Commission Findings. 41. We find that NERC’s proposed compliance audit procedures satisfy the requirements of the ERO Certification Order. As discussed below, we also identify modifications to be addressed by NERC. As required by the ERO Certification Order, we find that NERC has included the necessary language in its audit procedures, at section 3.1.5, stating that no restrictions will be placed on the participation of Commission Staff in a compliance audit. We also find that NERC’s compliance audit procedures are generally consistent with GAO procedures.37 However, we direct NERC to review 36 The relevant language provides that “in the event the audit report identifies Alleged Violations, the final audit report, or pertinent part thereof, shall not be released to the public until after such Alleged Violations have been addressed and finally determined by the Compliance Enforcement Authority. . .” (emphasis added). GSOC asserts that the italicized phrase should be deleted. judgment); ¶ 3.39 through 3.42 (competence); ¶ 3.45 through ¶ 3.48 (continuing professional education); ¶ 3.49 through ¶ 3.56 (quality control and assurance), and additional provisions addressing reporting and field work procedures. annually whether any changes to the GAO Standards have occurred and to address in its annual audit plan whether any changes in its audit procedures are appropriate. 42. With respect to section 3.1.1, we note that a compliance audit team will be authorized to conduct an audit subject to NERC “audit guides.” However, NERC has not filed these guides for our approval, nor is it clear whether these audit guides have as yet been developed by NERC. Accordingly, we direct NERC to submit the audit guides and to explain whether they should be incorporated into the Uniform Compliance Program. 43. We also agree with GSOC that the footnote to section 3.1.1 appears to be circular. Accordingly, NERC must consider a clarification. 44. We decline, as unnecessary, Xcel’s request that an audited entity be permitted to review an audit report before it is finalized. Section 3.1 allows for sufficient input, both in the audit team exit briefing and in the audited entity’s subsequent review of and opportunity to comment on the draft audit report. We also reject GSOC’s request regarding the use of consistent terms with respect to the time deadlines referenced in section 3.1. We find that these deadlines are clearly identified and are not otherwise confusing. Likewise, we find that the procedures and schedule for the release of an audit report are reasonable and provide for adequate due process and, therefore, we reject AMP-Ohio’s suggestion regarding the timing of the release of a final audit report to the audited entity. 45. Section 3.1.3 provides that in addition to a scheduled audit, an unscheduled audit may be conducted “if reasonably determined to be necessary” to ensure compliance with a reliability standard. However, we do not construe this provision as allowing an entity to challenge the decision to conduct such an audit, or as allowing the entity to prevent or fail to cooperate with such an audit. The decision to undertake such an audit should be within the discretion of NERC and the Regional Entities. Also, the Commission may direct NERC or a Regional Entity to undertake an audit at any time. Accordingly, we direct NERC to revise this provision. We also note that section 3.1.3 fails to provide that NERC and the Commission will receive notification of an unscheduled audit. Accordingly, we direct NERC to revise section 3.1.3 to include this requirement. 46. We reject GSOC’s argument regarding the conditions authorizing the compliance enforcement authority to perform a compliance audit under section 3.1.3. GSOC argues that the proposal to allow a compliance audit based on “criteria established by NERC” is vague, unsupported, and should, instead, be based solely on the alternative ground set forth in section 3.1.3, i.e., on the NERC Rules of Procedures. However, GSOC has not provided any support for its position and we see no reason to limit NERC in the manner requested. 47. With respect to section 3.1.3, we agree with Xcel that an audited entity should be entitled to receive sufficient advance notice of an unscheduled audit in order to assess and, if it deems necessary, contest the composition of the audit team. On the other hand, too much advance notice would defeat the purpose of an “unscheduled” audit. Accordingly, NERC must have the discretion to consider the appropriate balance that will be required regarding these interests and to propose any revisions it may deem necessary. 48. We reject the arguments raised by Xxxx, EEI, and KCPL that Commission Staff, when participating in a compliance audit, should be bound by the same confidentiality rules as all other compliance audit team members. FPA section 301(b) prohibits Commission Staff from publicly disclosing any information it receives during an audit unless the Commission or a court directs such disclosure.38 We interpret this requirement to apply to Commission Staff participating in a compliance audit authorized under section
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Samples: Delegation Agreement, Delegation Agreement, Delegation Agreement
Commission Findings. 41. We find that NERC’s proposed compliance audit procedures satisfy the requirements of the ERO Certification Order. As discussed below, we also identify modifications to be addressed by NERC. As required by the ERO Certification Order, we find that NERC has included the necessary language in its audit procedures, at section 3.1.5, stating that no restrictions will be placed on the participation of Commission Staff in a compliance audit. We also find that NERC’s compliance audit procedures are generally consistent with GAO procedures.37 However, we direct NERC to review 36 The relevant language provides that “in the event the audit report identifies Alleged Violations, the final audit report, or pertinent part thereof, shall not be released to the public until after such Alleged Violations have been addressed and finally determined by the Compliance Enforcement Authority. . .” (emphasis added). GSOC asserts that the italicized phrase should be deleted. 37 Specifically, NERC’s audit procedures are based on the following GAO procedures: ¶ 3.03 through ¶ 3.32 (independence); ¶ 3.33 through ¶ 3.38 (professional judgment); ¶ 3.39 through 3.42 (competence); ¶ 3.45 through ¶ 3.48 (continuing professional education); ¶ 3.49 through ¶ 3.56 (quality control and assurance), and additional provisions addressing reporting and field work procedures. annually whether any changes to the GAO Standards have occurred and to address in its annual audit plan whether any changes in its audit procedures are appropriate.
42. With respect to section 3.1.1, we note that a compliance audit team will be authorized to conduct an audit subject to NERC “audit guides.” However, NERC has not filed these guides for our approval, nor is it clear whether these audit guides have as yet been developed by NERC. Accordingly, we direct NERC to submit the audit guides and to explain whether they should be incorporated into the Uniform Compliance Program.
43. We also agree with GSOC that the footnote to section 3.1.1 appears to be circular. Accordingly, NERC must consider a clarification.
44. We decline, as unnecessary, Xcel’s request that an audited entity be permitted to review an audit report before it is finalized. Section 3.1 allows for sufficient input, both in the audit team exit briefing and in the audited entity’s subsequent review of and opportunity to comment on the draft audit report. We also reject GSOC’s request regarding the use of consistent terms with respect to the time deadlines referenced in section 3.1. We find that these deadlines are clearly identified and are not otherwise confusing. Likewise, we find that the procedures and schedule for the release of an audit report are reasonable and provide for adequate due process and, therefore, we reject AMP-Ohio’s suggestion regarding the timing of the release of a final audit report to the audited entity.
45. Section 3.1.3 provides that in addition to a scheduled audit, an unscheduled audit may be conducted “if reasonably determined to be necessary” to ensure compliance with a reliability standard. However, we do not construe this provision as allowing an entity to challenge the decision to conduct such an audit, or as allowing the entity to prevent or fail to cooperate with such an audit. The decision to undertake such an audit should be within the discretion of NERC and the Regional Entities. Also, the Commission may direct NERC or a Regional Entity to undertake an audit at any time. Accordingly, we direct NERC to revise this provision. We also note that section 3.1.3 fails to provide that NERC and the Commission will receive notification of an unscheduled audit. Accordingly, we direct NERC to revise section 3.1.3 to include this requirement.
46. We reject GSOC’s argument regarding the conditions authorizing the compliance enforcement authority to perform a compliance audit under section 3.1.3. GSOC argues that the proposal to allow a compliance audit based on “criteria established by NERC” is vague, unsupported, and should, instead, be based solely on the alternative ground set forth in section 3.1.3, i.e., on the NERC Rules of Procedures. However, GSOC has not provided any support for its position and we see no reason to limit NERC in the manner requested3.1.
47. With respect to section 3.1.3, we agree with Xcel that an audited entity should be entitled to receive sufficient advance notice of an unscheduled audit in order to assess and, if it deems necessary, contest the composition of the audit team. On the other hand, too much advance notice would defeat the purpose of an “unscheduled” audit. Accordingly, NERC must have the discretion to consider the appropriate balance that will be required regarding these interests and to propose any revisions it may deem necessary.
48. We reject the arguments raised by Xxxx, EEI, and KCPL that Commission Staff, when participating in a compliance audit, should be bound by the same confidentiality rules as all other compliance audit team members. FPA section 301(b) prohibits Commission Staff from publicly disclosing any information it receives during an audit unless the Commission or a court directs such disclosure.38 We interpret this requirement to apply to Commission Staff participating in a compliance audit authorized under section
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Samples: Delegation Agreement, Delegation Agreement