It is not as if we needed further reason to question the capabilities of the California Public Utilities Commission, but the agency has obliged us nonetheless.
The same organization that prompted outrage over, among other things, its handling of the Pacific Gas & Electric natural gas fire in San Bruno that killed eight people now faces a disquieting audit conducted by the state Department of Finance. The audit revealed widespread accounting problems that, according to the executive summary, "compromises its ability to prepare and present reliable and accurate budget information."
That shortcoming would seem quite a hindrance to providing honest, transparent governance to the governed, especially for an agency that is charged with serving "the public interest by protecting consumers and ensuring the provision of safe, reliable utility service and infrastructure at reasonable rates, with a commitment to environmental enhancement."
The audit uncovered a total of about $450 million in differences between what the CPUC reported to the Department of Finance and what it reported to the State Controller's Office in seven of the 14 accounts administered by the agency.
Our math skills might not be much better than the CPUC's, but even we can understand that seven out of 14 is half of the accounts. Half. We find that alarming to say the least. And we understand high finance well enough to know that $450 million is a tad more than
This audit stems from the now famous discovery last July that the state Department of Parks and Recreation had been sitting on millions of dollars of unreported funds in its special accounts. After that disclosure, Gov. Jerry Brown ordered fund-by-fund audits of more than 500 special funds.
This one listed as its major findings: ineffective management over budgeting functions; a need to improve forecasting methods, budget monitoring and fiscal management practices; appropriation adjustments not being equitably allocated among funds; and noncompliance with statutory requirements specific to the Division of Ratepayer Advocates.
The funds in question had various functions, but the biggest offender by far -- showing a reporting discrepancy of $158 million -- is the Universal Lifeline Telephone Service Trust Administrative Committee Fund.
For its part, the CPUC mostly agrees with the audit's findings.
"The audit correctly identifies that the primary issue the CPUC must address is that its management practices over the budget functions were ineffective," the agency said in its formal response. "All subsequent observations stem from this shortcoming."
Well, yeah, that is sort of the point.
The response went on to say, "The CPUC is committed to ensuring that all of our staff can perform their duties effectively and efficiently and to providing the proper training to make that happen."
We guess we should be grateful for that, but we remain skeptical. The agency has until April 24 to submit a plan that will supposedly show that the agency's words are more than platitudes. It must be a plan to dramatically increase controls, accuracy and accountability of these funds. Anything less is simply unacceptable.