NRRI 79-11 COMMISSION ORDERED MANAGEMENT AUDITS OF GAS AND ELECTRIC UTILITIES


Version
Download 11
Total Views 0
Stock
File Size 320.00 KB
File Type unknown
Create Date July 1, 1979
Last Updated August 7, 2018
Download

prepared by THE NATIONAL REGULATORY RESEARCH INSTITUTE

JULY 1979

An increasing number of state regulatory commissions have ordered management audits of investor-owned utilities in their jurisdiction. In order to assess the usefulness of commission-ordered management audits as a regulatory tool, Institute staff contacted the state commissions to obtain information about current state practices and experience with management audits.
Information received indicated that 22 state commissions had ordered at least one management audit. The majority of the audits were conducted by independent auditing firms under varying degrees of state commission supervision. The purpose of the audits was to assess the effectiveness and efficiency of operation of a specific regulated utility_
Seventy percent of the state commissions with one or more completed management audits, expressed satisfaction with the results of the audit. Most improvements and audit recommendations were in the area of cost control and management improvement. Nearly all commissions reported the cost of the audit would be allowed ~s an operating expense for the utility. Final audit reports were in all but one case, available to the public.
Shortcomings expressed about management audits indicated a concern that the benefits would not outweigh the costs of the audit and the lack of adequate in-house'staff expertise. Increased training for commission staff was the greatest area of need expressed in order to increase the usefulness of management audits as a regulatory tool.

Leave a comment