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State audit rips Calif. Public Utilities Commission

January 17, 2013 12:00:00 AM PST
A state finance department audit found the California Public Utilities Commission spent more money than it reported to officials, and made several fee errors that victimized consumers.

If you have a cellphone or receive utility bills for electricity, gas or cable, then you pay a laundry list of fees and surcharges that go to the state 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 service for the disabled or deaf Californians.

"As both ratepayers and taxpayers, we want to make sure 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 the expenditures, at all times," said David Botelho, chief auditor at the Department of Finance.

Auditors found widespread budget errors. General confusion and lack of knowledge led to the reporting of $400 million that actually didn't exist. Poor forecasting techniques led to less money collected than anticipated in a fund for subsidized telephone service for rural areas.

In one instance, a worker committed an $81 million typo.

State Senator Jerry Hill (D-San Mateo) has been pressuring the state PUC for years to change what he calls its complacent ways.

"Lousy bookkeeping is what's going on," said Hill.

Since the 2010 San Bruno pipeline explosion, 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 in the right place. We don't know if they're spending more than they should, less than they should," said Hill. "The problem is that it's, again, our money that they can't account for."

The CPUC declined to be interviewed, but in a formal response to the Department of Finance, it 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.

Governor Brown has penciled in $200,000 more for the CPUC to hire three more budget people to help keep the finances in order.

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