Report 2012-118 All Recommendation Responses

Report 2012-118: California Public Utilities Commission: Despite Administrative Weaknesses, It Has Generally Awarded Compensation to Intervenors in Accordance With State Law (Release Date: July 2013)

Recommendation #1 To: Public Utilities Commission

To prevent intervenors from expending resources in proceedings where they are ineligible to receive compensation, the commission should comply with state law by issuing within 30 days preliminary rulings concerning an intervenor's eligibility, when required to do so.

60-Day Agency Response

The Administrative Law Judge (ALJ) Division has documented and implemented procedures to ensure that a preliminary ruling is issued within 30 days after filing of notices of intent to claim compensation (NOIs), if required. A copy of the procedures memo is has been submitted to aaronf@auditor.ca.gov.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #2 To: Public Utilities Commission

The commission should determine the cause of its lack of compliance with state law requiring it to issue award decisions within 75 days of the date an intervenor submits a compensation claim, and it should determine what actions to take to rectify the problem. The commission should ensure that it has sufficient information, such as detailed tracking information regarding claims, to identify where in the process delays are occurring. If the commission determines that the current 75-day statutory period is unreasonable, it should seek a change in state law.

Annual Follow-Up Agency Response From October 2019

The Commission continues to track each Intervenor Compensation claim to remain aware of the status and timeliness of the claim. We have determined that the crucial element in meeting the statutory timelines is personnel resources. The ICOMP unit (which analyzes, checks, and makes recommendations on ICOMP requests) and the ALJ Division STAR unit (which produces and publishes ICOMP decisions) are staffed appropriately for processing the claim volume received by the Commission, we can meet the timelines, absent unusual circumstances. If either the ICOMP or STAR units are not fully staffed, there is a significant risk of falling behind. Currently, ICOMP and STAR units are fully staffed though 60% of ICOMP staff have been in their current role for less than 4 months

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2018

The Commission has instituted tracking and reporting systems for intervenor compensation matters that allow the intervenor compensation (IComp) unit to be aware of the status and timing of all intervenor compensation matters. We have determined that the crucial element in meeting the statutory timelines is personnel resources. When the IComp unit (which analyzes, checks, and makes recommendations on IComp requests) and the ALJ Division STAR unit (which produces and publishes IComp decisions) are at full strength, we can meet the timelines, absent unusual circumstances. If either IComp or STAR units are not fully staffed, there is a significant risk of falling behind. Currently, IComp unit is fully staffed but STAR unit is not. CPUC will provide statistics demonstrating improvement regarding compliance.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From November 2017

The Commission has instituted tracking and reporting systems for intervenor compensation matters that allow the intervenor compensation (IComp) unit to be aware of the status and timing of all intervenor compensation matters. We have determined that the crucial element in meeting the statutory timelines is personnel resources. When the IComp unit (which analyzes, checks, and makes recommendations on IComp requests) and the ALJ Division STAR unit (which produces and publishes IComp decisions) are at full strength, we can meet the timelines, absent unusual circumstances. If either IComp or STAR units are not fully staffed, there is a significant risk of falling behind. Currently, IComp unit is fully staffed but STAR unit is not.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Annual Follow-Up Agency Response From October 2016

Last year, the CPUC reported that it fully implemented this recommendation and in doing so, (1) had substantially reduced the backlog of pending claims and (2) was beginning to resolve claims within 75 days of filing. The CPUC noted that, because it handles claims on a "first-in-first-processed" basis, the backlog would have to be substantially reduced before the CPUC would be able to consistently resolve claims within 75 days. The CPUC has largely eliminated the backlog of pending claims and is now timely resolving most claims within 75 days of filing. State Audit Report 2012-118 found that, from 2008 through 2012, the CPUC awarded funds within 75 days for only 6% of the claims submitted during the five-year audit period. By comparison, from January 2016 through September 2016, 36 of 66 award decisions (54.5%) were decided within 75 days. Going forward, the CPUC expects to continue increasing the proportion of award decisions issued within statutory timeframes. For example, in September 2016, 8 of 10 decisions (80%) were 75 day compliant. There are currently 62 claims pending (22 of these were filed in August 2016) and most of these are expected to be timely resolved. However, some older claims are delayed indefinitely while the CPUC's Appellate Section or the Courts consider appeals of award decisions on challenged claims with similar fact patterns or while the CPUC implements Court-ordered changes on remand. The CPUC requests that the State Auditor find that the CPUC has fully implemented this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although the CPUC has made progress in issuing award decisions within 75 days of the date an intervenor submits a compensation claim, it has only resolved 55 percent of claims within 75-days thus far in 2016. While this constitutes an improvement from the 6 percent of claims awarded within the time frame in 2015, the CPUC has only just begun processing some claims in a timely manner.

In addition, a backlog of 34 claims still exists. Some of these claims are 22 months past the 75-day deadline. Although the CPUC points out that six of these claims are on hold due to appeals or while it implements a rehearing decision, the CPUC provided no justification for why the remaining 28 could not have been awarded within the time frame established by state law.

Annual Follow-Up Agency Response From October 2015

The Commission (CPUC) believes that it has fully implemented this recommendation. The CPUC has determined the cause of its lack of compliance with state law requiring it to resolve claims within 75 days of filing (See 60-day status report), and implemented actions to rectify the problem (See 60-day, 6-month and one-year reports). The CPUC has increased intervenor compensation staff support to more quickly reduce/eliminate the current backlog, and implemented detailed tracking of claims to identify processing delays. The CPUC handles claims on a "first-in-first-processed" basis and, as a result, the backlog must be substantially reduced before the CPUC will be able to consistently resolve claims within 75 days. However, the backlog has been substantially reduced, and the CPUC is beginning to resolve some claims within 75 days. During the one year period since our last report on October 6, 2014, the CPUC resolved 62% more claims than for the same period in 2013-2014 (162 vs. 115), and has reduced the number of pending claims by more than half (from 131 to 49). By maintaining the current level of staff support, the CPUC anticipates that it will be able to eliminate the backlog of claims within the next year and thereafter be able to consistently resolve most claims within 75 days. This progress demonstrates that our efforts to implement this recommendation have been successful. Therefore, the CPUC requests that the State Auditor find that the CPUC has fully implemented this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although the Commission has taken steps since our report was released to better understand where delays in the award decision process had occurred and has taken concrete steps to reduce its backlog of outstanding claims, it is still not consistently issuing decisions within 75 days, as required by state law. Information available on the Commission's website shows that the Commission has made progress in reducing the backlog of intervenor compensation claims awaiting decisions between March 2015 and September 2015. The backlog of intervenor compensation claims has fallen from 129 to 55 during that time. in September 2015, the Commission reported that 47 of the 55 claims had been awaiting award decisions past the 75-day period allowed by state law, and three had been awaiting decisions for over a year. The Commission acknowledges that it is beginning to resolve some claims within 75 days and that within the next year it will be able to eliminate the backlog and consistently resolve most claims within the deadline after that. We will continue to monitor the Commission's actions to ensure it begins complying with state law by issuing award decisions within 75 days of the date an intervenor submits a compensation claim.

Annual Follow-Up Agency Response From October 2014

The Commission (CPUC) believes that it has fully implemented this recommendation. The CPUC has determined the cause of its lack of compliance with state law requiring it to issue award decisions within 75 days of the date a compensation claim is submitted (See 60-day status report), and determined the actions to take to rectify the problem (See 60-day, 6-month and one-year reports). The CPUC has implemented detailed tracking of claims and can identify where in the process delays are occurring (See 6-month status report). Data shows that it currently takes about 40 hours to process a claim. Therefore, once the backlog of claims is cleared, most claims should be easily resolved within 75 days. The modified process implemented in July 2014 is further reducing the time for processing a claim. From July through September 2014, the CPUC prepared 27% more draft decisions (28 vs. 22) and resolved 14% more claims (25 vs. 22) than for the same period in 2013. The CPUC has increased staff support to more quickly reduce/eliminate the current backlog. The CPUC Legal Division analyzed the OIA proposal to delegate authority to the Executive Director and advised that such authority cannot be delegated without specific statutory authority. Because the CPUC will be able to resolve most claims within 75 days once the backlog of claims is cleared, the CPUC will not pursue legislation on this matter at this time. Therefore, the CPUC requests that the State Auditor find that the CPUC has fully implemented this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although the Commission has taken steps since our report was released to better understand where delays in the award decision process had occurred and increased staffing to assist in reviewing intervenor compensation claims, we found that a substantial backlog of claims still exists. In fact, information available on the Commission's website shows that the number of compensation claims awaiting decisions has remained relatively constant between September 2014 and March 2015. The backlog of intervenor compensation claims has ranged from 105 to 129 during that time. In addition, in March 2015, the Commission reported that 84 claims had been awaiting award decisions past the 75-day period allowed by state law, and 38 of the 84 had been awaiting decisions for over a year. We will continue to monitor the Commission's actions to ensure it begins complying with state law by issuing award decisions within 75 days of the date an intervenor submits a compensation claim.

1-Year Agency Response

The Commission conducted a preliminary analysis of the cause of noncompliance and authorized hiring a consultant to make recommendations to reduce claim processing time (See 60-day and 6-month status reports). In February 2014, the Commission requested offers but received no bids, so the Commissions Office of Internal Audits (OIA) undertook the process improvement effort. Among other things, the OIA proposed to delegate authority to the Executive Director (ED) to approve claims that meet certain criteria and this matter is undergoing further legal review and may require legislative action.

The OIA also worked with the Administrative Law Judge (ALJ) Division to develop a modified process using interns to handle ministerial/clerical portions of claims while IComp staff and judges perform more complex work. The ED also authorized hours for three retired judges (annuitants) to help with claims. The modified process began in July and is expected to reduce but not eliminate pending claims. The ALJ Division also redesigned program forms and instructions to clarify guidance and help speed claim processing. The Commission will monitor these efforts to determine if a change in state law is needed.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

The commission is still reviewing the the OIA proposal to delegate authority to the Executive Director to approve certain claims. In addition, the commission has not yet determined whether the modified process begun in July 2014 will reduce the time it takes to process a claim.

6-Month Agency Response

The CPUC has taken the following steps to reduce the time for processing award requests:

The Intervenor Compensation Program (IComp) staff now monitors filings pending action by the CPUCs Docket Office (DO) for newly-filed award requests. The IComp staff coordinates with the DO to promptly accept or reject these filings. Due to the large number of filings pending action by the DO, award requests previously waited processing by the DO for several weeks;

An IComp staff member now coordinates with the STAR Unit (the ALJ Divisions document preparation staff) and, if necessary, prepares draft IComp proposed decisions (PDs) for internal distribution/review, filing and publication. This change reduces the time by several days or weeks IComp PDs await processing by STAR.

All Administrative Law Judges have been assigned additional claims and asked to address these requests as expeditiously as their other priorities permit.

During 2013, the CPUC issued almost twice as many award decisions than in 2012 (89 decisions in 2013 vs. 48 decisions in 2012). Although the number of award decisions issued in 2013 has significantly increased, almost as many award requests were filed during this period. However, the CPUC is making progress in reducing the number of pending requests. The number of pending award requests has been reduced from 137 in April 2012 to 103 in January 2014.

The CPUC is continuing its efforts to streamline the processing of award requests in ways that do not compromise the quality of the analysis for determining the reasonableness of IComp claims. In September 2013, the CPUC authorized the hiring of an outside consultant to review the IComp Program and related processes, and make recommendations for significantly reducing the processing time of awards while providing the appropriate level of review. The CPUC is finalizing a draft request for offers and plans to it in the near future. The CPUC will report on this effort in the next status report.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The ALJ Division has examined the award request review process to determine the reasons for the long delays, and prepared the document titled, "Steps and Timeframes for Processing Intervenor Compensation Requests" (Slide No. 9 of the Preliminary Study Report). The Preliminary Study Report has been submitted to aaronf@auditor.ca.gov.

The ALJ Division has also analyzed more than 1300 award requests to determine the Commission's historical performance and compliance with the 75-day deadline. A copy of the study has been submitted to aaronf@auditor.ca.gov.

There are currently approximately 94 award requests pending completion. All of these requests have been assigned (approximately three to each ALJ) with the directive to process these requests by December 31, 2013. However, work on these requests must be integrated with work on other assigned matters that also have statutory deadlines (many of which are high priority), and must be prioritized accordingly. Therefore, completing the processing of these requests by year end is uncertain.

The ALJ Division is exploring ways to further streamline the process, with the expectation that process changes will help to reduce (but not eliminate) the number of pending requests. In addition, implementing other audit recommendations will add steps (and time) to the review process. Even if the award request review process is significantly shortened, at current resource levels the backlog of pending requests (and lengthy delays) will likely continue into the foreseeable future.

On September 5, 2013, the Commission authorized the Executive Director to hire an outside consultant(s) to review the Intervenor Compensation and related processes. The consultant(s) should make concrete recommendations for improvements of the process, with an emphasis of information technology solutions, as well as recommendations on incremental resources.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Recommendation #3 To: Public Utilities Commission

To ensure that utilities and commission staff pay the correct amount of interest to intervenors, the commission should complete its effort to develop and distribute a methodology for calculating reasonable interest on compensation decisions issued after the 75-day deadline. The commission should follow the new procedure to ensure that it calculates interest payments appropriately. To the extent reasonable, the commission should recoup the interest overpaid to intervenors.

6-Month Agency Response

The Commission has taken action to recover interest overpayments to intervenors. On November 12, 2013, the Commissions Fiscal Office sent letters to nine intervenors that were overpaid a total of $41,903.00 in interest from the Commissions Intervenor Compensation Program Fund. Copies of these letters have been submitted to aaronf@auditor.ca.gov. As of this report, six of the nine intervenors have repaid $15,334.42 in interest overpayments.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

In June 2013, the ALJ Division surveyed the methods that utilities use to compute interest on compensation awards. On August 6, 2013, the ALJ Division published for public comment Draft Resolution ALJ-294 recommending guidelines for computing interest on approved claims and, on September 5, 2013, the resolution was adopted. A copy of Resolution ALJ-294 has been submitted to aaronf@auditor.ca.gov.

The ALJ Division worked with the Commission's Fiscal Office to establish written procedures for computing interest on approved claims using the same method adopted by Resolution ALJ-294. A copy of the ALJ Division's procedures memo has been submitted to aaronf@auditor.ca.gov.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

The commission has created a methodology and corresponding procedure for calculating reasonable interest on compensation decisions issued after the 75-day deadline. However, the commission's response does not address whether it has made any attempt to recoup the interest overpaid to intervenors.

Recommendation #4 To: Public Utilities Commission

To ensure that it has reliable information concerning its compensation decisions for internal and external reporting, the commission should implement procedures to ensure the accuracy of its award database.

1-Year Agency Response

This recommendation has been fully implemented as reported in the 6-month status report.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

As of December 1, 2013, the Intervenor Compensation Program database (database) was restructured to track additional intervenor request information and NOI information to permit end-to-end tracking of intervenor participation. Procedures have been implemented to regularly update and verify the accuracy of input data. A copy of the procedures for updating and verifying data has been submitted to aaronf@auditor.ca.gov.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

60-Day Agency Response

The ALJ Division has taken the following steps to ensure the accuracy of its award database:

1. The ALJ Division has compiled more than 1300 intervenor compensation claims and related decisions using information from the Commission's Case Information System, bound volumes of decisions, and hard copy and digitized decision archives. A quality assurance review of this data is currently underway to ensure 100% accuracy.

2. The ALJ Division is restructuring the format of the awards database to include NOI information for more complete "end-to-end" tracking of intervenor participation, and will be implementing the restructured database during the coming months.

3. The ALJ Division added staff to perform quality assurance review of data entered into the database, and is establishing written procedures for performing quality assurance reviews (the draft procedures memo has been submitted to aaronf@auditor.ca.gov).

4. On August 8, 2013, the ALJ Division obtained a copy of corrected database information prepared by the State Auditor and will use this information to cross-check the accuracy of data in the database.

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Recommendation #5 To: Public Utilities Commission

To comply fully with state law, the commission should conduct a comprehensive market rate study and update it periodically.

Annual Follow-Up Agency Response From October 2019

This contract has been active since summer 2018. All of the deliverables have been completed, including an Intervenor Workshop, Rate Chart, Escalation Methodology, Draft Market Rate Study, and Final Market Rate Study. The IComp Unit will implement the results of the market rate study for 2020 rates and any remaining time on the contract with Level 4 Ventures will be used to support the provided products and their implementation.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2018

This contract has been approved and has been implemented with Level 4 Ventures.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Based on its response, the commission has entered into a contract to complete the recommended study, but it has not yet completed the study. The department has also not demonstrated that it has any plans to update this information periodically.

Annual Follow-Up Agency Response From November 2017

ALJ Division is working with the Commission's Contracts unit on a contract for a consultant to conduct a market rate study in 2018. The scope of work for the study has been drafted and the contract is being developed.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Annual Follow-Up Agency Response From October 2016

On March 26, 2016 the Commission held a workshop with intervenors. The workshop directly addressed the Commission's need to undertake a comprehensive market study. A copy of the workshop agenda has been submitted to aaronf@auditor.ca.gov. In the upcoming year, the Commission will issue, so long as funds are made available for this purpose, a request for proposal (RFP) in order to conduct the comprehensive market rate study and subsequent updates. Once completed, the Commission will be in full compliance with state law, and Section 1806 of the Public Utilities Code, on this matter. The CPUC will continue to evaluate the availability of funds and its budget constraints along with other statutory obligations as it seeks to implement this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From September 2015

The CPUC cannot fully implement the State Auditor's recommendation to conduct a periodically updated comprehensive market rate study until such time that funds are available for this purpose. The CPUC will continue to evaluate the availability of funds and its budget constraints along with other statutory obligations as it seeks to implement this recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented

Annual Follow-Up Agency Response From October 2014

Prior to 2005, the Commission (CPUC) considered the market rates paid to persons of comparable training and experience who offer similar services (as required by PU Code section 1806) on a case-by-case basis by comparing attorneys'/experts' skill, expertise, and years of experience to those awarded compensation in other proceedings. Due to weaknesses of the case-by-case approach, in 2005, the CPUC set hourly rate ranges based on data provided by the major utilities but this effort had significant limitations. Since 2005, the CPUC has periodically updated these hourly rate ranges by means of a cost-of-living adjustment (COLA) because of the cost and difficulty of performing more extensive updates to hourly rate ranges. The December 2013 workshop participants considered alternatives but were not able to develop a complete proposal for periodically updating hourly rates. Workshop participants continue to recommend a more thorough market study but agreed to biennial COLA adjustments during the immediate future. The Commission previously considered proposals to use a professional recruitment consultant to perform a compensation study. However, the proposals have not been implemented due to lack of funding. The CPUC does not have funds to undertake a thorough market study at this time and must continue using COLA adjustments to update hourly rate ranges. The CPUC cannot fully implement the State Auditor's recommendation to conduct a periodically updated comprehensive market rate study until such time that funds are authorized for this purpose.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

Although the commission has taken some preliminary steps to conduct a market rate study, it has yet to adopt the final proposal for obtaining and maintaining rates paid to persons of comparable training and experience who offer similar services and has not yet fully complied with state law in this matter.

1-Year Agency Response

On December 2, 2013, the Commission held a workshop, among other things, to consider ways to conduct and periodically update market rates for intervenors. The workshop initiated an informative dialogue with intervenors and resulted in draft proposals for addressing market rates. On February 26, 2014, the Commission issued a Draft Workshop Proposal and intervenors filed comments on the draft proposal. A final proposal is anticipated in the Fall of 2014. The final proposal is expected to establish a method for obtaining and maintaining rates paid to persons of comparable training and experience who offer similar services, consistent with the requirements of Section 1806. These steps will bring the Commission into full compliance with state law on this matter.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Because the commission has yet to adopt the final proposal for obtaining and maintaining rates paid to persons of comparable training and experience who offer similar services, the commission has yet to fully comply with state law in this matter.

6-Month Agency Response

On December 2, 2013, the Commission held a workshop to consider ways to conduct a comprehensive market rate study and update it periodically. The goals of the workshop were: (1) review the State Auditors recommendations; (2) thoroughly explain an ALJs review process of an intervenor compensation claim; and (3) consider proposals for updating hourly rate ranges, conducting benchmark studies and performing cost of living adjustments. Nineteen intervenors participated in the workshop in person and telephonically.

The Commissions next steps are to issue a draft proposal (developed through input during the workshop) in February 2014 proposing a process for performing an annual review of rate ranges. Intervenors will have an opportunity to comment on the draft proposal. Following comments, the ALJ Division will issue a draft resolution for Commission approval of the final annual rate review process.

A copy of the workshop agenda has been submitted to aaronf@auditor.ca.gov.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The ALJ Division has designated an ALJ to conduct an informal workshop with intervenors and planning is currently underway. We expect the workshop to take place in November 2013. The workshop, among other things, will continue the efforts from the November 2012 workshop to reach consensus on how to proceed with developing updated attorney/expert market rates.

Once a concensus among intervenors is reached, the ALJ Division will prepare a formal decision addressing hourly rates and any other matters which would be issued by April 2014.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #6 To: Public Utilities Commission

Commission staff should complete their effort to develop formal procedures to verify and document the qualifications of intervenors' attorneys and experts. The commission should implement the new procedures to ensure that it awards intervenors an appropriate hourly rate based on verified qualifications.

1-Year Agency Response

In addition to the vetting of attorneys, experts and advocates through the Commissions hearing process, the Commission has implemented procedures for verifying and documenting the qualifications of intervenors attorneys, experts and advocates. Current resumes for each claimed attorney/expert/advocate are required as a part of intervenors requests, and claims must include attorneys state bar license number and history/status. Staff conducts a careful desk review of these resumes to determine years of experience and years appearing before the Commission on which hourly rates will be based. Attorney information is verified by checking state bar web sites for admission date and any actions affecting eligibility.

The employment history of experts and advocates appearing before the Commission for the first time is verified via web-based research by checking websites of companies listed on resumes for experts/advocates biographies or other confirming information. In addition, Google searches of the experts/advocates and publications listed on resumes are performed. Staff spends approximately two hours performing verifying the experience of each new expert /advocate. Staff maintains a list of the attorneys, experts and advocates verified and the method used to perform the verification.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The CPUC previously reported that it documented and implemented procedures for verifying attorneys and experts qualifications, and submitted its written procedures. The CPUC also revised the Intervenor Compensation Program Guide and Instructions in August 2013, and the request/decision template to collect additional attorney information. This information fully implemented the State Auditors recommendation on procedures for verifying attorney qualifications. However, the State Auditor requested further action on procedures to verify experts qualifications, and considers this recommendation to be partially implemented.

Rule 13.8 of the CPUCs Rules requires experts to include in testimony a statement of their qualifications. The CPUCs evidentiary hearing process permits parties to conduct Voir Dire, where expert witnesses are cross-examined by opposing parties about their qualifications before presenting their opinion testimony. The CPUC believes this process is more effective than a desk review for verifying an experts qualifications because experts are (1) under oath, (2) subject to cross examination by parties and examination by the judge, and (3) are subject to substantial penalties or imprisonment if they are found to have made false statements, pursuant to Rule 1.1 and PU Code 2111 and 2112.

The hearing process ensures an accurate account of a witnesss credentials because the prospect of public exposure and substantial penalties or imprisonment for presenting false information effectively discourages experts from exaggerating/falsifying credentials. Nevertheless, the CPUC is exploring ways to further verify experts qualifications without increasing claim processing time. These include conducting online research on experts not previously appearing before the CPUC or telephone calls to employers listed on an experts resume. The CPUC will test these approaches and report on this effort in the next status report.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

The ALJ Division has documented and implemented procedures for verifying and documenting intervenors' attorneys' and experts' qualifications (These procedures memos have been submitted to aaronf@auditor.ca.gov). The ALJ Division also revised the Intervenor Compensation Program Guide and Instructions, effective August 1, 2013, and the request/decision template (used by intervenors to submit claims) for additional attorney information (See pages 26 and 34 of Intervenor Compensation Program Guide and Instructions - submitted to aaronf@auditor.ca.gov).

California State Auditor's Assessment of 60-Day Status: Partially Implemented

Commission staff have taken steps to verify and document the qualifications of intervenors' attorneys. Staff have also created new procedures to ensure intervenors' experts are submitting information needed to document their relevant qualifications. However, commission staff have yet to implement a process to verify that experts actually possess those qualifications when they request an hourly rate for the first time.

Recommendation #7 To: Public Utilities Commission

To ensure that the commission complies with state law and does not inappropriately compensate intervenors, it should complete its effort to develop procedures for staff to routinely check whether an intervenor that represents the interests of small commercial customers who receive bundled electric service from an electrical corporation may have a conflict of interest arising from prior representation before the commission.

60-Day Agency Response

The ALJ Division has documented and implemented procedures for verifying that intervenors do not have conflicts (attached). The ALJ Division also revised the Intervenor Compensation Program Guide and Instructions, effective August 1, 2013, and the NOI/ruling template for information on conflicts (See pages 8 and 15 of Intervenor Compensation Program Guide and Instructions - submitted to aaronf@auditor.ca.gov).

California State Auditor's Assessment of 60-Day Status: Fully Implemented

Recommendation #8 To: Public Utilities Commission

The commission should work with intervenors through workshops or other means to clarify any confusion related to how it determines that work intervenors perform is reasonable.

1-Year Agency Response

The Commission has taken several actions to clarify program policies and procedures. In December 2013, the Commission held a workshop, among other things, to discuss with intervenors the Commissions current practices for determining the reasonableness of work performed by intervenors. This workshop allowed intervenors to ask questions, make recommendations and begin a productive dialog on several issues (workshop notes were provided to the State Auditor via email on February 4, 2014).

In addition to previously reported changes to the program web page to alert intervenors to recent developments and to provide other important information, the Commission redesigned the programs forms and instructions, updated and posted on the website approved intervenor hourly rates (now published in Excel for intervenors convenience). The Commission announced these changes via e-mail to the IComp service list. The Commissions Public Advisors Office (PAO) provides information and assistance to the public, including potential and current intervenors. The ALJ Division is working with the PAO to ensure the Commission provides clear, consistent and accurate program information. The ALJ Division also coordinates with the PAO to provide responses to more complex questions.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Although the commission's 6-month response indicated that the result of the workshop would include a document answering intervenors' frequently asked questions, the commission decided to focus on addressing intervenors' concerns by updating its program guide and other materials. Commission staff updated the program guide in May 2014 and have begun updating intervenor hourly rates on a bi-monthly basis.

6-Month Agency Response

As discussed above (Response to Recommendation No. 2), the ALJ Division held an Intervenor Compensation Workshop on December 2, 2013. Among other things, the workshop initiated a dialog with intervenors on how the Commission determines the reasonableness of intervenors work. The Commission is now considering intervenors comments and recommendations on ways to expand, improve, and standardize guidance to intervenors.

The intervenors will be provided an opportunity to comment on a draft proposal stemmed from the workshop in early 2014. These comments will be utilized in issuing a formal resolution regarding intervenor hourly rates. The proposal will also contain drafts of intervenors suggested documents. The intervenors will have the opportunity to comment on these drafts before a formal encompassing resolution is adopted.

In the 60-day status report, the Commission reported that the ALJ Division added an Important Information section to the Commissions Intervenor Compensation Program web page to alert intervenors to recent developments and to provide other important information for intervenors. In addition, the Commission is developing a Frequently Asked Questions document that will be posted on the Commissions Intervenor Compensation Program web page and periodically updated.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

Although the commission has made some concrete steps to clarify intervenors' confusion related to how it determines that work intervenors perform is reasonable, we would like to see what documents result from this exchange. Specifically, the commission indicates that it is considering intervenors' comments and recommendations on ways to expand, improve, and standardize guidance to intervenors and it is developing a frequently asked questions document that will be posted on the commission's Intervenor Compensation Program web page.

60-Day Agency Response

As discussed above, the ALJ Division is planning an informal workshop with intervenors in November 2013. In addition to addressing issues concerning developing market rates, the workshop will provide intervenors an opportunity to raise other issues.

The ALJ Division has added an "Important Information" section to the Commission's Intervenor Compensation Program web page to alert intervenors to recent developments and to provide other important information for intervenors. (See copy of web page screen shot submitted to aaronf@auditor.ca.gov).

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2012-118

Agency responses received are posted verbatim.