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New Audit Reveals California PUC Misrepresented Funds

California’s Public Utilities Commission has a math problem: Its budget staff has been misreporting the balance in special funds the agency manages.  That’s the finding of a new state audit that blamed the mistakes on “general confusion and lack of knowledge.”  

The Public Utilities Commission manages 14 special funds that use monthly fees from consumers to pay for special programs like the Universal Lifeline telephone service for low-income Californians.   It turns out that in 2011, agency staff miscalculated how much those funds held.

“It created the appearance that there were more funds than there really were,” says DavidBotelho, who  heads the audit team at the Department of Finance.

The audit was launched after discrepancies of nearly a $500 million dollars were found between what the utilities agency reported to the Finance Department and what it reported to the state controller. 

The Universal Lifeline Account showed the largest difference, $158 million. Botelho says the Commission staff lacked basic skills to forecast how much money ratepayer fees would generate, and how much the programs those fees support would cost.

“As they were forecasting over these last several years, they did not go back and use the actual data that had been experienced, after the fact, they just continued building their estimates on previous estimates,” says Botelho. 

The Department of Finance recommends that the legislature approve additional budgeting staff for the Public Utilities Commission. It has ordered the Commission to come up with a plan to fix the problems within 90 days. 

In a written response the Commission agreed with nearly all of the audits findings and said it’s already working to correct the problems.