HFCs in the Crosshairs: New EPA Rules and Reporting Requirements
Published on by Jessica Doremus in Assurance, Manufacturing
Organizations that produce, import, and export hydrofluorocarbons have new audit and reporting requirements coming their way.
The U.S Environmental Protection Agency (EPA) has issued rules under the American Innovation and Manufacturing Act of 2020 which mandate the phasedown of hydrofluorocarbons (HFCs). Included in these rules are reporting and recordkeeping requirements for entities that produce, import, and export HFCs.
Agreed-upon procedures
The EPA has determined that agreed-upon procedures engagements meet the audit requirements for the HFC rule. These reports are due annually by May 31st of the year following the compliance period and are to be performed by a CPA in accordance with the AICPA Attestation Standards, specifically AT-C Section 215, Agreed-Upon Procedure Engagements.
What if we missed the May 31 deadline?
Since the deadline is, well, today, note that for companies that missed the deadline, we advise you to complete the requirements as soon as possible. Barnes Dennig is monitoring any efforts by the EPA to provide relief for late filers and will provide updates as needed.
How the AUPs are used
These AUPs are used to verify that reports submitted to the EPA are accurate and ensure the integrity of the HFC Allocation program. Producers, importers, and exporters of regulated HFCs are subject to these auditing requirements. The reports differ depending on the activities the entity undertakes (produce, import, export, etc.). The AUP is to be done following the requirements in the EPA’s guidance.
What reports are required?
There will be two reports to submit: 1) a summary of findings and 2) a detailed findings report. The report must include a summary of findings, a list of records reviewed, and must identify any instances where specified values did not meet the applicable requirements.
The report must identify the applicable procedures specified in the regulations along with the findings for each procedure. EPA has a template to be used for the summary of findings.
What to do next
Further guidance about the reporting requirements, procedures to be performed, and information about how to submit the reports can be found on the EPA’s website in this PDF. If you’re a manufacturer impacted by the new rules, need an AUP, or just have some questions, the Barnes Dennig team of top manufacturing pros is here to help. Contact us for a free consultation.
Related content
You may also be interested in the latest Manufacturing Compensation & Benefits study, which takes a deep dive into what manufacturers in our region are doing to attract and retain top talent. It’s a great tool for business planning and for ensuring your compensation and benefits are competitive. Download your free copy now.
