


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10 Licence authorisation and Area of operations

10.4 Connection of Services IPART Desk-top

10.5 Non-exclusive Licence IPART Desk-top

11 Liability issues

11.1 Contracting out IPART Desk-top

11.2 Damage and compensation to persons IPART Desk-top

11.3 Competitive neutrality IPART Desk-top

12 Operational Audits of this Licence

12.2.1(b)

Sydney Water’s implementation of any Memorandum of Understanding

IPART Desk-top


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28


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Schedule 6 Audit Scope for Hunter Water Corporation’s Operational Audit in 2007/08

Hunter Water Corporation Operating Licence 2007/08 audit scope

3 Water Quality

3.1 Drinking Water Quality – Planning Audit

3.2 Drinking Water Quality – Standards Audit

3.3 Drinking Water Quality – Monitoring Audit

3.4 Drinking Water Quality – Reporting Audit

3.5 Drinking Water - Incident Management Audit

3.6 Waste Water and Recycling Operations Audit

3.7 Other Grades of Water Audit

(clauses 3.7.1, 3.7.3 to 3.7.5)

3.8 Environmental Water Quality IPART Desk Top

4 Infrastructure Performance

4.4 Compliance with System Performance Standards

Audit

Audit

(clauses 4.5.1 to 4.5.3)

4.5 Reporting on system performance standards

IPART Desk Top

(Clause 4.5.4)

4.6 Review of system performance standards IPART Desk-Top

(clauses 4.6.4 to 4.6.5)

Audit

(clauses 4.7.2 to 4.7.4)

4.7 Service quality and system performance indicators

IPART Desk Top

(clause 4.7.1, 4.7.3, 4.7.5)

4.8 Asset Management Obligation IPART Desk Top

5 Customer and Consumer Rights

5.1 Customer contract IPART Desk-top

(clauses 5.1.4, 5.1.7 to 5.1.9)


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5.2 Consumers IPART Desk-top

5.3 Code of Practice and Procedure on Debt and Disconnection

IPART Desk-top

5.4 Consultative Forum IPART Desk-top

(clauses 5.4.1 to 5.4.7)

5.5 Customer Service Indicators Audit

(clauses 5.5.1, 5.5.2, 5.5.4, 5.5.6)


6.1 Internal Dispute Resolution Process Audit

6.2 External Dispute Resolution Scheme IPART Desk-top

6.3 Complaints to other bodies IPART Desk-top

7 Environment – Indicators and Management

Audit

(clauses 7.1.2, 7.1.4, 7.1.6, 7.1.7)

7.1 Environmental Performance Indicators

Desk Top

(clauses 7.1.1, 7.1.5)

7.2 Environmental Management IPART Desk-top

(clause 7.2.2)

7.3 Catchment Report Audit

8 Pricing

8 Pricing IPART Desk-top

9 Managing Supply and Demand

Audit

(Clauses 9.1.1, 9.1.3)

9.1 Water Conservation Target

IPART Desk Top

(clause 9.1.2)

9.2 Integrated Water Management Plan Audit

(Clauses 9.2.1, 9.2.2)

9.3 Water Supply and Demand Indicators Audit


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Audit

(clause 9.4.1)

9.4 Annual Reporting on Water demand and Supply Indicators

IPART Desk Top

(clause 9.4.2)

11 Liability issues

11.2 Damage and compensation to persons IPART Desk Top

11.3 Competitive neutrality IPART Desk Top

(clause 11.3.1)

12 Operational Audits of this Licence

12.2.1(b)

Hunter Water’s compliance of Memorandum of Understanding Obligations

IPART Desk-top


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Schedule 7 Audit scope for Sydney Catchment Authority’s Operational Audit in 2007/08

Sydney Catchment Authority Operating Licence 2007/08 audit scope

2 SCA’s RESPONSIBILITIES

2.3 Memorandum of Understanding IPART Desk-top

3 BULK RAW WATER QUALITY

3.1 Specific Water Characteristics IPART Desk-top

3.2 Health-Related Water Quality Characteristics IPART Desk-top

3.4 Water Supplied for Water Treatment Audit

3.5 Catchment and System Management Audit

Audit

(clauses 3.6.5, 3.6.7, 3.6.8, 3.6.10, 3.6.11)

3.6 Water quality monitoring and reporting

IPART Desk-top

(clauses 3.6.1 to 3.6.4, 3.6.6)

Audit

(clauses 3.7.3)

3.7 Water Quality Planning - Water Quality Management Framework

IPART Desk-top

(clauses 3.7.1, 3.7.2, 3.7.4, 3.7.6 to 3.7.11)

3.8 Environmental water quality Audit

4 CATCHMENT MANAGEMENT AND PROTECTION

4.1 SCA to Manage and Protect Catchment Areas Audit

(clauses 4.1.2 to 4.1.3)

Audit

(clause 4.2.1)

4.2 Plans of Management - Special Areas

IPART Desk-top

(clause 4.2.2)

Audit (clause 4.3.1) 4.3 Regional Environmental Plan

IPART Desk-top

(clauses 4.3.2, 4.3.3)

4.5 Provision of Information IPART Desk-top


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Sydney Catchment Authority Operating Licence 2007/08 audit scope

5 THE ENVIRONMENT

5.1 Environment Plan IPART Desk-top

(clauses5.1.4 and 5.1.5)

5.2 Catchment and Environmental Performance Indicators IPART Desk-top

6 MANAGEMENT OF CATCHMENT INFRASTRUCTURE WORKS AND WATER CONSERVATION

6.1 Management of Catchment Infrastructure Audit

6.4 Water Conservation Audit

(clause 6.4.1, 6.4.2)

7 ASSESSMENT MANAGEMENT

7.1 Assessment Management Obligation IPART Desk-top

8 CUSTOMERS

8.1 Customer - Sydney Water Corporation IPART Desk-top

8.2 Customers - Other than Sydney Water Corporation IPART Desk-top

8.3 Complaints IPART Desk-top

8.4 Consultation IPART Desk-top

(clauses 8.4.1 & 8.4.2)

9 PRICING

9.1 Sydney Water Corporation IPART Desk-top

9.2 Wingecarribee Shire Council and Shoalhaven City Council

IPART Desk-top

9.3 Complaints IPART Desk-top

11 ANNUAL AUDIT OF THE LICENCE

11.2.1(b) SCA’s compliance with its obligations under each Memorandum of Understanding referred to in clause 2.3;

IPART Desk-top


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Schedule 8 Audit Scope for State Water Corporation’s Operational Audit in 2007/08

State Water Corporation Operating Licence 2007/08 audit scope

2 State Water’s Responsibilities

2.3 Memorandum of Understanding Audit

4 Customers and Community Engagement

4.1 Community Consultative Committee Audit

4.2 Valley Based Customer Service Committees (excluding Fish River Customers)

Audit

4.3 Customer Service Charter (excluding Fish River)

Audit

4.4 Fish River Customer Council Audit

4.5 Customer Contracts (Fish River customers only)

Audit

4.6 Code of Practice on Debt Management Audit


5.1 Internal Complaints Handling Procedure Audit

5.2 External Dispute Resolution Scheme Audit

5.3 Complaints to Other Bodies Audit

6 Asset Management

6.1 Asset Management Obligation Audit

6.2 Reporting on the Asset Management System Audit

6.3 Auditing the Asset Management System Audit

6.4 Augmentation of Water Management Works Audit

7 Water Delivery Operations

7.1 Water Conservation Audit

7.2 Supply Constraints Audit

7.3 Drought Management Plan Audit

7.4 Water Metering Audit

7.5 Water Balances Audit

7.6 Fish River Water Balance and System Yield Audit


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State Water Corporation Operating Licence 2007/08 audit scope

8 The Environment

8.1 Environment Management Plan Audit

9 Performance Indicators

9.1 Performance Indicators – Record systems Audit

9.2 Performance Indicators - Reporting Audit

9.3 Performance Indicators – Provide IPART with physical and electronic access to record systems

Audit

9.4 Performance indicators – Report made available to the public

Audit

10 Pricing

10.1 Price setting methodologies Audit

10.2 Consistency with the COAG Strategic Framework

Audit

10.3 Submission to IPART must reflect applicable usage based component

Audit


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Schedule 9 Tribunal Scoring Methodology

The Tribunal rates compliance with Operating Licence requirements according to the following schedule: Compliance Grade Description detail

Full Compliance All requirements of the condition have been met.

High Compliance Most requirements of the condition have been met with some minor technical failures or breaches.

Moderate Compliance The major requirements of the condition have been met.

Low Compliance Key requirements of the condition have not been met but minor achievements regarding compliance have been demonstrated.

Non Compliance The requirements of the condition have not been met.

Insufficient Information Relevant, suitable or adequate information to make an objective determination regarding compliance was not available to the auditor.

No Requirement The requirement to comply with this condition does not occur within the audit period or there is no requirement for the utility to meet.


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Schedule 10 Tribunal’s preferred reporting format

The Tribunal requires audit reports to be presented in a specific format. A sample of this format is presented in the following pages.

IPART Audit Report Format

Water Utility Operational Audits –Demonstration Report For Information for Prospective Auditors

Operational Audits of NSW Water Utilities May 2008

Water Utility Operational Audits –Demonstration Report IPART iii

Contents

1 Glossary/Definitions 4 Abbreviations 4 Glossary/Definitions 5 Compliance Table Assessment 5

2 Executive Summary 6

3 Introduction 8 Background 8 Operating Licence 9 IPART Scope of Work 9 The Relevant Australian Standard applied 9 Key Findings and Recommendations 10

4 Audit Methodology 11 Draft Audit Plan 11 Inception Meetings 11 Audit Questionnaires 11 Conduct of the Audit 12 Audit Interviews 12 Audit Team 12

5 Audit Findings by Section 14 5.1 Licence Section 3 – Water Conservation and Demand Management 14

6 Concluding Remarks 20

Appendices 21 A Comparison of Compliance 23 B Summary of Stakeholder Consultation 25

4 IPART Water Utility Operational Audits –Demonstration Report

1 Glossary/Definitions

Abbreviations The report should include a short list of abbreviations or acronyms that have been commonly used within the report. An example list of commonly used abbreviations is provided below. This list is by no means exhaustive and should be relevant to the audited Utility.

Acronym Description

ADWG (1996) Australian Drinking Water Guidelines (1996), National Health and Medical Research Council and Agriculture and Resource Management Council

ADWG (2004) Australian Drinking Water Guidelines (2004), National Health and Medical Research Council and Agriculture and Resource Management Council

ANZECC Australia and New Zealand Environment and Conservation Council

ARMCANZ Agriculture and Resource Management Council of Australia and NZ

DEC Department of Environment and Conservation

DNR Department of Natural Resources

EMS Environmental Management System

EPA Environmental Protection Authority

EPI Environmental Performance Indicator

ESD Ecologically Sustainable Development

EWON Energy and Water Ombudsman NSW

IPART Independent Pricing and Regulatory Tribunal (NSW)

ISO International Standards Organisation

KPI Key Performance Indicator

MOD Modified – Modified from ISO 10002:2004, Quality management—Customer satisfaction—Guidelines for complaints handling

MOU Memorandum of Understanding

NATA National Analytical Testing Authority

NHMRC National Health and Medical Research Council

NSW Health NSW Department of Health

SCA Sydney Catchment Authority

WAMC Water Administration Ministerial Corporation

WSAA Water Services Association of Australia

Water Utility Operational Audits –Demonstration Report IPART 5

Glossary/Definitions

A short glossary or list of definitions for terms or phrases used within the report should be included in the report. An example list of these terms is provided below.

GENERAL TERMS AND DEFINITIONS

Term Meaning

Audit period 1 July 2007 to 30 June 2008 for Sydney Water, Hunter Water and the SCA or 1July 2006 – 30June 2008 for State Water.

Bulk Water Water supplied to Utility Z (under the Bulk Water Supply Agreement) and to customers other than Utility Z.

Bulk Water Supply Agreement

The Bulk Water Supply Agreement between the SCA and Utility Z signed on 13 April 2006.

End of Term Review A review of the Operating Licence to be commenced on a date specified in the Licence.

Function Means a power, authority or duty.

Minister The Minister responsible for administering the provisions of the Utility’s Act.

Operating Licence The Licence between 1 July 200X and 30 June 20XX.

Water Management Licence

A Water Management Licence granted under the Water Act, 1912 and issued by the DNR on 26 August 2005.

Compliance Table Assessment

A table of compliance should be included in the report which explains the ratings which will be assigned to a utility in order to grade compliance with each auditable clause. An example is provided below.

Term Meaning

Grading of Compliance The following ratings are used to grade achievement of compliance with a Licence condition.

Full compliance All requirements of the condition have been met.

High compliance Most requirements of the condition have been met with some minor technical failures or breaches.

Moderate compliance The major requirements of the condition have been met.

Low compliance Key requirements of the condition have not been met but minor achievements regarding compliance have been demonstrated.

Non compliance The requirements of the condition have not been met.

Insufficient information Relevant, suitable or adequate information to make an objective determination regarding compliance was not available to the auditor.

No requirement The requirement to comply with this condition does not occur within the audit period or there is no requirement for Utility Z to meet, such as a definition, a requirement placed upon another agency or the requirement was met in an earlier audit period.


2 Executive Summary

The Executive Summary should be no more than one page in length and should draw on the major and overall findings of the audit review. It should be succinct and to the point, with the aim of allowing the reader, at first glance, to identify the major objectives, findings, issues and recommendations of the audit. Outline below is a short example

Utility Z has managed its resources to achieve predominately full compliance with the Operating Licence, although some clauses were assigned a high compliance. Compliance with the auditable Parts of the Operating Licence (shown in brackets below) for the 200X/0X audit period is summarised below.

Water Quality (Part 1)

Utility Z was assigned full compliance with respect to the requirements for the supply of treated drinking water to its customers. The water quality supplied is generally of an excellent standard and complies with the health related requirements of the Australian Drinking Water Guidelines (ADWG) and the aesthetic related requirements of NSW Health and the Minister.

Infrastructure Performance (Part 6)

Utility Z achieved full compliance for most infrastructure performance requirements, such water pressure, water continuity, sewerage overflows, and system performance standards reporting. High compliance was assigned in the calculation and reporting requirements for levels of water leakage. High compliance was also assigned for the achievement of specified response times for breaks and leaks.

Environment – Indicators and Management (Part 9)

Full compliance was assigned for compliance with the environmental management plan and environmental indicators specified in the Licence. In addition Utility Z reported to the Minister on the outcomes and Utility Z plans for future monitoring of environmental performance of its systems.


Water Conservation and Demand Management (Part 3)

Overall, Utility Z demonstrated a high level of commitment to water conservation and demand management, and achieved full Compliance for the demand management components of the Operating Licence.


3 Introduction

The introduction of the report should focus on the background, objective and scope of the audit and also include a website link to any relevant documents, such as, the Operating Licence or relevant standard that has been applied by the auditor.

It is not necessary for the auditor to describe in detail information about IPART, the Utility or its own organisation, in any section of the report. This replicates information that is presented in the tender process and it is not necessary for it to be communicated again. If required IPART can communicate this information in its report to the Minister, to which the auditors report is attached. A sample introduction section is outlined below.

Background

CONSULTANT X Pty Ltd was engaged by the Independent Pricing and Regulatory Tribunal (IPART) to undertake the 200X/0X Operational Audit of Utility Z.

Utility Z is a State Owned Corporation, which is wholly owned by the NSW Government. Its roles and responsibilities include providing water and wastewater services to the City a, Lake City b, Hill City c, and Lakeside areas, and bulk water services to River Town e, parts of the Rural f and Rural g areas. These roles are derived from the Utility Z Act, 199X (the Act) and the Operating Licence issued to Utility Z pursuant to Section X of the Act.

Part X of the Operating Licence provides that IPART (or its appointee) is to undertake an Operational Audit of Utility Z’s performance against the requirements of its Licence each year, and report its findings to the Minister.

IPART commissioned CONSULTANT X Pty Ltd to undertake the 200X/0X Operational Audit of Utility Z covering the period 1 July 200X to 30 June 200X. This will be the nth audit of Utility Z since it commenced operation in XXXX. For the purposes of this audit, compliance has been assessed against in respect of the 200X -20XX Operating Licence for Utility Z.

IPART has identified a number of key issues for consideration arising out of previous audits and the requirements of the 200X-20XX Operating Licence. These key issues include:


Key Issue 1

Key Issue 2

Key Issue 3

Key Issue 4

IPART has adopted a risk based approach to auditing. As a result the Audit for Utility Z will be undertaken in two parts as follows:

Operating Licence requirements requiring detailed assessment and interview of the SCA’s representatives – audited by CONSULTANT X Pty Ltd; and

Operating Licence requirements requiring desktop assessment – reviewed by the IPART Secretariat.

This report addresses the Operating Licence requirements that have been audited by CONSULTANT X Pty Ltd

Operating Licence

The performance of Utility Z was assessed against the requirements of its Operating Licence. A copy of the Licence is available from Utility Z’s website.

http://www.UtilityZ.com.au/files/UZW_Operating_Licence.pdf

IPART Scope of Work

The IPART website has a copy of the Scope of Work:

http://www.ipart.nsw.gov.au

The Relevant Australian Standard applied

To meet the specific requirements of IPART, the operational audit was undertaken adopting a methodology consistent with ISO 14011 “Guidelines for Environmental Auditing”. This guideline provides a systematic approach to defining the requirements of the audit, planning, interpreting Licence conditions, collecting audit evidence, objectively assessing the evidence, and reporting in a clear and accurate manner. It also ensures that the audit has been conducted in accordance with an established and recognised audit protocol.


Key Findings and Recommendations

In general CONSULTANT X Pty Ltd found that Utility Z performed reasonably well against the audited clauses of the Operating Licence. A example of a summary of compliance is presented in Table 3.1. The example is deliberately brief to give the auditor discretion as to how it summaries its findings.

Table 3.1 Summary of Compliance

Section Compliance - Overall Recommendations/Comment

Section 3

Water Conservation and Demand Management

HIGH COMPLIANCE Commendation for world best practice aspects


4 Audit Methodology

The methodology should be quite brief, no more than 1-2 pages, and should briefly outline the approach used by the auditor in conducting the audit. IPART does not consider that this section should be too onerous as the majority of this should be detailed in the audit brief, and will be known to IPART, the Auditor and the Auditee. IPART considers that this section can be expanded in IPART’s report to the Minister if necessary. Similarly, it is not necessary to discuss the risk based methodology as this will be presented in IPART’s report. An example is provided below.

Draft Audit Plan

To ensure that the audit requirements outlined in the Operating Licence and the brief were addressed, the scope of the audit was confirmed with IPART and a draft audit plan prepared.

Inception Meetings

Following the preparation of the draft audit plan, an inception meeting was held with Utility Z’s Managing Director and other representatives on Xx September 200X. IPART representatives also attended the meetings.

The primary objective of this meeting was to develop working relationships, mutual understandings and expectations relating to the requirements and process of the audit, to discuss and agree upon the changes to the audit methodology and to provide an opportunity for Utility Z to present an overview of compliance and progress since the previous audit period.

Audit Questionnaires

Specific audit questionnaires were developed for all requirements within the scope of the audit. These questionnaires were designed to establish substantive compliance with the Licence requirements as well as to identify factors that have, or may have, an impact on performance.


The audit questionnaires also assessed the underlying procedures that Utility Z has in place relevant to the requirements and the application of these procedures by Utility Z. This was designed to verify that the underlying management processes within the organisation are sound and that there is confidence that work is carried out systematically and in accordance with internal procedures.

Audit questionnaires were, in most cases, provided to Utility Z one week prior to the audit interviews to allow Utility Z the opportunity to prepare for the interview and collate the necessary documentary evidence.

Conduct of the Audit

To ensure a positive relationship, audit protocols were established at the inception meeting between the auditor and Utility Z representatives. The protocols were designed to ensure efficient and transparent information transfer and foster an open and professional working relationship between all parties.

Both Utility Z and the auditor generally adhered to the agreed protocols.

Audit Interviews

The specialist auditors conducted interviews during September 200X. The interviews were generally guided, but not limited, by the pre-prepared questionnaires and Utility Z was provided the opportunity to present evidence towards demonstrating compliance with the Licence requirements.

Audit Team

The audit team consisted of specialist auditors. The audit was coordinated by the Project Manager calling on the expertise of the team members for the auditing of key areas as shown below:


Figure 4.1 Audit Team of Audit of Utility Z

Project Manager

Audit Professional

1

Audit Professional

3

Audit Professional

2

Audit Professional

4


5 Audit Findings by Section

This section provides the bulk of the report and is where the auditor presents and discusses their findings from the audit for each auditable section of the Licence. This section should discuss a summary of the Licence requirements, details of compliance, and a discussion section where the auditor’s findings are discussed and analysed.

In addition, consistent with the risk based approach to auditing, the IPART advocates that for each clause that is audited, the auditor should comment on the risk of not complying with that clause to provide a sense of each clause’s significance. This should be noted next to the compliance grade in the table of findings.

A sample of how details of compliance could be recorded for this section is presented below. The significant feature of this section feature of this section is the table that details the compliance of the utility with each audited clause of the Licence. Auditors should abide by the format of this table.

5.1 Licence Section 3 – Water Conservation and Demand Management

5.1.1 Summary of Requirements

Part 3 of the Operating Licence requires Utility Z to comply with specific water conservation and demand management objectives. This is to ensure that Utility Z achieves appropriate water demand reduction targets and implements water re-use to reduce the growth in total demand for potable water from catchment sources managed by the Sydney Catchment Authority (SCA).

For the purpose of the Risk Based Audit, Licence Clauses 3.X, 3.Y and 3.Z are subject to a detailed audit by CONSULTANT X Pty Ltd. The remaining clauses for Part 3 of the Licence were subject to a review by IPART, the assessment of which will not form part of this report.

IPART in consultation with CONSULTANT X Pty Ltd has assessed the risk involved posed by each auditable clause and what constitutes full compliance. CONSULTANT X Pty Ltd will assess the compliance of Utility Z against these guidelines.


5.1.2 Water Conservation and Demand Management – Compliance

Compliance for Part 9, Water Conservation and Demand Management, is outlined in Table 5.1.

Full compliance has been assessed for a number of clauses. Overall, CONSULTANT X Pty Ltd determined that Utility Z exhibited high compliance with the requirements of this section of the Licence.

Overall, compliance with this section of the Licence has improved since last year, where only a moderate compliance was achieved overall for demand management.

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Table 5.1 Compliance Assessment for Section 3 of Licence.

Clause Requirement Risk Compliance Target for Full Compliance

Findings – including addressing the risks and factors affecting compliance

3.2 – Demand Management

3.2.1 Utility Z must give due consideration to demand side management as the basis for planning the future provision of its Services, including addressing Water leakage.

This presents a moderate environmental risk. The risk is generally managed by appropriate metering and metering replacement programmes. Previous audits show high compliance for this clause.

FULL COMPLIANCE

Due consideration given by suitably qualified and experienced officer(s)

Utility Z has given due consideration to demand side management of current and future service provision (including leakage management) as evidenced by it’s Corporate Plan (2006-2011), Sustainability Division Plan, Output/Actions and Responsibilities (2006/07), EMS List of Significant Environmental Impacts 2006, and alignment of these plans with the Metropolitan Water Plan.

The Water Conservation and Recycling Report for 200X/0X demonstrates improving performance against the water conservation target. Some 156 GL of potable water was saved in 200X/0X corresponding to an estimated demand of 654 LCD without restrictions in place compared with 90L saved in 200X/0X, or an estimated demand of 354 LCD without restrictions. The XX% reduction in demand between 200X/0X and 200X/0X demonstrates significant progress towards the 20XX consumption target of 199 LCD (without restrictions) and alleviates potential risks of not meeting the target discussed in the 200X/0X audit report.

Utility Z’s Draft Manual review is to be finalised in December 200X and the manual will begin to be rolled out to staff

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in 200X following revision based on a number of pilot applications of the manual. Utility Z planners, environmental and communications teams have participated in the pilot applications together with Utility Z’s consultants involved in integrated water management and water conservation studies. The implementation of Utility Z’s Draft Manual will provide a consistent approach in the development of sustainable water servicing strategies and will consolidate Utility Z’s commitment to giving due consideration to demand side management in its future provision of services.

3.2.2 By no later than 1 September each year, Utility Z must provide a demand management strategy report to IPART that reports on its implementation of its demand management strategy for the previous financial year, to enable IPART to consider and report on the matter as part of the Annual audit.

This presents a moderate environmental risk. The risk is generally managed by appropriate metering and metering replacement programmes. Previous audits show high compliance for this clause.

FULL COMPLIANCE

Report completed with full scope

Certification for accuracy of results

The Water Conservation and Recycling Report is Utility Z’s demand management strategy implementation report. The Water Conservation and Recycling Report was submitted to IPART before 1 September 200X and reported on Utility Z’s implementation of its demand management strategy for 200X/0X.

3.2.3 The demand management strategy implementation report must:

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3.2.3 (a) Contain an estimate of past, current and projected water uses and distinguish between residential, industrial, commercial and government uses.

FULL COMPLIANCE

Observance of an estimate of past, current and projected water uses, distinguishing between residential, industrial, commercial and government uses

An estimate of past, current and projected water uses, distinguishing between residential, industrial, commercial and government uses, is presented in Appendix 3 of the Water Conservation and Recycling Report.

COMMENDATION: This work is best practice

3.2.3 (b) Describe the frequency and magnitude of expected supply deficiencies, including those arising as a result of wastage or loss, drought or emergency.

LOW COMPLIANCE

An observance of description of the frequency and magnitude of expected supply deficiencies, including those arising as a result of wastage or loss, drought or emergency

The frequency and magnitude of expected supply deficiencies, including those arising as a result of wastage or loss, drought or emergency are only partially described in Appendix 2 of the Water Conservation and Recycling Report.

However, staff have been reassigned in this regard to allow more time for this activity. It is expected that this additional attention may improve compliance for future years

5 Audit Findings by Section


5.1.3 Discussion

This section of the report is where the Auditor should discuss the key findings and issues identified for section X of the Licence and overall compliance with section X. IPART supports the discretion of the auditor to provide recommendations in this section which may serve to improve the compliance of the Utility with any clause of this part of the Licence.

5.2 Licence Section 4 – Performance Indicators

This above format should be repeated for each auditable section/part of the Operating Licence. It may be appropriate to start a new chapter for each auditable section of the Licence.

6 Concluding Remarks



This section should be 1-5 pages in length and allow the auditor to wrap up the audit and provide their professional opinions on any emerging issues or opportunities for improvement for the Utility based on the audit findings.

The professional opinions of the auditor are not binding, but may be taken under consideration by IPART or the Utility. IPART encourages the auditors to take advantage of this section and present their professional opinions on the operations of the utility.

IPART considers that this section should be for information only and the recommendations or suggestions are in no way binding on the utility. However, the comments from this section may prove useful to the Utility in improving performance in future audits.

This section should also wrap up the audit report with an appropriate conclusion.



Appendices

The appendices should be minimal and only include documents or data that are essential to understanding the content/findings of the report. The Secretariat does not consider that tender documents, the audit brief, or the Operating Licence should be included in the report. This is because the auditor is writing its report for IPART and the utility, and both organisations are well aware of the licence requirements and should be able to easily access these documents. If necessary these items can be included as appendices in IPART’s report to the Minister.


A Comparison of Compliance


B Summary of Stakeholder Consultation

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