Summary

The audit of the Public Service Commission (PSC) focused on the regulatory assessment fee (RAF) rate that primarily funds PSC’s regulatory operations and the Division of Consumer Affairs’ “Call Center” operations related to consumer assistance.  The audit included the period July 2001 through February 2003.

As summarized below, improvements need to be made by PSC management to ensure that regulatory costs are adequately funded and equitably distributed, audit resources are effectively expended, customer satisfaction measures are established, and legal provisions correspond to PSC’s regulatory authority and organizational structure.

Finding No. 1:  PSC management has not adjusted RAF rates over time for certain industries and sub‑industries.  Overall, this resulted in the accumulation of a significant cash balance in the Regulatory Trust Fund.  Additionally, the positive cash balances accumulated for certain sub‑industries have been used to subsidize industries or sub‑industries whose annual RAFs have not covered regulatory costs or that continue to experience annual deficit cash balances.

Finding No. 2:  In the event the PSC loses jurisdiction over significant water and wastewater utilities, the current maximum RAF rate allowed by law for funding water and wastewater utilities regulation may produce insufficient revenues to fund current regulatory costs, absent reductions in applicable regulatory costs.

Finding No. 3:  Improvements in accounting for employee work time would promote a more equitable distribution of regulatory costs to the industries or sub-industries.

Finding No. 4:  The Bureau of Auditing did not always employ a methodology for selecting companies for RAF audits that maximized the effective use of audit resources.

Finding No. 5:  Contrary to the Florida Customer Service Standards Act, the PSC has not developed a customer satisfaction measure as part of its performance measurement system and, consequently, has not provided statistical data on customer satisfaction measures to external users of annual reports or other performance publications.

Finding No. 6:  Certain provisions in Chapter 350, Florida Statutes, relating to railroads and the position of chief auditor no longer correspond to the Commission’s regulatory authority and organizational structure.  Additionally, the maximum regulatory assessment rates allowed are different than those specified in related statutes.

The Executive Director's written response to the audit findings and recommendations are included in the audit report on the Auditor General Web site.