Audit advises shared services for public utility districts

EPHRATA — A state performance audit of public utility districts in Grant, Chelan and Douglas counties recommends they share services in the areas of insurance, information technology and procurement.

They already share services in many other areas, according to the audit report.

The audit is required by voter-approved Initiative 900, which allows the state Auditor’s Office to complete audits of government agencies for citizens.

Grant PUD attends a Joint Legislative Audit and Review Committee meeting in Olympia on June 16 to provide comment on the state audit process.

A public hearing in Grant County is required and must be done in the next 30 days.

Grant PUD Commissioner Tom Flint said Monday he thought there were some good items in the audit, but commented about the amount of time it took to complete the work. It is appropriate for Grant PUD take time to attend the Olympia meeting and provide feedback.

Grant PUD Commissioner Bob Bernd said he was looking forward to the audit, but the process was “cumbersome.”

The district was about to have an independent audit done and had it deferred.

Grant County PUD Commissioner Greg Hansen said the district should look at lump sum change orders and overhead cost/profit mark-ups.

He also commented about the state’s remarks concerning Grant PUD’s fiber-optic program.

“Grant County PUD’s wholesale fiber-optic program, as currently structured, appears to be financially unsustainable,” according to the audit. “Due to the rural nature of the district’s service territory, wholesale fiber revenue is never expected to cover all of the district’s investments and expenditures of the program.”

“However, the commission expects that future revenue will cover all out-of pocket expenses and incremental investments based on the wholesale fiber business plan developed in 2008,” according to the report.

“It is really an eye-opener,” Hansen says. “It is a drain on our resources.”

In response, Bernd said PUD staff is going to return to the commission with reports on this process.

According to the PUD’s written response to the audit, commissioners will continue regular review and evaluation of the financial forecast for the fiber network, monitor areas where fiber was extended but with a low saturation rate and improved communications to increase customer awareness about the availability of high-speed Internet.

The PUD applied for $50 million in federal stimulus funding to provide fiber-to-the home and wireless services in March.

Grant PUD Commissioner Randy Allred said he was disappointed at the negative responses by the other PUDs.

For Grant PUD, the audit also examined the governance and strategic planning, contracts for construction, goods and services, span of control, line crew operations, asset management, general and administrative functions and the fiber-optic program.

To view the report, visit www.sao.wa.gov and click on “State Auditor reports on Mid-Columbia public utility districts.”