Policy paper

Template for external auditor or chartered accountant report (not mandatory)

Updated 31 January 2024

Report of factual findings in connection with the Energy Bills Discount Scheme (EBDS) Energy and Trade Intensive Industries (ETII) eligibility requirements.

OFFER LETTER/CONTRACT DATED [DATE][Reference]

To: Directors [and the Department for Energy Security and Net Zero/ Secretary of State as the ‘scheme operator’ ]

This report is produced for the purpose of reporting to the directors of [client] (the ‘company’) and [scheme operator] (the ‘scheme operator ’)8 in connection with the application for the EBDS ETII support from the [[scheme operator ] (the ‘scheme operator ’)]/[scheme operator / grant provider]].

[Insert appropriate clarifying language from Appendix [X}]

[Respective responsibilities of the company and [firm of accountants]

As directors of the company, you are responsible for ensuring that the company maintains accounting records which disclose with reasonable accuracy, at any time, the financial position of the company, and in respect of the ETII support application , as the company’s directors (the ‘directors’) you are responsible for submitting the application and accompanying evidence as set out in [regulations and guidance], ensuring that all application processes and eligibility criteria have been complied with or varied in writing with the scheme operator. It is also the directors’ responsibility to extract relevant financial information from the company’s accounting records, to make the calculations specified, and to provide relevant financial information to the scheme operator.

Our approach

For the purpose of the engagement we have been provided by the directors with a schedule (as defined under the offer letter) showing the organisation’s eligible revenue as being a minimum of 50% of the total revenue generated from Great Britain and Northern Ireland based activity, and the necessary calculations in accordance with the EBDS ETII eligibility criteria. The directors of the company remain solely responsible for the schedule.

Our engagement was undertaken in accordance with the International Standard on Related Services 4400 applicable to agreed-upon procedures engagements. We were asked to perform the [Y] procedures as detailed in Appendix [X] and our engagement letter.

We confirm that we carried out [X] out of the [Y] procedures. The results of these procedures are as follows:

We were unable to carry out the following procedures: [and state reason]

• or

We confirm that we carried out the following procedures (except [X] because …)

[List out the findings, with detailed exceptions (including the procedures that could not be performed, where applicable)]

7 Report will be addressed to scheme operator / grant provider where they have entered into a contract with the accountant.

8 Report will be addressed to scheme operator / grant provider where they have entered into a contract with the accountant.29 Framework document for accountants’ reports on grant claims

Inherent limitations

Our procedures, [as stated in our engagement letter] do not constitute an examination made in accordance with generally accepted auditing standards, the objective of which would be the expression of assurance on the contents of the schedule. Accordingly, we do not express such assurance. Had we performed additional procedures or had we performed an audit or review of the schedule in accordance with generally accepted auditing or review standards, other matters might have come to our attention that would have been reported to you. This report relates only to the schedule and does not extend to any financial statements of the company, taken as a whole.

[Our audit work on the financial statements of [ETII name] is carried out in accordance with our statutory obligations and is subject to separate terms and conditions. This engagement will not be treated as having any effect on our separate duties and responsibilities as [ETII applicant]’s external auditors. Our audit report on the financial statements is made solely to [grant recipient]’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to [ETII applicant]’s members those matters we are required to state to them in an auditor’s report to support their application for the Energy Bills Discount Scheme ETII support, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than [ETII] and [ETII]’s members as a body, for our audit work, for our audit reports, or for the opinions we have formed.9

Yours faithfully,

Name

Firm of Accountants

Office

Professional / accreditation body membership(s)

Date

Number	Procedures	Findings
1	Agree the total revenue figure per the form to the general ledger for the period.	Example: We obtained the total revenue figures from the client’s end of year reports, spanning xx/xx/xxxx - xx/xx/xxxx. After inspection we agree that the total revenue for this timeframe was £xxxx
2	Agree the total revenue figure per the form to HMRC and/or Companies House filings for the period.
3	Obtain a listing of ETII revenue and non-ETII revenue for the period by invoice/contract.	Example: We obtained a breakdown of revenue, split by ETII and non-ETII activity.
4	Confirm the arithmetical accuracy of the listing [and that ETII revenue in total accounts for at least 50% of the total revenue figure for the period].	Example: We obtained the calculation used to determine the ETII revenue %
5	Agree total of ETII and non-ETII revenue agrees to total revenue per general ledger.	Example: We re-calculated the proportion of ETII revenue as a proportion of total revenue, agreeing / determining that ETII activity accounts for XX% of revenue.
6	Trace a sample of the 20 largest items from ETII revenue listing to supporting documentation.
7	[For the same sample, trace the receipt of revenue to bank statements.]

Number	Non-Pay Expenditure / Purchases
8	Obtain a listing of ETII expenditure and non-ETII expenditure for the period by invoice/contract.
9	Confirm the arithmetical accuracy of the listing [and that ETII expenditure in total accounts for at least 50% of the total expenditure figure for the period].
10	Agree total of ETII and non-ETII expenditure agrees to total purchase listing/ledger.
11	Trace a sample of 20 items from ETII expenditure listing to supporting documentation.