Auditors have been waiting for guidance to be produced by the Chartered Institute of Accountants before taking on the assessment work, but this has run into delays.
” Due to a delay in guidance from the Institute of Chartered Accountants of England and Wales, many auditors refused to carry out this work. “
– Environment Agency
As a result, the Agency has now given reprocessors until the end of March to submit audits.
Under the producer responsibility regulations, accredited reprocessors recovering more than 400 tonnes of packaging waste each year must have their reprocessing figures audited.
The annual deadline for submitting the audit reports has been set within the regulations as February 28.
A spokeswoman for the Agency said: “The Agency has no powers to extend the deadline for submission of the independent Audit report. However, due to a delay in guidance from the Institute of Chartered Accountants of England and Wales, many auditors refused to carry out this work.
“This has led to the Agency taking an enforcement position that it will take no action if a company has an auditor in place before the 28 February who is waiting for guidance from the institute. We must receive the report by the 31 March,” the Agency spokeswoman added.
Requirement
The auditing requirement for large reprocessors was a measure designed to reduce fraud in the selling of packaging waste recovery notes (PRNs) or their export equivalent, PERNs, to packaging producers. PRNs are a form of evidence used to show packaging producers have paid for their share of UK recycling and recovery targets.
Angus Macpherson, chief executive of online PRN market the Environment Exchange said many auditors were understandably cautious in the post-Enron era. But, he said his company was offering a service that could put reprocessors in touch with auditors that were willing to carry out the auditing work.
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He explained: “The take up of our service is generally for those companies with less than a six million turnover that therefore don't have their own auditor, where auditors don't feel technically competent enough to deal with the PRN system or where companies are so large they don't want their auditors distracted by a comparatively small issue.”
Mr Macpherson said his independent auditors service had had a good take-up, with initial estimates suggesting about 27% of the market had made use of it.
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