The state of California identified “significant weaknesses” crippling the California...
The state of California identified “significant weaknesses” crippling the California Public Utilities Commission’s budgeting processes, the finance department said in an audit. Gov. Jerry Brown (D) requested the review last July after special fund reporting discrepancies were uncovered, the audit…
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said. It slammed ineffective management, poor forecasting methodologies, subpar budget monitoring and appropriations adjustments as well as a lack of compliance with the Division of Ratepayer Advocates’ statutory requirements. The CPUC oversees millions in telecom funds, administering Lifeline, high-cost support and other benefits, which the audit scrutinized. The CPUC tried to reconcile large discrepancies in its fund accounts starting last August but has fallen short: “CPUC’s fund condition statement reconciliation process for the seven funds [out of 14 funds administered total] with $1 million or greater variances [between the State Controller’s Office and Finance records] as of June 30, 2011, lacked sufficient instructions from CPUC management, resulting in inconsistent and inadequately prepared reconciliations for five of the seven funds.” It identified staff shortfalls and found “general confusion and lack of knowledge by the Budget Office, program staff and management regarding the responsible parties for certain budget tasks.” There’s poor communication, coordination and training as well as outdated duty statements and limited written policies, it added. Some predictions lack “viability” or basis, the audit noted: “A fund forecasted approximately $33 million in fiscal year 2012-13 and $64.8 million in fiscal year 2013-14 for wireless services expenditures that lacked a specific timeframe for implementation.” Auditors discovered an $81-million typographical error in a fund forecast, which has now been corrected. The audit includes responses from the CPUC, dated Jan. 8, that acknowledge failings: “Some of the inaccuracies in the forecasting for the telecommunications public purpose funds are attributable to the fact that the policy approaches to many of the programs have changed significantly over that time period, with the budgets attempting to anticipate the potential policy changes to the programs,” Executive Director Paul Clanon explained. He agreed that there’s management problems and better procedures needed and said the CPUC has begun “mapping out our corrective answers” in response to the audit. He expects “all recommendations to be accomplished” by the end of 2013, he said. The CPUC declined comment beyond these answers. The audit ordered a corrective plan from the commission within 90 days.