Capitol: CPUC Slammed for Budget Practice Shortfalls

By Published On: January 18, 2013

A state audit of the California Public Utilities Commission revealed significant budgetary problems. It noted only one employee handles 14 special funds. “As the custodian of ratepayer monies it is deeply concerning to learn that the CPUC lacks even basic duty statements for personnel assigned to budget positions,” stated Assemblymember Steven Bradford (D-Gardena), Utilities & Commerce Committee chair. In addition to staffing inadequacies, the Department of Finance audit released Jan. 10 noted it “observed general confusion and lack of knowledge by the Budget Office, program staff and management regarding the responsible parties for certain budget tasks.” It specifically noted that the commission’s budget reconciliation process for five of seven funds over $1 million was “inconsistent and inadequately prepared.” The commission was directed to develop a corrective action plan within 90 days of the audit’s release. The commission agreed with most of the audit’s findings. Commission executive director Paul Clanon took issue with the finding that the Division of Ratepayer Advocates failed to independently prepare its budget as required by state code. The commission, Clanon wrote in a Jan. 10 response to Finance, “respectfully disagrees. On the contrary, the statute appears to support the existing and longstanding practice of having DRA’s budget approved by the executive director.” The audit was released the same day as the governor’s proposed 2013-14 state budget proposal. The governor’s budget plan includes funding for additional positions in the commission’s budget office (Current, Jan. 11, 2013). The commission’s fiscal shortcomings, said to compromise its budget analysis, include problems in management, budget, and forecasting methodologies. “Deficiencies in CPUC’s monitoring practices could result in budget information that is misleading and unreliable. Further, if revenues or expenditure levels are not appropriately adjusted, negative and/or excessive fund balances may be falsely projected,” warned the audit. Part of the issue is linked to the growth of the commission’s administration of special funds. Those programs have grown from four to 14 since 2000. Bradford said he plans to “closely monitor the CPUC to ensure corrective action is taken, ratepayer monies are managed properly, and that the CPUC is fulfilling its constitutional and statutory duties to ratepayers, the Governor and this Legislature.” He also may introduce legislation to address the audit-identified shortfalls. The audit was in response to budget problems--albeit far more serious--found in a review of the Department of Parks & Recreation. Subsequently, Finance was directed to examine more than 500 state special funds.

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