Service quality regulationSQ2CConduct regular audits to check service quality indicators

It is very important to verify that collected data about service quality is accurate.

Even more important is to ensure the impartiality of auditors or controllers assigned to perform such a delicate job. Regulators, therefore, develop sets of policies, procedures and guidelines on how to approve, conduct, and report audits, that aim to meet the stated objectives.

Guidelines ensure the regular, transparent and independent auditing of service operators. Audit guidelines must clearly outline respective obligations and rights on both sides, both of regulators and operators.

When setting the ground for transparent control, these guidelines can also incentivize operators to detect and declare any service quality non-compliance. Digitization of information offers opportunities to improve the efficiency of this task.

Default Image
Objective: Establish mechanisms for monitoring adherence to service requirements
Area:
Service quality regulation
Cost:
High
Frequency:
Regular
Target group:
Regulators, Service operators, Consumer associations
Region:
Australia and New Zealand
Date:
Oct 21, 2022

Expected Outcomes

  • There is a reliable and transparent auditing process.
  • Service operators’ internal structure is aligned with the audits.
  • Consumers’ interests are adequatelly protected.

Example

In Australia, the Essential Services Commission in Victoria, an independent regulator that promotes the long term interests of consumers with respect to the price, quality and reliability of energy, water and transport services, established a framework for its audit functions related to the respective regulated industry obligations. The framework includes guideline to meet the following:

  • Ensure that audits are conducted in an independent, rigorous and comparable manner by establishing minimum requirements for the independence and expertise of auditors, and the conduct and reporting of audits.
  • Provide incentives for businesses to achieve compliance by minimizing the probability that significant non-compliance will go undetected, providing regulated water businesses with an opportunity to rectify non-compliance, and taking any further action required to achieve compliance.
  • Maximize the cost-effectiveness of the audits by taking a risk-based approach to defining the scope and frequency of the audits to be undertaken.

Links

Australia: Guideline for Approving, Conducting and Reporting Audits for Victorian Water Businesses:

https://www.esc.vic.gov.au/sites/default/files/documents/regulatory-auditing-framework-to-apply-for-victorian-water-businesses-guideline.pdf

Internal capacities needed and the role of partners

A range of administrative, legal and inspection skills necessary to complete this action obliges regulators to build their internal capacity through training, often seeking support from other national institutions or development partners. Judiciary institutions can, for instance, extend their expertise when outlining the content of guidelines. Development partners could also build on this through training on how to establish implementation procedures.