EPR Audits: What to Expect

Understanding EPR Audits

The Environment Agency selected 340 businesses for compliance audits in 2024. Most weren't prepared. An EPR audit isn't necessarily a punishment — it can be triggered randomly — but the businesses that sailed through had one thing in common: their records were complete and their calculations were traceable. Here's how to get there.

While audits may seem daunting, businesses with accurate records and proper documentation handle them successfully. This guide prepares you for the audit process from notification through resolution.

Types of EPR Audits

Desk-Based Audits

Conducted remotely without site visits:

• Environment Agency requests documentation by email or portal
• You provide digital copies of records
• Auditor reviews submissions and supporting documents
• Follow-up questions handled via email or phone
• Most common audit type

On-Site Audits

Environment Agency visits your premises:

• Auditor inspects physical records and operations
• Interviews with packaging, operations, and finance staff
• Observation of packaging processes and storage
• Typically reserved for larger businesses or complex cases
• May occur if desk audit reveals concerns

Targeted Audits

Focus on specific aspects of compliance:

• Modulation factor verification
• Export exemption documentation
• Reusable packaging system validation
• Specific material classifications

Audit Triggers

Random Selection

Some businesses are selected randomly to ensure system-wide compliance. Random selection is not an indication of suspected problems.

Risk-Based Selection

Factors that may trigger audit selection:

• Tonnage anomalies: Significant quarter-to-quarter variations without explanation
• Favorable modulation claims: High percentage of packaging claimed as easily recyclable
• Large export exemptions: Substantial tonnage claimed as exported
• Late or amended submissions: Pattern of corrections or delays
• Industry comparison: Data significantly different from similar businesses
• Incomplete documentation: Missing information in previous submissions

Complaint-Driven Audits

Third-party reports of potential non-compliance can trigger investigations, though these are less common.

Audit Notification

What to Expect

Environment Agency will notify you of an audit:

• Notice period: Typically 14 days minimum before document request or site visit
• Notification method: Letter or email to registered contact
• Scope definition: Which submissions or periods are being audited
• Document list: Specific records required
• Timeline: Deadlines for providing information
• Contact information: Auditor details for questions

Initial Response

Upon receiving audit notification:

1. Acknowledge receipt immediately
2. Confirm you understand the scope and timeline
3. Identify internal point person for audit coordination
4. Begin gathering requested documents
5. If using compliance scheme, notify them immediately
6. Ask questions if any requirements are unclear

What Auditors Examine

Documentation Review

Auditors will request and review:

Tonnage Verification

• Packaging supplier invoices for audited periods
• Calculation worksheets showing how tonnage was determined
• Purchase records from accounting systems
• Inventory records if using usage-based reporting

Material Classification

• Material specifications from suppliers
• Technical data sheets for packaging items
• Documentation of material sub-types (plastic polymers, paper grades)
• Photos or samples of packaging

Modulation Evidence

• Recyclability certificates (OPRL, RecyClass, etc.)
• Supplier confirmations of material composition
• Evidence supporting "easily recyclable" or other favorable claims
• Test reports for innovative materials

Exemption Support

• Export documentation (customs declarations, shipping manifests)
• Reusable packaging system records
• Evidence of special circumstances claimed

Submission History

• Copies of all quarterly submissions for audited period
• Submission confirmations and reference numbers
• Previous audit reports if applicable
• Correspondence with Environment Agency

Common Audit Questions

Be prepared to answer:

1. How do you track packaging purchases throughout the year?
2. What methodology do you use to calculate tonnage?
3. How do you determine material classifications?
4. Who is responsible for EPR compliance in your organization?
5. How do you ensure accuracy of data before submission?
6. What changes have occurred in your packaging over the audited period?
7. How do you verify supplier-provided weights?
8. What quality checks do you perform on data?

Preparing for an Audit

Pre-Audit Checklist

Internal Review

Before auditor review, conduct your own audit:

1. Verify completeness: Do you have all required documentation?
2. Check calculations: Recalculate tonnage to confirm accuracy
3. Review classifications: Confirm material types and modulation codes are correct
4. Cross-reference: Do invoices match reported tonnage?
5. Identify gaps: Note any missing documentation and find alternatives
6. Prepare explanations: Document reasons for any anomalies or unusual patterns

Organizing Documents

Structure your audit response for clarity:

• Create index of all documents provided
• Number pages for easy reference
• Use clear file naming conventions for digital submissions
• Separate documents by category (invoices, specifications, calculations)
• Include cover letter explaining organization

Team Preparation

Brief relevant staff members:

• Identify who will serve as primary contact with auditor
• Ensure finance staff understand packaging purchase records
• Brief operations staff on packaging processes
• Prepare compliance manager with full background
• Establish internal communication protocol

During the Audit

Communication Best Practices

• Be responsive: Answer auditor questions promptly
• Be honest: If you don't know something, say so rather than guessing
• Be clear: Provide direct answers without unnecessary elaboration
• Be professional: Maintain courteous, cooperative tone
• Document everything: Keep records of all communication

Providing Documentation

When submitting requested records:

• Provide exactly what was requested
• If unable to provide specific document, explain why and offer alternative
• Submit within deadline or request extension if needed
• Keep copies of everything provided
• Confirm receipt of submissions

Handling Questions

When auditor asks questions:

• Listen carefully to understand what's being asked
• Ask for clarification if question is unclear
• Take time to provide accurate answer rather than rushing
• Provide evidence to support your response when possible
• Don't volunteer information beyond the question

Common Audit Findings

Minor Findings

Issues that typically result in small adjustments:

• Rounding discrepancies: Inconsistent rounding of tonnage figures
• Incomplete documentation: Missing a few invoices but pattern is clear
• Classification uncertainties: Borderline material classifications
• Timing differences: Packaging purchased vs. used in different periods

Typical resolution: Fee adjustment (usually small), corrected records for future submissions

Moderate Findings

Issues requiring more significant corrections:

• Underreported tonnage: Missing packaging categories in reporting
• Incorrect modulation: Claiming favorable codes without adequate evidence
• Unsupported exemptions: Export or reusable claims lacking documentation
• Systematic misclassification: Consistent errors in material categorization

Typical resolution: Retroactive fee payment, revised reporting methodology, enhanced documentation procedures

Major Findings

Serious compliance issues:

• Intentional underreporting: Evidence of deliberate omission
• Fraudulent exemptions: False export or reusable claims
• Lack of records: Unable to support submissions with any documentation
• Repeated violations: Same issues found in multiple audits

Typical resolution: Substantial retroactive fees, penalties, increased audit frequency, potential enforcement action

Audit Outcomes

No Findings (Cleared)

Audit confirms compliance:

• No changes required
• Positive compliance record
• May reduce future audit risk
• Confirmation letter provided

Minor Adjustments

Small corrections needed:

• Fee adjustment calculated (may be increase or decrease)
• Updated records required for future
• Guidance provided on correct methodology
• No penalties applied

Significant Corrections Required

Substantial issues identified:

• Retroactive fees calculated for correction
• Payment deadline provided
• Corrective action plan required
• Follow-up audit may be scheduled
• Penalties may apply depending on circumstances

Non-Compliance Determination

Serious violations found:

• Enforcement notice issued
• Penalties applied
• Mandatory corrective actions
• Increased monitoring and audit frequency
• Potential legal proceedings in extreme cases

Responding to Audit Findings

Initial Response

When you receive audit findings:

1. Read the report carefully and completely
2. Ensure you understand all findings and calculations
3. Verify any fee adjustments are calculated correctly
4. Identify any findings you disagree with
5. Note deadlines for response or payment

If You Agree with Findings

1. Acknowledge receipt of audit report
2. Confirm agreement with findings
3. Pay any additional fees by deadline
4. Implement corrective actions
5. Update internal procedures to prevent recurrence
6. Document changes made

If You Disagree with Findings

1. Respond within specified timeframe
2. Clearly state which findings you contest
3. Provide additional evidence supporting your position
4. Request explanation of auditor's reasoning
5. Suggest alternative interpretation if applicable
6. Request meeting or call to discuss if needed

Appeals Process

If you cannot resolve disagreement with auditor:

1. Request review by senior EA officer
2. Submit formal appeal with supporting documentation
3. EA conducts internal review
4. Decision communicated in writing
5. Further appeal options may be available depending on issue

Post-Audit Actions

Implementing Improvements

Use audit findings to strengthen compliance:

• Update data collection procedures
• Enhance documentation practices
• Improve internal quality checks
• Train staff on findings
• Establish more rigorous verification processes

Preventing Future Issues

• Conduct annual internal compliance reviews
• Maintain audit-ready documentation year-round
• Stay current on regulatory guidance
• Seek clarification on uncertainties before submission
• Consider professional compliance support if needed

Working with Compliance Schemes During Audits

If you're a scheme member:

• Notify your scheme immediately upon receiving audit notice
• Scheme may provide support and guidance
• Some schemes attend audits or respond on your behalf
• Scheme may help gather documentation
• Coordinate all responses through scheme if they're managing audit

Key Takeaways

• EPR audits verify accuracy of reporting and fee payment
• Audits can be random or triggered by risk factors
• You typically receive 14 days' notice before document requests
• Most audits are desk-based, requiring digital document submission
• Maintain complete records including invoices, specifications, and calculations
• Be honest, responsive, and cooperative with auditors
• Minor findings are common and usually result in small adjustments
• You have right to dispute findings with additional evidence
• Use audit findings to improve internal compliance processes