Shorter deadline for audit reports: German Federal Network Agency and state regulatory authorities repeal operative provision no. 7

On November 25, 2019, the German Federal Network Agency has issued specifications containing requirements for the preparation and audit of annual financial statements and activity reports of vertically integrated energy supply companies and legally independent grid operators. These specifications apply both to the company’s own area of responsibility and, within the scope of the intergovernmental loans, to the respective areas of responsibility of the federal states of Berlin, Brandenburg, Bremen and Schleswig-Holstein. The State Regulatory Authority of Baden-Württemberg (LRegB BW) also issued such a specification in 2015.

Operative provision no. 7: Deadline for submitting the audit report 
Section 7 of these provisions stipulates that the addressees must submit the audit report and supplementary volumes to the German Federal Network Agency immediately after the annual financial statements have been adopted and no later than eight months after the end of the financial year or no later than nine months after the end of the financial year to the LRegB BW.

BGH decision: Regulatory authority not authorized to specify the deadline
However, in its decision of December 19, 2023 the BGH ruled that the regulatory authority is not entitled to specify the deadline for sending the audit report on the annual financial statements.

Based on this decision by the BGH, in September, the Federal Network Agency decided to repeal operational provision no. 7 of the specifications. On October 4, 2024, the LRegB BW followed suit and decided to partially repeal operational provision no. 7. Previously, the state regulatory authority of Saxony-Anhalt and the regulatory chamber of Mecklenburg-Western Pomerania had also decided on a corresponding partial repeal.

New deadline: audit report must be submitted earlier
Therefore, if the annual financial statements are adopted before August 31 or September 30 of the following year, the audit report, including the report on the specified audit procedures, must be submitted to the Federal Network Agency or the Baden-Württemberg state regulatory authority at an earlier date than previously. This in turn means that the specified audit procedures must also be performed by the auditor before the annual financial statements are adopted.