The way in which the Auditor General determined and treated these decommissioning and decontamination costs in the 2014/15 audit and financials resulted in a significant financial liability for NECSA, which affected the audit opinion of the company as a going concern.
 
The disagreement with the Auditor General and the refusal by NECSA to sign off on its 2014/15 financials became so serious and intractable that NECSA commenced with a legal action challenging the Auditor General's interpretation and approach to accounting for the future decommissioning and decontamination costs.
 
In the meantime, the ongoing disagreement resulted in the Ernst & Young audit team, who act for the Auditor General on the 2015/16 annual audit, being moved off site last week, whilst NECSA and the Auditor General engaged further to try and reach some resolution on this matter.
 
These latest engagements between NECSA and the Auditor General have resulted in the opening of renewed discussions on the 2014/15 audit, and have led to some progress in resolving the impasse and the withdrawal of the current legal action against the office of the Auditor General.
 
Following a promise of new information from NECSA for consideration, the Auditor General advised NECSA on 6 May 2016 that the Ernst & Young audit team will re-commence its work on the 2015/16 audit only when written confirmation had been received from the NECSA CEO that the legal action has been dropped.
 
NECSA chairman Dr. Kelvin Kemm indicated today that NECSA had subsequently provided such written confirmation to the Auditor General on 7 May 2016, which will now enable the 2015/16 audit to proceed without further delay.
 
It would appear that, at least for now, the stumbling block preventing the signing off and submission to Parliament of NECSA's 2014/15 and 2015/16 annual financial reports has been removed.
 
But it still remains to be seen as to how NECSA and the Auditor General will deal with the thorny international problem of making adequate provision and accounting for future costs of nuclear decommissioning and decontamination in the years ahead... (more)