What is an audit?
A mines safety and inspection levy audit is an unbiased examination of total hours worked by all “workers” on the mining operation, as defined in regulation 3 of the Mines Safety and Inspection Levy Regulations 2010 (Levy Regulations).
Why does the Department conduct audits?
The Department conducts audits to ensure everybody pays the amount that is legally required to be paid. Audits help ensure that the safety levy is administered in a fair and uniform manner throughout the mining community.
Who will be conducting the audit for the Department?
Under the Levy Regulations, the Department authorises persons to perform auditing functions. They are trained professionals with many years of experience in a broad range of audit services, including compliance and risk-based audit processes.
What are the auditor’s powers?
Auditors have a range of powers provided for in regulation 37 of the Levy Regulations. These powers permit the auditor to:
- enter, inspect and examine any place
- inspect, examine, copy and take possession of any document or thing
- require a person to answer questions and provide information, and
- require a person to give reasonable assistance.
What are the principal employer’s obligations?
During an audit, the principal employer is obliged to provide:
- the auditor with reasonable assistance and facilities
- complete and honest answers and explanations to questions, and
- prompt, full and free access to all relevant information, records, documents, data and systems as required.
Why is a mine selected for audit?
It is anticipated all principal employers will be audited at least once. A risk-based methodology will then be applied for audit selection.
How is an audit arranged?
The auditor will contact the nominated representative for the mine to schedule a mutually convenient date and time for the audit. The appointment details will be confirmed in writing.
Audits will usually be performed at the location where the records are stored, as nominated by the principal employer. Should this be different to the location where the mining activity is taking place, the auditor may visit the actual mine site.
How is an audit conducted?
Audits will be conducted in a professional and courteous fashion with minimum disruption to the business and its accounting activities. The principal employer will be kept informed during the audit.
At the start of the audit, the auditor may hold an opening meeting to explain the process and provide a short summary of how the audit activities will be undertaken. This will also include providing a reasonable up-front estimate of how long the audit will take.
At the conclusion of the audit, the auditor will have an exit meeting with the principal employer and representatives to deliver a verbal summary of the audit findings.
What records will be required during an audit?
The Levy Regulations include details of the information that must be recorded (see Part 6) but it is up to each organisation to determine how they keep these records. Organisations may wish to use payroll records, record book or a computer spreadsheet.
The auditors will need to review the original data used by principal employers to complete monthly returns, so the required information must be readily accessible. If the information requested is not available, contact the assigned auditor as soon as possible. It is important that the audit takes place as scheduled.
How many years of history are normally examined during an audit?
Records must be kept for at least five years after the quarter to which they relate, whether or not the person remains the principal employer at the mine.
The auditor will discuss the period to be audited with the principal employer before the audit commences.
The auditor will advise if there are any periods to be audited outside the agreed scope.
Must the audit recommendations be implemented?
While the adoption of any audit recommendations is encouraged, management may choose and develop different procedures to correct concerns identified during the audits. However, a principal employer who fails to keep accurate records that enable the total number of hours worked at a mine to be verified may face prosecution.
Will any audits be unannounced?
As a general rule, the Department will not conduct unannounced visits although this may happen from time to time depending on the location and time available to the auditor.
What if the audit reveals incorrect data submitted by a principal employer?
The auditing approach is firstly to seek and foster voluntary compliance, and encourage and assist mine sites to comply with their obligations. The Department will write to the principal employer, advising of the audit outcome. The rest of the process is in accordance with Division 3 in the Levy Regulations, and depends upon the timing of the audit in relation to the assessment notice date.
How accurate must the data submitted be?
The Department has explored options for developing an administrative instrument to allow for a tolerance not exceeding 2 per cent or $100 (whichever is the greater). The tolerance level applies to both under- and over-reporting of levy hours. The tolerance for over-reporting does not prevent a principal employer from seeking a refund. Refunds will be provided if the principal employer resubmits the relevant hours for the period using the reporting system provided by the Department.
Does the tolerance apply to all data reported?
Non-compliance will be treated on a case-by-case basis. Auditors will assess whether records provide complete information or there are gaps in the reporting process. Gaps in the reporting process will generally be considered a breach of the regulations. Gaps may include:
- travel time for workers included in hours reported
- hours averaged (instead of actual)
- not reporting working visitors.
What if a principal employer disagrees with the levy assessment notice amount?
A mine has the right to seek a review of its levy assessments in writing if the principal employer believes that the assessment or reassessment of the number of hours worked at the mine by workers in the period is incorrect.
The objection must be made to the Director General of the Department and must –
- be in writing
- identify the person making the objection
- attach a copy of the notice relating to the assessment or reassessment that is the subject of the objection, and
- give details of the grounds of the objection.
The request for a review may be lodged via email to firstname.lastname@example.org
Must the notice of assessment be paid even if the amount is disputed?
Yes, to avoid being charged the penalty for late payment, the notice of assessment should be paid. The reviewer will consider and determine your objection within 28 days of the objection being lodged with the Department.