Verification

The structure of the verification activities is consistent with the EU ETS regulations and is documented in the VerifAvia ETS Assurance Management System Manual which is based on the approaches used for both financial and management systems auditing.

We view verification as an iterative process aiming at continuous improvement of the operator's EU ETS management and control systems. For efficiency and to allow time for corrective actions, we follow a two-stage approach:

Stage 1: analysis of the design and implementation of the Operator's ETS management system (organisation, procedures, IT) and control system, identification of any areas of risk that require special attention, assessment of whether the ETS system conforms with the monitoring plan and the ETS regulations, and test of available ETS data
Stage 2: detailed testing and analysis of ETS data, independent technical review, materiality analysis and final verification opinion

Step 1 - Pre-Contract Stage

The aim is to ensure that the scope and extent of verification activities and time quoted are sufficient to meet the requirements for "Reasonable Assurance". In this step, VerifAvia will:

Analyse the information provided by the operator
Evaluate the scope and complexity of the verification activities
Select the verification team and allocate time to verification activities
Prepare a draft contract, including quotation and contract conditions

Steps 2 & 3 – Strategic and Risk Analysis

The strategic analysis aims to understand the operator’s organisation and obtain an overview of the design and implementation of its EU ETS management and control systems, so that an appropriate verification plan can be established.

The aim of the risk analysis is to identify where there are risks of system failure/breakdown that might result in a material misstatement or material non-conformity in the annual emissions or tonne-kilometre reports; it is on the higher risk areas that the verification team will focus its efforts.

VerifAvia will consider the following inputs:

The approved monitoring plans and any changes to-date and how the operator has communicated this to the Competent Authority
The nature, scale and complexity of the operator's operations and the associated EU ETS processes
The complexity of IT systems used to handle EU ETS data
Whether all the required control elements (MRG2:2007 Section 10.3) have been accounted for
The existence of an environmental or a quality management system, for example ISO9000, ISO14001, EMAS or equivalent
The existence of quality control and assurance processes that specifically focus on EU ETS data and systems
The organizational structure of EU ETS management and how it is integrated with the overall business organisation
The availability of information and data in terms of ease of access, completeness and accuracy

Step 4 – Verification Plan

Based on the strategic and risks analysis, VerifAvia will prepare a verification plan which will include:

A verification program that includes the nature, scope, personnel resources and timeframe of the verification activities
A data analysis plan which sets out the data to be sampled and tested, the nature of the tests and how to respond where tests have failed
The details of any site visit(s), if required

Step 5 – Business Process Analysis

VerifAvia will implement the verification plan and assess whether the EU ETS management system conforms with the approved monitoring plans, the MRG and the national legislation of the administering Member State.

The process analysis is based on site visit(s) (if required), interviews, document review, observation and corroboration of information. The process includes:

Interview of EU ETS manager, Flight Operations, Quality, Maintenance, IT, Ground Handling, Cargo and other departments if required
Observation of IT systems or spreadsheets used to process EU ETS data (both simple and complex)
Review of documents including Quality Manual, EU ETS Manual, calibration certificates and documented quality and maintenance activities
Review of flight documentation including technical logs, journey logs, load sheets, fuel delivery notes, fuel invoices

Step 6 – Data Analysis

VerifAvia will conduct a thorough analysis of EU ETS data by uploading flight, payload and fuel data into our VerifAvia EU ETS Data Analysis System (VEDAS) which automatically identifies data gaps, highlights flights with fuel consumption outside of the typical range and performs plausibility checks on fuel and payload data.

The data analysis will allow the identification of problems with the data so that the operator can undertake corrective actions if necessary. This process will also allow the auditor to gain confidence in the reported EU ETS data which will facilitate the verification process.

During Step 6, VerifAvia will also:

Cross-check flight data with the air traffic data collected by EUROCONTROL and accessible through the ETS Support Facility
Perform consistency checks between aggregated fuel consumption data and total fuel purchased (only when all flights are included into the EU ETS)
Conduct data sampling of payload and fuel data on flights selected randomly

When the two Stages of verification work are split over time, Step 6 may also be conducted in two parts:

Stage 1: analysis and test of data collected until the start of the audit
Stage 2: analysis and test of remaining data until the end of the monitoring period

Steps 7 - Reporting

Throughout all the steps identified above, the verification team maintains an Issues Log that lists issues arising, as well as outstanding questions and documents that have been requested. VerifAvia will share this Issues Log with the Operator so there is a common list of issues to be closed out before completion of the audit.

The Operator is required to undertake corrective actions and provide evidence to the verification team. Where issues cannot be closed out, their impact will be taken into account when preparing the opinion statement. It is not necessary that all issues identified be implemented immediately to ensure a positive verification opinion. For example, some issues that are less critical can be viewed as 'improvement opportunities' and carried forward for future implementation.

At the end of the whole verification, the verification team evaluates all its findings and conducts a materiality analysis on any errors and non-conformities remaining, in order that it can draft its opinion statement. It then compiles all its work papers and collected evidence into an internal verification pack for internal review.

Step 8 - Technical Review

Before a decision can be made to issue the final verification opinion, the verification pack and associated draft verification opinion must be independently reviewed by a competent person (a technical reviewer) who did not participate in the verification process itself.

The objective of the independent review is to ensure that the verification process was conducted in accordance with VerifAvia's documented procedures, that due professional care and judgment has been used, and that any verification risks have been minimised. Lastly, the evidence and work papers are reviewed to ensure that they support the stated opinion.

Step 9 – Final Verification Report

VerifAvia will submit a final verification opinion to the Operator. It is the Operator's responsibility to submit this to the Competent Authority together with a copy of the verified emissions and tonne-kilometre reports.

Step 10 – Approval of data into EU ETS registry

VerifAvia will then approve the relevant entries into the EU ETS registry of the client.

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