Report 2013-130 All Recommendation Responses

Report 2013-130: California Public Utilities Commission: It Fails to Adequately Ensure Consumers' Transportation Safety and Does Not Appropriately Collect and Spend Fees From Passenger Carriers (Release Date: June 2014)

Recommendation #1 To: Public Utilities Commission

To ensure carrier and public safety, the commission should ensure that the branch develops policies and procedures for receiving complaints and investigating passenger carriers by December 31, 2014. These policies and procedures should ensure that all complaints are entered into the complaints database.

6-Month Agency Response

(a) TEB developed complaint resolution guidelines for the Enforcement Intake Unit to improve consistency and work flow, and to clarify responsibilities. TEB also updated data entry fields and guidelines in its Case Management System. (b) TEB identified information gaps and outdated material in its existing investigative guidelines, and corrected those deficiencies. Guidelines will be easily accessible to staff online. And finally, TEB will review and update the guidelines at least annually, by January 1, to reflect newly-effective legislation and CPUC policy decisions.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch guidelines on December 31, 2014. The guidelines included policies and procedures for receiving complaints and investigating passenger carriers. They also include a policy to ensure that all complaints are entered into the complaint database.


60-Day Agency Response

(a) TEB developed complaint procedures for the Enforcement Intake Unit to improve consistency and work flow, and to clarify responsibilities. TEB is also updating data entry fields and procedures in its Case Management System. (b) TEB identified information gaps and outdated material in its existing investigative procedures, and is correcting those deficiencies. New procedures will be reformatted to enhance online viewing and improve staff accessibility. And finally, TEB is developing a new business process to routinize annual review and track modifications.

  • Estimated Completion Date: December 2014, and ongoing
  • Response Date: August 2014

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


Recommendation #2 To: Public Utilities Commission

To ensure that it resolves complaints against passenger carriers in a timely manner, the commission should establish a method for prioritizing complaints and it should implement a policy specifying the maximum amount of time between the receipt of a complaint and the completion of the subsequent investigation. Further, the commission should require branch management to monitor and report regularly on its performance in meeting that policy.

Annual Follow-Up Agency Response From October 2016

In February 2016, TEB began to include data on the length of time required to resolve complaints submitted to its Consumer Intake Unit as part of the Safety and Enforcement Division (SED) monthly report. After moving from SED to the Consumer Protection and Enforcement Division, TEB continued to publish complaint resolution time length data as part of its standalone monthly report.

  • Completion Date: February 2016

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

Although it has established a method for prioritizing complaints and specifying the maximum amount of time between the receipt of a complaint and the completion of the subsequent investigation, the commission has not provided evidence demonstrating that it requires transportation enforcement branch (branch) management to monitor and report regularly on its performance in meeting that policy. Specifically, it did not provide evidence showing that the branch monitors and specifically reports to executive management on how well it is prioritizing consumer complaints or how long it is taking staff to complete investigations related to those complaints.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12/31/2015

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


1-Year Agency Response

a) TEB developed prioritization guidelines for the Complaint Intake Unit to, among other efficiencies, enable quick escalation of high-risk safety complaints to the appropriate level. b) TEB determined appropriate milestones for investigations. c) TEB staff reports performance statistics in its Monthly Report to Executive Management.

  • Completion Date: August 2014
  • Response Date: June 2015

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

Although it has established a method for prioritizing complaints, the California Public Utilities Commission (commission) has not required transportation enforcement branch (branch) management to monitor and report regularly on its performance in meeting that policy. Specifically, the branch does not monitor and specifically report to executive management on how well it is prioritizing consumer complaints or how long it is taking staff to complete investigations related to those complaints. Instead, branch management only reports various performance statistics (such as the number of complaints received and closed, and the number of investigations resolved) in its monthly reports to executive management.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

6-Month Agency Response

TEB developed prioritization guidelines for the Complaint Intake Unit to, among other efficiencies, enable quick escalation of high-risk safety complaints to the appropriate level. TEB developed guidelines to categorize the subsequent investigations and apply appropriate completion dates. TEB staff will include performance measurements in its existing Monthly Report to Management.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch guidelines on December 31, 2014. These included policies and procedures for prioritizing complaints and specifying the maximum amount of time that between receiving a complaint and completing an investigation. However, the commission has not yet provided evidence that it requires branch management to monitor and report regularly on its performance in meeting that policy.


60-Day Agency Response

TEB developed prioritization guidelines for the Complaint Intake Unit to, among other efficiencies, enable quick escalation of high-risk safety complaints to the appropriate level. TEB has undertaken a Process Flow Review to identify, develop and implement appropriate milestones for complaint resolution. TEB staff will include performance measurements in its existing Monthly Report to Management.

  • Estimated Completion Date: Prioritization guidelines compled; implementing policy specifying maximum time due Sept. 2014; all other completion dates to be determined.
  • Response Date: August 2014

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


Recommendation #3 To: Public Utilities Commission

To ensure that the branch conducts thorough investigations of passenger carriers, the commission should establish standards specifying the types of evidence that it considers sufficient to determine whether a passenger carrier is operating illegally.

6-Month Agency Response

(Recommendations 3-5) TEB, in consultation with the Legal Division, developed evidence standards for inclusion in the revised investigation guidelines (Recommendation 3). The guidelines incorporate a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its transportation enforcement branch guidelines on December 31, 2014. These guidelines specify the types of evidence that it considers sufficient to determine whether a passenger carrier is operating illegally.


60-Day Agency Response

(Recommendations 1-3) TEB, in consultation with the Legal Division, is developing evidence standards for inclusion in the revised investigation procedures (Recommendation 1). The standards will include a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

  • Estimated Completion Date: October 2014
  • Response Date: August 2014

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


Recommendation #4 To: Public Utilities Commission

To ensure that the branch conducts thorough investigations of passenger carriers, the commission should implement a policy that directs investigators to obtain sufficient evidence to justify determinations and to verify carrier claims that they are no longer operating or are not operating illegally.

6-Month Agency Response

(Recommendations 3-5) TEB, in consultation with the Legal Division, is developing evidence standards for inclusion in the revised investigation procedures (Recommendation 3). The standards will include a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch guidelines on December 31, 2014. These guidelines direct investigators to obtain sufficient evidence to justify determinations and to verify carrier claims that they are no longer operating or are not operating illegally.


60-Day Agency Response

(Recommendations 1-3) TEB, in consultation with the Legal Division, is developing evidence standards for inclusion in the revised investigation procedures (Recommendation 1). The standards will include a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

  • Estimated Completion Date: October 2014
  • Response Date: August 2014

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


Recommendation #5 To: Public Utilities Commission

To ensure that the branch conducts thorough investigations of passenger carriers, the commission should require investigators to review passenger carriers for compliance with each state law relating to passenger carrier requirements.

6-Month Agency Response

(Recommendations 3-5) TEB, in consultation with the Legal Division, is developing evidence standards for inclusion in the revised investigation procedures (Recommendation 3). The standards will include a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch guidelines on December 31, 2014. These guidelines included policies and procedures that instruct investigators to review passenger carriers for compliance with the state laws relating to passenger carrier requirements. They also include an investigation checklist.


60-Day Agency Response

(Recommendations 3-5) TEB, in consultation with the Legal Division, is developing evidence standards for inclusion in the revised investigation procedures (Recommendation 3). The standards will include a reference chart of state laws and requirements applicable to passenger carriers. Clear evidence standards will promote greater transparency and consistent application among staff. Further, implementation of such standards afford supervisors an ongoing opportunity to communicate and reinforce management expectations to staff.

  • Estimated Completion Date: October 2014
  • Response Date: August 2014

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


Recommendation #6 To: Public Utilities Commission

To ensure that the branch conducts thorough investigations of passenger carriers, the commission should implement a formal training program to ensure that all investigators have adequate knowledge and skills related to regulating passenger carriers.

Annual Follow-Up Agency Response From October 2016

In July 2016, TEB finalized its mandatory training schedule. The finalized TEB mandatory training schedule establishes procedures regarding when and how frequently TEB requires investigators to attend training sessions. TEB verifies training completion by certificate for one-time external trainings and by attendance for recurring seminar trainings provided by TEB management. TEB informs all investigators of their one-time training requirements upon employment, and the hiring supervisors register new staff at courses offered at selected colleges. In 2016, TEB piloted a series of weekly training sessions, based on topics contained in investigators' enforcement guidelines. For 2017 and beyond, TEB planned a series of monthly seminars, which will be offered to TEB staff statewide and calendared in advance, with invitations sent by the TEB Branch Chief every December.

  • Completion Date: July 2016

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

Although the California Public Utilities Commission (commission) established a training program that consists of a training plan specifying the training classes investigators are required to take, it did not provide evidence demonstrating that it informed all investigators of these training requirements. This training plan includes procedures directing investigators when the classes are offered and how frequently they are required to attend the required trainings. It also shows which of the required training classes the investigators must complete within one year of being hired. However, it did not provide documentation demonstrating that it has distributed it to the investigators.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12/31/2015

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


1-Year Agency Response

TEB rolled out an in-house survey in November 2014 to solicit staff input regarding remedial training needs, and developed a formal training program based on the results in December 2014. TEB investigators attended a required week-long investigative techniques course in October 2014 or April 2015, offered through Rio College. Course materials form the backbone of the formal TEB training program, supplemented by other effective and low-cost online and in-house training options. And finally, TEB held a three-day internal workshop in March 2015 to, among other tasks,refine and confirm training needs.

  • Completion Date: December 2014
  • Response Date: June 2015

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

Although the California Public Utilities Commission (commission) sent investigators to an investigative techniques training and established a training program, it has not yet fully implemented this program. This program consists of a training plan specifying the training classes investigators are required to take. However, the commission did not establish procedures or otherwise direct investigators when and how frequently they are required to attend the required trainings. The commission drafted a schedule showing which of the required training classes the investigators must complete within one year of being hired. However, it has not yet finalized this draft schedule or distributed it to the investigators.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

6-Month Agency Response

TEB conducted individual surveys this Fall to identify staff training needs, identified in-house and external training opportunities, and prepared a formal training program.

Status: In progress

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch training plan on December 31, 2014. This training plan identifies relevant training for investigators along with potential dates and costs. However, the commission did not yet provide evidence that it has directed investigators to take these trainings.


60-Day Agency Response

To jump-start training program efforts, TEB staff will attend a week-long investigative techniques course in October 2014, offered through Rio College. Course materials will form the backbone of the formal TEB training program, supplemented by other effective and low-cost online and in-house training options. And finally, TEB will roll out an in-house survey this Fall to solicit staff input regarding remedial training needs.

  • Estimated Completion Date: October 2014
  • Response Date: August 2014

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


Recommendation #7 To: Public Utilities Commission

To better ensure passenger carrier and public safety, the commission should create a system to determine when a carrier merits a penalty and what the magnitude of the penalty should be. In addition, to be an effective deterrent, the amount of such penalties should be more consistent with what state law permits.

Annual Follow-Up Agency Response From October 2016

In March 2016, TEB developed an illustrative chart identifying the types of violations it encounters, the associated Code authority, and the appropriate fine for each type of violation. The chart further provides guidance as to when fines should be escalated based on criteria such as number of past violations, severity of the violation, and past refusal to comply with directives. In July 2016, TEB revised its investigators' enforcement guidelines to include the chart, as well as a sample citation case study and penalty analysis based on an actual prior investigation.

  • Completion Date: July 2016

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

We confirmed that the commission created a system to determine when a carrier merits a penalty and what the magnitude of the penalty should be consistent with what state law permits. The commission included these instructions in its revised enforcement guidelines.


Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12-31-2015

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


Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12-31-2015

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


1-Year Agency Response

TEB, with Legal Division staff, developed a citation policy to help staff determine allowable penalty amounts by violation category, and guidelines to harmonize penalty amounts with enforcement and litigation strategies.

  • Completion Date: November 2014
  • Response Date: June 2015

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

Although the California Public Utilities Commission developed transportation enforcement branch guidelines, which include a section related to penalties, it did not create a system to determine or specify when a carrier merits a penalty and what the magnitude of the penalty should be. Instead, the commission's guidelines are very high level and only state there are two types of citations and that one type may be issued in amounts ranging from the statutory minimum up to $10,000 and the other may be issued in amounts ranging from $10,000 to $20,000. However, it does not provide a guide or explain how to determine the magnitude of penalty a particular violation should receive.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

6-Month Agency Response

TEB and Legal Division staff developed citation guidelines for staff to determine allowable penalty amounts by violation category, and guidelines to harmonize penalty amounts with enforcement and litigation strategies. Citation guidelines will also assist administrative law judges to clearly identify how TEB calculated fines, and aid the ALJ in his/her decision to reduce or increase fines within a violation category.

Status: Package of comprehensive guidelines under management review.

  • Estimated Completion Date: December 31, 2014
  • Response Date: December 2014

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

The commission provided its Transportation Enforcement Branch guidelines on December 31, 2014. These guidelines include a description of the two types of citations and a broad range (up to $10,000 and $10,000-$20,000) of penalty for each type. However, they do not specify how an investigator should determine the magnitude of the penalty necessary in individual cases.


60-Day Agency Response

TEB is working with Legal Division staff to create a citation policy to help staff determine allowable penalty amounts by violation category, and guidelines to harmonize penalty amounts with enforcement and litigation strategies.

  • Estimated Completion Date: October 2014
  • Response Date: August 2014

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


Recommendation #8 To: Public Utilities Commission

The commission should require staff to examine and formally report on the feasibility of impounding the vehicles of passenger carriers that refuse to comply with commission orders or that refuse to pay citation penalties and also on the feasibility of making use of the Tax Board's program for intercepting income tax refunds, lottery winnings, and unclaimed property payments to collect unpaid citation penalties.

Annual Follow-Up Agency Response From October 2016

TEB's formal report on impound feasibility and Tax Board collaboration is posted on the CPUC website

  • Completion Date: September 2016

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

The commission published a report regarding the feasibility of impounding the vehicles of passenger carriers and also on the feasibility of making use of the Tax Board's program for intercepting income tax refunds, lottery winnings, and unclaimed property payments to collect unpaid citation penalties.


Annual Follow-Up Agency Response From October 2016

1) The TEB Report regarding the feasibility of impounding passenger carrier vehicles is posted on the CPUC website. In sum, CA Public Utilities Code 1046(b) et seq authorizes peace officers to impound vehicles, but not the CPUC. For example, LAX routinely impounds vehicles driven by unlicensed and noncompliant carriers. PU Code 1044 allows the CPUC to petition for an injunction, including vehicle impounds, in Superior Court. 2) As stated in TEB's 2016 Annual Plan, TEB will complete protocols and safeguards to enable individual sting operations with pre-paid credit cards in December 2016, under guidance from the Department of General Services. The CPUC obtained full cooperation from the CHP to impound vehicles of noncompliant carriers on behalf of the CPUC once DGS approves the CPUC's credit card-handling protocols. 3) State Accounting rules (obtain cite from Fiscal) prohibit TEB from pursuing fine collection, as the entity that issues the citation and resulting fine may not conduct collection activities. The CPUC Fiscal Office routinely issues collection letters to recover outstanding or delinquent fines. The CPUC could also pursue fine recovery through a contract with a collection agency or through civil or small claims court. 4) In 2016, TEB learned that the CPUC enrolled in the Franchise Tax Board's Income Intercept Program in (month, year), which enables the CPUC to make claims to collect unpaid fines owed by sole proprietors through Social Security numbers.

  • Estimated Completion Date: 12/31/2016

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


Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12/31/2015

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


1-Year Agency Response

TEB and the Franchise Tax Board have discussed a potential partnership or collaboration possibilities. The CPUC will enroll in FTB's Interagency Intercept Collection Program in July 2015.

  • Estimated Completion Date: July 2015
  • Response Date: June 2015

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


6-Month Agency Response

TEB and the Franchise Tax Board have discussed potential partnership/collaboration possibilities and challenges. TEB concludes that the most feasible and least-cost approach to step up collection of fines and penalties, as well as to assist the Fiscal Office with audits, is to obtain an individual with financial auditing and collection skills. TEB seeks to aquire those skills through a position upgrade or request.

Status: In progress. CPUC plans to submit position request to DOF in next budget cycle.

  • Estimated Completion Date: Fall 2015
  • Response Date: December 2014

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


60-Day Agency Response

TEB and the Franchise Tax Board have discussed potential partnership or collaboration possibilities. Next step is to develop a preliminary impound and towing program and quantify associated costs and anticipated revenues. TEB will evaluate each enforcement option and report the results to the Commissioners.

  • Estimated Completion Date: November 2014
  • Response Date: August 2014

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


Recommendation #9 To: Public Utilities Commission

To ensure that passenger carriers submit accurate fee payments, the commission should require its fiscal staff to implement a process to verify passenger carrier fee payments and associated revenue.

Annual Follow-Up Agency Response From October 2016

An auditor position within the Fiscal Office was approved as part of the FY15-16 budget process to perform audits of self-reported revenue various regulated entities, including transportation carriers. pursuant to the audit protocol and process previously developed. The FY 15-16 budget took effect July 1, 2015 and after completion of the application and selection process, a new auditor was brought onboard October 1, 2016. The new auditor is currently being trained and is expected to begin auditing responsibilities in December 2016.

  • Estimated Completion Date: 12/31/2016

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


Annual Follow-Up Agency Response From October 2016

This is an ongoing process, implementation is underway; CPUC will consider this corrective action fully completed when the first audited claims are turned over to the Collections Unit, TEB or attorneys. MM Update: After hiring difficulties, employee hired 10/1/16 (BCP for position approved 7/1/15). Currently training staff, anticipate to have first audit completed by 12/31/16.

  • Estimated Completion Date: 12/31/2016

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


Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 11-15-2015

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


1-Year Agency Response

CPUC developed an audit protocol as a means to verify self-reported revenue of passenger carriers submitting user fee payments to the Transportation Account (Fund 0461). Fiscal Office staff in the Cashiering Unit is responsible for conducting audits and reviewing utility financial records against self-assessed user fees calculations, and revenues received. CPUC is documenting this process in its entirety; If revenues are found to be insufficient, the case will turned over to the Collections Unit, the Transportation Enforcement Branch (TEB) or CPUC attorneys for consequential action.

  • Estimated Completion Date: November 2015
  • Response Date: June 2015

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

Although the California Utilities Commission has developed an audit protocol and process to verify passenger carrier fee payments and associated revenue, it has not yet fully implemented this process.


6-Month Agency Response

CPUC has developed an audit protocol as a means to verify self-reported revenue of passenger carriers submitting user fee payments to the Transportation Account (Fund 0461). Fiscal Office staff in the Cashiering Unit will be responsible for conducting audits and reviewing utility financial records against self-assessed user fees calculations, and revenues received. CPUC is documenting this process in its entirety; If revenues are found to be insufficient, the case will turned over to the Collections Unit, the Transportation Enforcement Branch (TEB) or CPUC attorneys for consequential action.

This is an ongoing process, implementation is underway; CPUC will consider this corrective action fully completed when the first audited claims are turned over to the Collections Unit, TEB or attorneys.

  • Estimated Completion Date: July 1, 2015
  • Response Date: December 2014

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

The commission developed an audit process and checklist for its fiscal staff to follow to verify passenger carrier fee payments and associated revenue. However, as indicated in its response, the commission has not yet conducted these audits.


60-Day Agency Response

CPUC has developed an audit protocol as a means to verify self-reported revenue of passenger carriers submitting user fee payments to the Transportation Account (Fund 0461). Fiscal Office staff in the Cashiering Unit will be responsible for conducting audits and reviewing utility financial records against self-assessed user fees calculations, and revenues received. CPUC is documenting this process in its entirety; If revenues are found to be insufficient, the case will turned over to the Collections Unit, the Transportation Enforcement Branch (TEB) or CPUC attorneys for consequential action.

  • Estimated Completion Date: November 2014
  • Response Date: August 2014

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


Recommendation #10 To: Public Utilities Commission

To ensure that it complies with state law and uses passenger carrier fees appropriately, the commission should implement a process to ensure that passenger carrier fee revenues more closely match related enforcement costs.

Annual Follow-Up Agency Response From October 2016

The Commission has developed multiple processes to ensure revenue from passenger carrier fees more closely match related enforcement costs, including: modifying accounting coding structure to code revenue and expenditure transactions by industry, annually reviewing user fee rates in coordination with budget forecasting, and increased oversight of position control and personnel expenditures.

  • Completion Date: August 2016

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

The California Utilities Commission did not provide documentation to demonstrate that it has developed multiple processes to ensure that passenger carrier fee revenues more closely match related enforcement costs.

  • Auditee did not substantiate its claim of full implementation

Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12/15/2015

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


1-Year Agency Response

The CPUC has developed a draft process and decision-making model for how the agency will annually assess user fees associated with all relevant funds, and is working to incorporate this process into annual fund forecasting processes it is also developing. The final process adopted by CPUC will 1) Clearly identify roles and responsibilities within the agency (Budget Office, Divisions, etc.), 2) Document all methodologies and assumptions used in budget forecasting and user fee analysis, and 3) Become integrated into the agency's annual budget process. The CPUC will incorporate the results of the agency's zero-based budget efforts for Budget Year 2015-16 into the expenditure forecasting for all funds.

  • Estimated Completion Date: December 2015
  • Response Date: June 2015

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

The California Utilities Commission has not yet adopted a final process to ensure that passenger carrier fee revenues more closely match related enforcement costs.


6-Month Agency Response

The CPUC has developed a process and decision-making model for how the agency will annually assess user fees associated with all relevant funds, and is working to incorporate this process into annual fund forecasting processes it has developed. The ultimate process will 1) Clearly identify roles and responsibilities within the agency (Budget Office, Divisions, etc.), 2) Document all methodologies and assumptions used in budget forecasting and user fee analysis, and 3) Become integrated into the agency's annual budget process. The CPUC will incorporate the results of the agency's zero-based budget efforts for Budget Year 2015-16 into the expenditure forecasting for all funds.

Budget forecasting process has been completed for FY 2015; CPUC will consider adjusting transportation user fees (based on materialized revenues and forecasting analysis) for FY 2015-16. Any fee adjustments would occur in December 2015 as part of the Commission's regular user fee resolution adoption process for Fund 0461.

  • Estimated Completion Date: December 2015
  • Response Date: December 2014

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


60-Day Agency Response

The CPUC has developed a draft process and decision-making model for how the agency will annually assess user fees associated with all relevant funds, and is working to incorporate this process into annual fund forecasting processes it is also developing. The final process adopted by CPUC will 1) Clearly identify roles and responsibilities within the agency (Budget Office, Divisions, etc.), 2) Document all methodologies and assumptions used in budget forecasting and user fee analysis, and 3) Become integrated into the agency's annual budget process. The CPUC will incorporate the results of the agency's zero-based budget efforts for Budget Year 2015-16 into the expenditure forecasting for all funds.

  • Estimated Completion Date: Fall 2014, in conjunction with fund budget forecasting for Budget Year 2015-16
  • Response Date: August 2014

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


Recommendation #11 To: Public Utilities Commission

To ensure that it does not further overcharge the transportation account, the commission should require the branch to review annually all branch staff funding distributions and align them with recent time charges.

Annual Follow-Up Agency Response From September 2015

We have a policy in place requiring BCOs to do an annual review of home based codes against their timesheets. The review is performed under the guidance of a new SSM I in the Budget Office who works exclusively on position and budget control for all CPUC positions.

  • Completion Date: July 2015

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

In July 2015, the California Public Utilities Commission implemented a budget control officer (BCO) manual, which includes a policy that requires BCOs to annually review branch staff funding distributions and align them with recent time charges.


6-Month Agency Response

CPUC now requires all Division BCOs to annually review salary allocations for Division staff compared to actual timesheet submissions, current responsibilities, and job functions and make adjustments as necessary. This will be implemented as a phased process, which began with the Transportation Enforcement Branch which includes staff that are funded by multiple special funds associated to the work they do. The Branch is realigning funding codes and/or adjusted employee duties and responsibilities to more accurately reflect the effort that should be spent in each work area. As noted by the audit, as of April 1, 2014, CPUC implemented a new policy that requires Divisions to submit justification and documentation to set the funding distribution for a new employee or an employee that is changing positions with the CPUC. This is reviewed and approved by the CPUC Budget Office for completeness and potential impacts on fund appropriations before being processed.

Status: The salary allocation review policy has been completed. Updates to transportation salary allocations and/or updated duty statements will be finalized in February 2015. The Budget Office has developed guidance for other Division BCOs for how to update staff salary allocations against timesheets, and will schedule the next round of updates for February 2015. This timeline aligns with updates to the agency's cost allocation plan.

  • Estimated Completion Date: February 2015
  • Response Date: December 2014

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


60-Day Agency Response

CPUC now requires all Division BCOs to annually review salary allocations for Division staff compared to actual timesheet submissions, current responsibilities, and job functions and make adjustments as necessary. This will be implemented as a phased process, which began with the Transportation Enforcement Branch which includes staff that are funded by multiple special funds associated to the work they do. The Branch is realigning funding codes and/or adjusted employee duties and responsibilities to more accurately reflect the effort that should be spent in each work area. As noted by the audit, as of April 1, 2014, CPUC implemented a new policy that requires Divisions to submit justification and documentation to set the funding distribution for a new employee or an employee that is changing positions with the CPUC. This is reviewed and approved by the CPUC Budget Office for completeness and potential impacts on fund appropriations before being processed.

  • Estimated Completion Date: For transportation enforcement, expected completion will be December 2014, however this is an ongoing process for the rest of the agency.
  • Response Date: August 2014

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


Recommendation #12 To: Public Utilities Commission

To detect and deter carriers from operating illegally at airports, the branch should use as intended the five positions added for passenger carrier enforcement at airports. If the branch chooses not to designate five positions solely for this purpose, then it must be prepared to demonstrate regularly that an equivalent number of full-time positions are working on this activity.

Annual Follow-Up Agency Response From October 2016

In August 2016, TEB completed the process to return all five of the identified airport enforcement positions to their appropriate enforcement sections. One of these positions is currently filled. TEB posted the remaining four for interested applicants, and expects to conclude the review and selection process in November 2016. To ensure availability of airport enforcement work, TEB is drafting airport partnership plans, which it expects to circulate to the airports in late 2016.

  • Estimated Completion Date: 11/30/2016

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


Annual Follow-Up Agency Response From October 2016

On March 23, 2016, the CPUC Executive Director communicated to State Auditor Elaine Howle that the CPUC intends to comply fully with Recommendation 12. The CPUC identified the specific positions intended to conduct airport enforcement. Of the five, three positions were located in the transportation enforcement section, one in the transportation license section, and one outside of TEB. The CPUC returned all positions to airport enforcement, posted the vacancies and expects to fill the vacancies by November 15, 2016. As stated in TEB's 2016 Annual Plan, TEB is drafting a formal airport partnership plan to locate the equivalent of those five positions among California's major airports. Right now, only LAX authorizes the CPUC to locate enforcement staff onsite; TEB consistently maintains one full-time inspector at LAX. While TEB maintains a close relationship with all airports and coordinates joint inspections, there is not enough airport work to occupy five inspectors unless the CPUC obtains agreements with the major airports.

  • Estimated Completion Date: 11/15/2016

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


Annual Follow-Up Agency Response From October 2015

See one-year response.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement


1-Year Agency Response

CPUC began the transition of five positions to new passenger carrier enforcement activity at California airports beginning August 2014. CPUC also refined its Work Tracking System (WTS) to better define and track work associated with airport enforcement. TEB Management reviews WTS monthly, and adjusts workload as appropriate. Historically, TEB's annual investigatory workload is approximately 60% passenger carriers and 40% household goods carriers. Investigators are cross-trained to work on both types of cases. Five investigators dedicated to airports results in a loss equivalent to two full time investigators to the household goods program. The CPUC must retain the flexibility to investigate the highest priority cases, regardless of carrier classification.

  • Response Date: June 2015

California State Auditor's Assessment of 1-Year Status: Will Not Implement

It is troubling that the California Public Utilities Commission (commission) does not plan to implement our recommendation. As we describe in pages 34 through 37 of our report, because the transportation enforcement branch (branch) does not use the five positions the Legislature authorized to conduct passenger carrier enforcement at major airports, it may not be catching and deterring unlicensed passenger carriers operating at major California airports as the Legislature intended. We found that the commission transferred one of these five staff to work in a completely different branch unrelated to transportation enforcement, and the remaining four staff spent more time working on household good carrier investigations and licensing activities than passenger carrier enforcement. Consequently, the branch inappropriately uses funds from the transportation account, which benefited from a fee increase tied to what was supposed to be five new positions working on passenger carrier enforcement at major airports, to compensate for work associated with other activities. Therefore, we concluded that the commission should either reduce revenues by lowering fees on passenger carriers or it should increase its enforcement activities by using the positions as authorized by the Legislature. However, the commission is doing neither.


6-Month Agency Response

TEB dedicated the equivalent of five positions to passenger carrier enforcement at California airports. TEB also refined its Work Tracking System to better define and track work associated with airport enforcement, which enables management to rebalance workload as necessary to maintain the five-person allocation. Currently, such reviews take place quarterly.

Status: Ongoing. The first two reviews indicate the need for continued monitoring and supervision over staff entries into the work tracking system.

  • Estimated Completion Date: This will be an ongoing corrective action
  • Response Date: December 2014

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


Recommendation #13 To: Public Utilities Commission

To strengthen its leadership and ensure passenger carrier and public safety, the branch should produce a draft strategic plan by December 31, 2014, with a final strategic plan completed as the commission specifies. The strategic plan should include goals for the program; strategies for achieving those goals, including strategies for staff development and training; and performance measures to assess goal achievement.

Annual Follow-Up Agency Response From October 2016

TEB's 2016 Annual Plan includes a new section on long-term goals. The 2016 Annual Plan also includes performance measures for all goals outlined.

  • Completion Date: September 2016

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

The branch did not provide evidence demonstrating that it has drafted a strategic plan that focuses on its long-term goals and strategies for transportation enforcement as we recommended. Although it provided an updated annual plan dated July 2016 that describes its high-level plan and strategies for performance reporting and staff development and training, this annual plan does not clearly describe its long-term goals for the enforcement program, the strategies for achieving those goals, or the performance measures to assess goal achievement.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

Annual Follow-Up Agency Response From October 2015

See one-year response.

  • Estimated Completion Date: 12/31/2015

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


1-Year Agency Response

CPUC redeployed two analysts to TEB with the appropriate skillsets to develop two planning documents: 1) a 2-3 Year Strategic Plan and 2) an Annual Work Plan. In March 2015, TEB held a three-day workshop to, among other taks, brainstorm projects to include in the TEB 2015 Annual Plan. Also in March 2015, the CPUC completed an agency-wide Safety Policy Implementation Plan, which includes implementation strategies very similar to the BSA recommendation (training, development and evaluation metrics.) In June 2015, the CPUC engaged a consultant to help develop an agency-wide strategic plan.

  • Completion Date: April 2015
  • Response Date: June 2015

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

First, the transportation enforcement branch (branch) has not yet drafted a strategic plan that focuses on its long-term goals and strategies for transportation enforcement as we recommended. So far, it has only developed an annual plan that only addresses the branch's goals and strategies for one year (through the end of 2015).

Although the branch recently developed an annual plan that includes goals and strategies for achieving those goals, including strategies for staff development and training. However, the branch did not establish or include any performance measures to assess goal achievement.

  • Auditee did not substantiate its claim of full implementation
  • Auditee did not address all aspects of the recommendation

6-Month Agency Response

CPUC redeployed two analysts to TEB with the appropriate skillsets to develop two planning documents: 1) an Annual Work plan and 2) a 2-3 Year Strategic Plan. CPUC recently adopted a Safety Policy which includes implementation strategies very similar to the BSA recommendation (training, development and evaluation metrics.

Status: Under final management review.

  • Estimated Completion Date: 1) December 31, 2014. 2) Draft Plan by December 31, 2014; finalized by March 2015.
  • Response Date: December 2014

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

The commission provided its Draft Strategic Plan on December 31, 2014. The plan includes goals and strategies for achieving those goals, including strategies for staff development and training. However, it does not yet include performance measures to assess goal achievement.


60-Day Agency Response

CPUC redeployed two analysts to TEB with the appropriate skillsets to develop two planning documents: 1) an Annual Work plan and 2) a 2-3 Year Strategic Plan. CPUC recently adopted a Safety Policy which includes implementation strategies very similar to the BSA recommendation (training, development and evaluation metrics.

  • Estimated Completion Date: 1) November 2014. 2) Draft Plan by December 31, 2014; finalized by March 2015.
  • Response Date: August 2014

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


All Recommendations in 2013-130

Agency responses received are posted verbatim.


Report type

Report type
















© 2013, California State Auditor | Privacy Policy | Conditions of Use | Download Adobe PDF Reader