To further its mission to obtain the lowest possible rates for reliable and safe utility service for ratepayers through its reviews of balancing accounts, Ratepayer Advocates should document the method used for its selection of balancing accounts to review.
ORA has revised its Audit Manual to provide staff with guidance to document the methodology applied for selecting balancing accounts to review when examining investor-owned utility financial records and documents. This practice will document why ORA has selected certain accounts and not others for review, consistent with its statutory mandate (PU Code Section 309.5). ORA will provide the State Auditor with the revised manual.
As described previously a Audit Guide was developed for use by ORA auditors based on the recommendation by the state auditor. I will be following this report with a letter describing implimentation history of the audit guide and enclose a copy of the guide for your review.
The audit guide that Ratepayer Advocates references in its response does not include the method it uses for selecting balancing accounts to review. Ratepayer Advocates did not provide additional documents to support its claim of full implementation.
Although Ratepayer Advocates provided an audit guide as support that it has implemented this recommendation, it did not provide its one-year response to this recommendation. However, it asserts that the audit guide it created addresses this recommendation.
We reviewed the audit guide that Ratepayer Advocates provided and found that the audit guide does not include requirements for its management or staff to document the method that Ratepayer Advocates used for selecting the balancing accounts to review.
ORA has developed an audit guide for use by internal auditors.
Ratepayer Advocates did not provide the audit guide it references to substantiate its claim of full implementation.
ORA is in the process of creating an audit guide to provide guidance on selection of balancing accounts for review. An internal draft guide has been prepared and is going through an internal review process with ORA's auditors and managers. I anticipate the guide to be completed within the next few weeks.
Agency responses received are posted verbatim.