Scathing audit finds widespread errors at CPUC


If you have a cell phone or receive utility bills for electricity, gas, or cable, then you pay a laundry list of fees and surcharges that go to the California Public Utilities Commission. A new scathing audit by the California Department of Finance rips how the commission is poorly tracking and ultimately spending those monies that go into 14 special funds that pay for things like phone services for disabled or deaf Californians.

"As both ratepayers and taxpayers, we want to assure that the amounts that we're paying in these rates are for their intended purposes, that they can be accounted for properly, both the revenues and expenditures at all times," California Department of Finance Chief Auditor David Botelho.

Auditors found widespread budget errors. General confusion and lack of knowledge led to the reporting of $400 million that actually didn't exist. Also, poor forecasting techniques led to less money collected than anticipated in a fund for subsidized phone service in rural areas. In one instance, a worker committed an $81 million typo.

"Just lousy bookkeeping is what's going on," State Senator Jerry Hill said. He has been pressuring the state PUC for years to change what he calls its complacent ways. Since the San Bruno pipeline explosion in 2010, he has criticized how lax the commission is in regulating utility companies and how cozy the CPUC Chairman is to the companies he regulates.

And now, budget discrepancies. "We don't know if they're going to the right place. We don't know if they're spending more than they should, less than they should. The problem is that, again, it's our money that they can't account for," Hill said.

The CPUC declined to be interviewed but in a formal response to the Department of Finance, they basically agreed to almost every finding and promised to correct the problems. The audit found that despite the discrepancies, the commission avoided going into the red in most cases. Gov. Jerry Brown has penciled in $200,000 more for the CPUC so it can hire three more budget people to help keep the finances in order.

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