Common use of Internal Audit Clause in Contracts

Internal Audit. A report of the internal audit of the charges billed with respect to Illinois by LUCo during the preceding calendar year shall be provided to the ICC’s Accounting Department no later than July 31 of each calendar year. The first such report shall cover the first calendar year beginning after this Agreement is approved by the ICC. The internal audit report shall reflect the results of an internal audit that tests compliance with the processes outlined in the Agreement. Liberty Midstates shall use reasonable efforts to cause the internal audit to test compliance with the following: (a) Internal controls are adequate to ensure that costs associated with transactions covered by this Agreement are properly and consistently allocated and billed in accordance with this Agreement pursuant to Section 2.2 of the Agreement; (b) Time reporting of employees of LUCo is properly charged to Liberty Midstates and the hourly rates are calculated pursuant to Section 2.2 of the Agreement; (c) Allocation factors are sampled to confirm that they are correctly calculated pursuant to Section 2.2 of the Agreement and Item 6 of this Addendum and the sampled allocation factors are updated as required by this Addendum; (d) All costs charged pursuant to the Agreement are determined in accordance with either a direct or indirect charge and that indirect charges are allocated based on a consistent, predetermined allocation methodology pursuant to Section 2.2 of the Agreement and based on the allocation in effect at the time the service was provided; (e) Costs charged pursuant to the Agreement comply with Item 3 of this Addendum. (f) Current policies and procedures regarding this Addendum are readily available to the employees of LUCo and the Receiving Company and current and new employees that perform work under or related to the Agreement are given periodic training in their responsibilities with respect to this Agreement with an emphasis on the importance of assigning time and expenses to the appropriate Receiving Company; (g) The Billing Report required by Item 8 of this Addendum was timely filed; and (h) The allocation template and affiliate update required pursuant to Item 7 of this Addendum was timely filed (including updates when there are changes to the Liberty Utilities Entities).

Internal Audit. A report of the internal audit of the charges billed with respect to Illinois by LUCo APUC during the preceding calendar year shall be provided to the ICC’s Accounting Department no later than July 31 of each calendar year. The first such report shall cover the first calendar year beginning after this Agreement is approved by the ICC. The internal audit report shall reflect the results of an internal audit that tests compliance with the processes outlined in the Agreement. Liberty Midstates shall use reasonable efforts to cause the internal audit to test compliance with the following: (a) Internal controls are adequate to ensure that costs associated with transactions covered by this Agreement are properly and consistently allocated and billed in accordance with this Agreement pursuant to Section 2.2 of the Agreement; (b) Time reporting of employees of LUCo APUC is properly charged to Liberty Midstates and the hourly rates are calculated pursuant to Section 2.2 of the Agreement; (c) Allocation factors are sampled to confirm that they are correctly calculated pursuant to Section 2.2 of the Agreement and Item 6 of this Addendum and the sampled allocation factors are updated as required by this Addendum; (d) All costs charged pursuant to the Agreement are determined in accordance with either a direct or indirect charge and that indirect charges are allocated based on a consistent, predetermined allocation methodology pursuant to Section 2.2 of the Agreement and based on the allocation in effect at the time the service was provided; (e) Costs charged pursuant to the Agreement comply with Item 3 of this Addendum. (f) Current policies and procedures regarding this Addendum are readily available to the employees of LUCo APUC and the Receiving Company and current and new employees that perform work under or related to the Agreement are given periodic training in their responsibilities with respect to this Agreement with an emphasis on the importance of assigning time and expenses to the appropriate Receiving Company; (g) The Billing Report required by Item 8 of this Addendum was timely filed; and (h) The allocation template and affiliate update required pursuant to Item 7 of this Addendum was timely filed (including updates when there are changes to the Liberty Utilities Entities).

Internal Audit. A report of the internal audit of the charges billed with respect to Illinois by LUCo XXX during the preceding calendar year shall be provided to the ICC’s Accounting Department no later than July 31 of each calendar year. The first such report shall cover the first calendar year beginning after this Agreement is approved by the ICC. The internal audit report shall reflect the results of an internal audit that tests compliance with the processes outlined in the Agreement. Liberty Midstates shall use reasonable efforts to cause the internal audit to test compliance with the following: (a) Internal controls are adequate to ensure that costs associated with transactions covered by this Agreement are properly and consistently allocated and billed in accordance with this Agreement pursuant to Section 2.2 of the Agreement; (b) Time reporting of employees of LUCo XXX is properly charged to Liberty Midstates and the hourly rates are calculated pursuant to Section 2.2 of the Agreement; (c) Allocation factors are sampled to confirm that they are correctly calculated pursuant to Section 2.2 of the Agreement and Item 6 of this Addendum and the sampled allocation factors are updated as required by this Addendum; (d) All costs charged pursuant to the Agreement are determined in accordance with either a direct or indirect charge and that indirect charges are allocated based on a consistent, predetermined allocation methodology pursuant to Section 2.2 of the Agreement and based on the allocation in effect at the time the service was provided; (e) Costs charged pursuant to the Agreement comply with Item 3 of this Addendum. (f) Current policies and procedures regarding this Addendum are readily available to the employees of LUCo XXX and the Receiving Company and current and new employees that perform work under or related to the Agreement are given periodic training in their responsibilities with respect to this Agreement with an emphasis on the importance of assigning time and expenses to the appropriate Receiving Company; (g) The Billing Report required by Item 8 of this Addendum was timely filed; and (h) The allocation template and affiliate update required pursuant to Item 7 of this Addendum was timely filed (including updates when there are changes to the Liberty Utilities Entities).

Internal Audit. A report of the internal audit of the charges billed with respect to Illinois by LUCo LUSC during the preceding calendar year shall be provided to the ICC’s Accounting Department no later than July 31 of each calendar year. The first such report shall cover the first calendar year beginning after this Agreement is approved by the ICC. The internal audit report shall reflect the results of an internal audit that tests compliance with the processes outlined in the Agreement. Liberty Midstates shall use reasonable efforts to cause the internal audit to test compliance with the following: (a) Internal controls are adequate to ensure that costs associated with transactions covered by this Agreement are properly and consistently allocated and billed in accordance with this Agreement pursuant to Section 2.2 of the Agreement; (b) Time reporting of employees of LUCo LUSC is properly charged to Liberty Midstates and the hourly rates are calculated pursuant to Section 2.2 of the Agreement; (c) Allocation factors are sampled to confirm that they are correctly calculated pursuant to Section 2.2 of the Agreement and Item 6 of this Addendum and the sampled allocation factors are updated as required by this Addendum; (d) All costs charged pursuant to the Agreement are determined in accordance with either a direct or indirect charge and that indirect charges are allocated based on a consistent, predetermined allocation methodology pursuant to Section 2.2 of the Agreement and based on the allocation in effect at the time the service was provided; (e) Costs charged pursuant to the Agreement comply with Item 3 of this Addendum. (f) Current policies and procedures regarding this Addendum are readily available to the employees of LUCo LUSC and the Receiving Company and current and new employees that perform work under or related to the Agreement are given periodic training in their responsibilities with respect to this Agreement with an emphasis on the importance of assigning time and expenses to the appropriate Receiving Company; (g) The Billing Report required by Item 8 of this Addendum was timely filed; and (h) The allocation template and affiliate update required pursuant to Item 7 of this Addendum was timely filed (including updates when there are changes to the Liberty Utilities Entities).