Audit says PUD cooperation would save money
Tuesday, May 25, 2010
WENATCHEE — A first-ever state “performance” audit of the Chelan, Douglas and Grant County PUDs concluded the utilities could save money by combining purchasing, computerized data services, real estate functions and administrative services.
Auditors suggested that by using a single individual to oversee all three utilities’ insurance policies and by combining insurance brokers the PUDs could collectively save nearly $500,000 annually in reduced personnel and policy costs.
Audit results also include a suggestion that all three could save a combined $4.6 million annually by purchasing together such common supplies as poles, fiber cable and large vehicles.
The firm Thompson, Cobb, Bazilio & Associates performed the audits between early September 2008 and mid-May 2009 under contract with the state Auditor’s Office.
Initiative 900, approved by state voters in 2005, gives the Auditor’s Office the authority to launch performance audits to ensure government agencies are accountable in their business practices and, in the case of agencies that receive tax revenue, use that revenue efficiently.
The region’s PUDs don’t receive tax revenue, but may receive state or federal grant funding for some projects.
The audit covered the three-year period from 2006 through 2008.
The report, released by the auditor May 19, contains the audit results of all three PUDs.
Officials from all three North Central Washington utilities commented in the report that PUDs already seek to combine efforts where possible.
But they also point to differences in their management hierarchies, elected boards of commissioners, relative size and unique circumstances to merit their own staff and procedures.
All said they’re continuing to work to look for new ways to share services and save money. They expressed some doubt that savings in the proposed areas would be as high as auditors suggest.
Auditors also examined the utilities’ management and organization, operations, purchasing and management of construction projects.
The report doesn’t compare one utility with another, but the audits of each utility are included in a single report.
The Chelan PUD scored high marks — four commendations — for “governance,” a category that includes planning for the future, the relationship between commission and staff, goal setting and progress in achieving goals, the effectiveness of chains of command and employee performance tracking.
It scored another two commendations for getting the most out of its equipment and some employee spending practices.
Grant County PUD earned one commendation for tracking its employee performance. Douglas County PUD didn’t earn any commendations.
The audit gives each utility dozens of recommendations for increasing efficiencies.
Utility responses range from explanations of how they’ve already put some of the recommendations into practice to disagreement with the benefits claimed by the auditors or how the auditors calculated benefits.
Kara Klotz, spokeswoman for the Auditor’s Office, said the audits only identify ways to improve efficiencies.
Utilities aren’t obliged to put the recommendations into practice, but must submit a report to the Auditor’s Office by July 1 of every year detailing which recommendations they’ve adopted, which they haven’t adopted and why.
“We don’t hold them accountable. We’re not an enforcement agency,” Klotz said. “No government authority will hold them accountable. The only requirement is that they report.”
The Auditor will post the results of the utility’s annual presentations on its website, she said.
The audit may be repeated in future years, but is not on a regular schedule, she said.
Christine Pratt: 665-1173
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