Transparency initiative annual report

Approach and Methodology

The process of preparation of the EITI Report by Moore Stephens Azerbaijan consisted of the following stages:

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  Analysing the scope of the work and preparation of the inception report;
  
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  The reconciliation process; and
  
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  Collection and structuration of other information and data required by the EITI Standard.
  

Checking the scope of work and preparation of the inception report
The purpose of analysis and the inception report is to obtaining a clear understanding on the EITI Reporting process for the year 2015, collection of other information and data, methodology on the work to be performed by the Independent Administrator, provide new recommendations on the reporting process.
Upon completion of the preparation of the Inception Report, Moore Stephens Azerbaijan presents it to MSG.
The reconciliation process
At this stage, the main duties of the Independent Administrator include the following key issues:

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  Distribution of reporting templates: The Reporting templates are distributed to the Companies and Government agencies by the EITI Secretariat.
  

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  Collection of data: This task involves collecting Reporting Templates completed by the Companies and the Government and supporting documentation. The deadline for submission of Reporting templates to the Independent Administrator was set by the EITI Secretariat and stated as 1 August 2016.
  

Moore Stephens Azerbaijan performs the reconciliation of all actual data provided in the reports received from the Companies and the Government and makes necessary adjustments after identifying any disrepancies arising during the reconcilitiation process.

The initial stages of the reconciliation process are outlined below:

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  Obtaining a clear understanding of the operations;
  
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  Conducting an analysis of the reports submitted by the Companies and the Government;
  
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  Identifying discrepancies arising during the reconciliation process and making necessary adjustments; and
  
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  Including the final reconciliation information and data in the EITI Report.
  

Receipt of Government Reports
We received the reports from the following Government agencies:

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  State Oil Fund of the Republic of Azerbaijan;
  
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  State Oil Company of the Republic of Azerbaijan;
  
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  Ministry of Taxes of the Republic of Azerbaijan; and
  
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  Ministry of Ecology and Natural Resources of the Republic of Azerbaijan.
  

With the purpose of finding explanations to discrepancies arising during the reconciliation process, we contacted the relevant companies and Government agencies and asked for the necessary supporting documents in order to determine the nature of such differences. After the data on payments made by the Extractive industry companies and the benefits received by the Government was collected, the reconcilition process, being the most important part of the assignment was implemented.

Findings and Discrepancies
This task entailed identifying discrepancies arising between the information provided by the companies and the Government paticipating in the reconciliation process. Determination of these disrepancies involves the following procedures:

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  In order to facilitate our analysis of the completed Reporting Templates we developed a database for each of the companies that set out all payment streams on the Reporting Template and the expected Government agency recipient of the revenue;
  
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  After obtaining all the information, we compared the payments and receipts from the companies and the Government to identify any discrepancies on relevant payment/revenue streams;
  
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  The adjustments which had to be carried were made on the basis of supporting documents.
  

Collection and structuration of other data required by the EITI Standard
The information of the EITI Report covered 2014 was analysed and improved by being structured in accordance with the new EITI standards for the year 2015. The structure of the required information was adapted to the requirements of the EITI Standard and included in the Report accordingly.
The information in this Report was obtained from the official websites of both government agencies and companies, open sources available to public and other official letters.