Updated requirements for independent audits
The NSW Department of Planning, Housing and Infrastructure (DPHI) has released a revised set of independent audit (IA) post approval requirements for state significant projects. The requirements introduce a more structured and prescriptive framework for how audits are planned, approved, and delivered across the project lifecycle.
The updated requirements signal a clear shift toward tighter audit governance, greater consistency, and earlier engagement with DPHI. For proponents and project teams, understanding these changes is essential to maintaining compliance and avoiding unnecessary delays, as Principal – Auditing and Compliance Elliot Holland explains.
What’s changed?
More defined audit timing requirements
One of the most significant updates is the introduction of minimum and maximum timeframes for undertaking independent audits, unless alternative timing is specified in conditions of approval or agreed with DPHI.
Construction phase: Audits must occur within 4 to 12 weeks of commencement, and then at intervals no greater than 26 weeks.
Operation phase: Audits are required within 12 to 26 weeks of commencement, followed by audits at least every three years.
Suspension or cessation of operations: An audit must be completed within 52 weeks of notification, with subsequent audits at maximum intervals of one year.
These clearer benchmarks reduce ambiguity but will require more proactive planning to ensure audit windows are met.
Streamlined approach for staged projects
For projects with overlapping construction and operational phases, the revised requirements introduce a more practical approach. Only two initial audits are required – one covering both phases – before transitioning into the standard audit frequency.
There is also flexibility for combined audits covering concurrent phases, where approved by DPHI. This has the potential to reduce duplication and improve efficiency, particularly on large, staged developments.
Earlier engagement for auditor endorsement
Timing requirements have also been tightened around requesting auditor endorsement. Requests for DPHI endorsement of the auditor or audit team must now be submitted at least eight weeks prior to the end of the audit period.
This change reinforces the need to lock in audit teams early and build approval timeframes into project schedules.
Extended approvals for audit teams
The revised requirements allows for longer-term endorsement of auditors, but with clear limits:
During the construction phase, auditors may be endorsed for the full duration of construction.
During the operation phase, endorsement is limited to a maximum of three consecutive independent audits.
This provides some continuity, while still ensuring periodic review and independence.
Introduction of Lead Auditor performance oversight
A new performance review mechanism has been introduced for Lead Auditors. DPHI may initiate a review where there are concerns that audit reports are consistently failing to meet the revised requirements or the project’s conditions of approval. This adds an additional layer of accountability and places greater emphasis on audit quality and consistency.
What does this mean for project teams?
The 2026 revisions reflect a broader move toward standardisation and accountability in post-approval compliance. For proponents, this means:
more disciplined audit scheduling to meet defined timeframes
earlier procurement and engagement of auditors to allow for endorsement processes
greater focus on audit quality, given the potential for performance reviews
opportunities for efficiency through combined audits in staged projects
Projects that take a proactive approach toward embedding these requirements will be best placed to navigate the changes smoothly.
As with any regulatory update, the detail matters. Early planning, clear documentation, and strong coordination between project teams and auditors will be key to staying ahead under the revised framework.
