San Diego Gas & Electric Company - California Alternate Rates For Energy Program

SAN DIEGO GAS & ELECTRIC COMPANY Audit Report CALIFORNIA ALTERNATE RATES FOR ENERGY PROGRAM January 1, 2013, through December 31, 2015 BETTY T. YEE California State Controller December 2018 BETTY T. YEE California State Controller December 5, 2018 Kathy Wickware, Senior Energy Programs Advisor San Diego Gas & Electric Company 8330 Century Park Court, CP 12H San Diego, CA 92123 Dear Ms. Wickware: The State Controller’s Office (SCO) audited San Diego Gas & Electric Company’s (SDG&E) California Alternate Rates for Energy (CARE) program for the period of January 1, 2013, through December 31, 2015. The objectives of the audit were to (1) determine whether SDG&E manages the CARE program in conformance with applicable laws, regulations, and agreement terms and conditions; (2) assess whether SDG&E’s CARE program is in compliance with applicable laws, regulations, and agreement terms and conditions; (3) identify opportunities and priorities in which financial management governance may help to strengthen key controls; and (4) follow up on prior audit findings and evaluate the effectiveness of remediation. We assessed and evaluated the CARE program’s processes, rather than the effectiveness of the internal controls, to determine whether key processes could be strengthened (Objective 3). We did not validate the effectiveness of the remediation for four of the five business issues identified in SDG&E’s internal audit, which was performed as requested in a prior California Public Utilities Commission audit. We limited our follow-up to reviewing SDG&E’s corrective action plans and related documentation (Objective 4). Our audit found that five of the 44 CARE program customer files tested lacked adequate documentation regarding eligibility through categorical enrollment. The documentation provided did not clearly indicate that the customers were currently participating in a categorical program that granted them eligibility for the CARE program. This issue is further described in the Finding and Recommendation section of this report. If you have any questions, please contact Andrew Finlayson, Chief, State Agency Audits Bureau, by telephone at (916) 324-6310. Sincerely, Original signed by JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits JVB/ls Kathy Wickware, Senior Energy -2- December 5, 2018 Programs Advisor cc: Elaine MacDonald, Customer Programs Business Analysis Manager San Diego Gas & Electric Company Monica Wiggins, Customer Programs Compliance Supervisor San Diego Gas & Electric Company Brittney Lee, Regulatory Case Administrator San Diego Gas & Electric Company Edward Randolph, Director Energy Division California Public Utilities Commission Robert Strauss, Manager (via email) Energy Efficiency Branch, Energy Division California Public Utilities Commission Alison LaBonte, Ph.D., Supervisor (via email) Residential Energy Efficiency Programs and Portfolio Approval, Energy Division California Public Utilities Commission Syreeta Gibbs, Senior Public Utility Regulatory Analyst (via email) Residential Energy Efficiency Programs and Portfolio Approval, Energy Division California Public Utilities Commission Lola Odunlami, Public Utility Regulatory Analyst (via email) Residential Energy Efficiency Programs and Portfolio Approval, Energy Division California Public Utilities Commission Barbara Owens, Director of Enterprise Risk and Compliance Office (via email) Executive Division California Public Utilities Commission Kevin Nakamura, Program and Project Supervisor (via email) Utility Audits, Finance and Compliance Branch California Public Utilities Commission San Diego Gas & Electric Company California Alternate Rates for Energy Program Contents Audit Report Summary ............................................................................................................................ 1 Background ........................................................................................................................ 1 Objectives, Scope, and Methodology ............................................................................... 2 Conclusion .......................................................................................................................... 3 Follow-up on Prior Audit Findings .................................................................................. 3 Views of Responsible Officials .......................................................................................... 4 Restricted Use .................................................................................................................... 4 Finding and Recommendation .............................................................................................. 5 Appendix 1—Compliance with Applicable Laws, Regulations, and Agreement Terms and Conditions ........................................................... 7 Appendix 2—Summary Schedule of Prior CPUC Audit Findings .................................... 8 Appendix 3—Summary Schedule of Prior Internal Audit Findings ................................. 9 Attachment—San Diego Gas & Electric Company’s Response to Draft Audit Report San Diego Gas & Electric Company California Alternate Rates for Energy Program Audit Report Summary The State Controller’s Office (SCO) audited San Diego Gas & Electric Company’s (SDG&E) California Alternate Rates for Energy (CARE) program for the period of January 1, 2013, through December 31, 2015. The purpose of this audit was to ensure SDG&E’s compliance with the Public Utilities Code and regulations associated with the Income Qualified Assistance Program for the CARE program, the California Statewide Energy Savings Assistance Program Policy and Procedures Manual, and program rules and restrictions provided by SDG&E. Our audit found that five of the 44 CARE program customer files tested lacked adequate documentation regarding eligibility through categorical enrollment. The documentation provided did not clearly indicate that the customers were currently participating in the categorical program that granted them eligibility for the CARE program. This issue is further described in the Finding and Recommendation section of this report. The CARE program is administered by electrical and gas utility Background companies, often in partnership with community-based organizations, which enroll eligible customers in their communities. The program provides a 30-35% discount for electrical charges and 20% for natural gas charges to eligible participants. Income eligibility for CARE participation is set at 200% or less of Federal Poverty Guidelines. The program is funded by non-participating CARE customers as part of a statutory “public purpose program surcharge” that appears on monthly utility bills. CARE is a self-certification program, with targeted post-enrollment income verification. High-energy usage CARE customers are also targeted for enrollment in energy efficiency programs (e.g., the Energy Savings Assistance [ESA] program) and other conservation efforts. The California Public Utilities Commission (CPUC) requires that utility companies adhere to the California Statewide Energy Savings Assistance Program Policy and Procedures Manual, and comply with Public Utilities Code, CPUC directives, and CPUC General Orders (GO). CPUC Decision (D.) 12-08-044 and D.14-08-030 authorized average annual budgets of approximately $86.2 million in ratepayer funds to administer and implement SDG&E’s CARE program budget for calendar years 2013 through 2015. Budgeted and actual amounts for the three calendar years are as follows: Year Budgeted Actual 2013 $ 88,080,979 $ 67,533,411 2014 $ 89,118,738 $ 68,427,774 2015 $ 89,100,898 $ 81,795,251 We performed the audit at the request of the CPUC, pursuant to an Interagency Agreement. -1- San Diego Gas & Electric Company California Alternate Rates for Energy Program Objectives, Scope, The objectives of the audit were to: and Methodology  Determine whether SDG&E manages the CARE program in conformance with applicable laws, regulations, and agreement terms and conditions;  Assess whether SDG&E’s CARE program is in compliance with applicable laws, regulations, and agreement terms and conditions (see Appendix 1);  Identify opportunities and priorities in which financial management governance may help to strengthen key controls; and  Follow up on prior audit findings and evaluate the effectiveness of remediation. We assessed and evaluated the CARE program’s processes, rather than the effectiveness of the internal controls, to determine whether key processes could be strengthened (Objective 3). We did not validate the effectiveness of remediation for four of the five business issues identified in SDG&E’s internal audit which was performed as requested in a prior CPUC audit. We limited our follow-up to reviewing SDG&E’s corrective action plans and related documentation (Objective 4). We conducted an audit of SDG&E’s CARE program for the period of January 1, 2013, through December 31, 2015. To achieve our objectives, we:  Reviewed prior audit reports of SDG&E related to the CARE program to follow up on prior audit findings by reviewing the action plan and responses to recommendations, and analyzing supporting documentation to determine whether remediation efforts were implemented;  Reviewed applicable laws, regulations, agreement terms and conditions, policies, and procedures related to SDG&E’s CARE program required by the CPUC for all energy utilities;  Interviewed all SDG&E CARE program employees and reviewed SDG&E’s CARE program Annual Reports to: o Gain an understanding of the CARE program’s services and benefits, budgets, operational goals, funding sources, revenues, expenditures, targeted beneficiaries, and recent statistical results; o Gain an understanding of the CARE program’s accounting and operational systems; and o Assess and evaluate the CARE program’s processes, and determine whether key controls could be strengthened. -2- San Diego Gas & Electric Company California Alternate Rates for Energy Program Upon gaining an understanding of SDG&E’s administration of the CARE program, we judgmentally selected transactions using non-statistical samples; errors found were not projected to the intended population.1 We:  Selected 12 of 18,453 ($183,066 of $13,330,780) CARE program expenditure transactions, and reviewed invoices and other supporting documentation;  Reviewed 44 of 829 CARE program customer files and records to determine compliance with applicable laws, regulations, and agreement terms and conditions;  Reviewed all fund shifting instances reported in the CARE program Annual Reports; and  Reviewed the CARE program balancing account. We conducted this performance audit in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our finding, conclusion, and recommendation, based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our finding, conclusion, and recommendation, based on our audit objectives. We did not audit SDG&E’s financial statements. We limited our audit scope to planning and performing audit procedures necessary to obtain reasonable assurance that SDG&E’s CARE program was in compliance with the laws and regulations associated with the Income Qualified Assistance programs, the California Statewide Energy Savings Assistance Program Policy and Procedures Manual, and program rules and restrictions provided by SDG&E. Conclusion We identified one instance of non-compliance with applicable laws, regulations, and agreement terms and conditions, as described in the Finding and Recommendation section of this report. We did not identify any key control areas that needed additional financial management. Follow-up on We reviewed the CPUC’s prior audit of the CARE program, Financial, Management and Regulatory Compliance Audit Report on the California Prior Audit Alternate Rate for Energy Program Administrative Costs and the Low Findings Income Energy Efficiency Program of San Diego Gas & Electric Company for the Years Ended December 31, 2007 and December 31, 2008, dated May 13, 2011, and presented our comments in Appendix 2 of this report. We did not validate the effectiveness of remediation for the issues identified in SDG&E’s internal audit which was performed as requested by CPUC. We also reviewed SDG&E’s Audit Services report for Project No. 15-263 for the period of July 1, 2014, through August 31, 2015, dated January 4, 2016, and presented our comments in Appendix 3 of this report. 1 As these samples were not statistical, we made no assumption that the errors would also be found in the transactions not sampled. -3- San Diego Gas & Electric Company California Alternate Rates for Energy Program Views of We issued a draft audit report on October 3, 2018. Brittany L. Lee, Regulatory Case Manager, responded to both the CARE and ESA program Responsible draft audit reports by letter dated October 19, 2018 (Attachment), agreeing Officials with the audit findings. This final audit report includes SDG&E’s response. Restricted Use This report is solely for the information and use of SDG&E, the CPUC, and the SCO; it is not intended to be and should not be used by anyone other than these specified parties. This restriction is not intended to limit distribution of this report, which is a matter of public record. Original signed by JEFFREY V. BROWNFIELD, CPA Chief, Division of Audits December 5, 2018 -4- San Diego Gas & Electric Company California Alternate Rates for Energy Program Finding and Recommendation FINDING— Of the 829 post-enrollment verifications (PEV) performed by SDG&E in June 2013, July 2014, and January 2015, we reviewed 44 PEV customer SDG&E did not files and records. Of the 44 customer files, 13 were from June 2013, 16 maintain current were from July 2014, and 15 were from January 2015. We determined that eligibility additional samples would not affect our finding. As we were not projecting documents for post the samples to the population, additional testing beyond the 44 was enrollment deemed unnecessary. We noted that five customer files lacked adequate verification documentation to support the customers’ eligibility for the CARE program, as follows:  Two CARE program customer files (July 2014, January 2015) lacked documentation to support that the customers were currently participating in the categorical program that granted them eligibility. SDG&E accepted California Medical Assistance Program (Medi-Cal) cards as adequate proof of enrollment in a categorical program. However, Medi-Cal cards do not indicate expiration dates or current eligibility dates. SDG&E should require additional verification to establish customers’ current participation in Medi-Cal and other categorical programs if current dates are not explicitly displayed on the cards. Examples of additional verification for the Medi-Cal program include letters of acceptance and annual renewal letters;  One CARE program customer file (July 2014) lacked PEV documentation but was recertified anyway; and  Two CARE program customer files (June 2013, July 2014) lacked documentation to support that the customers were eligible for the CARE program when the PEV was conducted. SDG&E’s database did not indicate that the customers were removed from the CARE program after the 90-day deadline to provide the necessary supporting documentation. Customers apply for the CARE program through a self-certification process. Applications for the CARE program do not require that verification documents be submitted for the application to be approved. However, SDG&E conducts PEVs on selected customers to validate their application information, income, and eligibility in other categorical programs. If a customer passes the PEV, he or she will continue to receive program benefits. If a customer does not pass verification, he or she must be removed from the CARE program. As part of our PEV testing plan, we selected an initial limited number of program customer files. Based on the results of testing, we determined that testing additional files would not affect our overall conclusion that PEV documentation was not consistently maintained. The California Statewide Energy Savings Assistance Program Policy and Procedures Manual, section 2.2.3.2, Categorical Eligibility, states that applicants using the categorical eligibility option to enroll in the ESA program must present documentation reflecting current participation in one of the CPUC-approved programs to satisfy the income documentation -5- San Diego Gas & Electric Company California Alternate Rates for Energy Program component. Although the manual is an ESA program manual, SDG&E stated that it uses the policies and procedures regarding program eligibility for both the ESA and CARE programs. SDG&E’s CARE Post Enrollment Verification-Completes manual states: CARE customers selected for PEV must submit a completed income validation form and proof of income or proof of participation in a one or more of the public assistance programs to determine their eligibility to continue their participation in the CARE program…If all requirements are not met and complete documentation is not received before 90 days after the first letter was mailed, CISCO will terminate the CARE discount on that account for non-response. Recommendation To ensure compliance with review procedures set forth by SDG&E, as well as customer eligibility requirement guidelines set forth by the CPUC, we recommend that SDG&E obtain sufficient, appropriate documentation from CARE customers to clearly demonstrate eligibility for the CARE program. SDG&E’s Response SDG&E agrees with the finding and recommendation, and stated that it revised its procedures to require current eligibility documents for determining customers’ eligibility for the CARE program. SCO Comment Although SDG&E stated that it implemented corrective action regarding the finding and recommendation, we did not validate the implementation or effectiveness of this corrective action. CPUC should follow up to ensure that the corrective action was adequate and appropriate. -6- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 1— Compliance with Applicable Laws, Regulations, and Agreement Terms and Conditions APPLICABLE LAWS, REGULATIONS, AND AUDIT RESULTS AGREEMENT TERMS AND CONDITIONS CPUC GO 28. Preservation of records of public utilities and common Complied carriers CPUC D.12-08-044 Section 6.2. Fund Shifting Rules Complied CPUC D.08-11-031 Section 20. Fund Shifting Complied SDG&E CARE Post-Enrollment Verification-Completes Manual Did not comply; see Finding California Statewide Energy Savings Assistance Program Policy and Did not comply; see Finding Procedures Manual. Section 2.2.3.2. Categorical Eligibility Public Utilities Code, Division 1, Chapter 3, Article 5. Reports to the Complied Commission, 584 -7- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 2— Summary Schedule of Prior CPUC Audit Findings CPUC FINANCIAL, MANAGEMENT AND REGULATORY COMPLIANCE AUDIT REPORT ON THE CALIFORNIA ALTERNATE RATE FOR ENERGY PROGRAM ADMINISTRATIVE COSTS AND THE LOW INCOME ENERGY EFFICIENCY PROGRAM OF SAN DIEGO GAS & ELECTRIC COMPANY FOR THE YEARS ENDED DECEMBER 31, 2007 AND DECEMBER 31, 2008¹ CPUCʼs Obsevations and Recommendations Status SCO Comments FINDING VI.A.: SDG&E had not audited its Customer Assistance Reporting and Enrollments (CARE) operating system, implemented in September 2007, for integrity and reliability. SDG&E provided corrective action RECOMMENDATION: In a future audit, UAFCB should SDG&E modified procedure manuals and plans and related review the effectiveness of SDG&Eʼs actions in response provided documentation to support corrective documentation to its internal audit of its CARE [Customer Assistance actions taken per the recommendations noted for the SCO to Reporting and Enrollments] System measuring its in the internal audit. See Appendix 3. review. integrity, reliability and efficiency in qualifying and quantifying enrollment and determining whether any weaknesses exist. ____________________________ ¹ Only the prior findings for the CARE program were reviewed from this audit. A more recent audit of the Low Income Energy Efficiency program (since renamed the Energy Savings Assistance program) was reviewed for the ESA program audit conducted by the SCO. -8- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3— Summary Schedule of Prior Internal Audit Findings SEMPRA ENERGY AUDIT SERVICES: SAN DIEGO GAS AND ELECTRIC COMPANY CARE PROGRAM, PROJECT NO. 15-263 FOR THE PERIOD OF JULY 1, 2014 THROUGH AUGUST 31, 2015 Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 1: A. FERA customers are excluded from PEV selection. Excluding FERA customers from PEV will allow ineligible customers to remain undetected. B. Customer Programs has not requested the vendor to refresh the PEV scoring files since February 2014, a period of 19 months. The file contains all 280,000 CARE customers. Approximately 1,000 customer accounts are taken from the file every few weeks, uploaded into the CARE system for PEV review. Each batch taken from the file has a lower score. New CARE customers, some with higher scores, are being excluded from PEV review. C. The CARE system PEV uploaded error report has not been reviewed and errors corrected for an indeterminate amount of time. Not correcting customer data errors may exclude customer accounts from future electronic analysis. D. CARE policies and procedures are outdated: 1. The PEV Selection and Notification Process policy lacks background on the PEV selection model, how the PEV file is processed, the processing intervals, how errors are handled and error definitions. 2. The Income Calculation Procedures state that PEVs must include an Income Calculation Sheet, however for categorically qualified customers, income calculation is not necessary. Incomplete CARE PEV policies and procedures may preclude Customer Programs management and staff from fully understanding how the recertification process works. RECOMMENDATIONS: A. Perform PEV on FERA enrolled customers. SDG&E provided A. SDG&E stated that during the second through fourth B. Refresh the PEV scoring file on a periodic basis, perhaps the SCO with quarters of 2016, it took steps to include FERA customers quarterly. updated CARE within the PEV model. SDG&E stated that it began policies and performing FERA PEVs in the first quarter of 2017. Although C. Resume reviewing the PEV upload error report and procedures, and we performed tests of PEV, we did not verify that FERA correcting errors in the CARE system and CISCO. other CARE PEV customers were included in PEV as this process was not D. Update the CARE PEV Selection and Notification documents. implemented within our audit period. Process policy and the CARE Income Calculation Procedures. B. SDG&E provided screen shots of a CARE PEV data refresh in March 2016 as an example. We did not validate the continued periodic PEV scoring file refreshes during the audit period. C. SDG&E stated that it has been working on correcting data errors from the PEV upload error report since November 25, 2015. We did not validate that SDG&E corrected all errors noted in Business Issue No. 1C. D. SDG&E provided CARE policy and procedures, and they have been updated per recommendations from the internal audit report. However, we did not validate the effectiveness of the updated policy and procedures. -9- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3 (continued) Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 2: A. Testing of the HEU process noted the following errors: 1. Two of 20 HEU screenings tested noted the customers were not sent HEU 2nd request (342) letters 30 days after initial notice, nor incomplete documentation (312H) letters, which are sent if incomplete Income Validation Forms are received. The CARE system lacked letters and notes indicating the customer contacted SDG&E to extend the termination date. The two customers were terminated for non-response 67 and 81 days after the first letter was sent, whereas termination should occur after 60 days. 2. Two of 20 HEU screening events tested noted incorrect household sizes were entered into the CARE system based on the customer-returned documentation: a. The CARE system indicated five household members whereas the most recent Income Validation Form in the file indicated three household members. An older form indicated five members. b. The CARE system indicated seven household members, which was consistent with the Income Validation Form. The IRS Tax Script, however, indicated four exemptions for the household. 3. One of 20 HEU income screenings tested noted that the customer’s income was calculated incorrectly B. Customer Programs lacks a procedure to send an “incomplete documentation” (312H) letter for discrepancies in the number of household members in customer provided documentation. C. Customer Programs does not resend the HEU request (341) / follow-up (342) letters for customers who receive an HEU incomplete letter, are terminated from CARE, and then contact Customer Programs to reinitiate their HEU screening participation. Customer notification via a second round of request and follow-up letters is necessary to communicate the required response timeframes and termination policy. RECOMMENDATIONS: A. Train Program Assistants. Include the observations in SDG&E provided A. SDG&E provided the agenda and sign-in sheet for the A, above, in the training. the SCO with training on February 25, 2016. The agenda included the B. Use the 312H letter to inquire about discrepancies in updated CARE observations noted in Business Issue No. 2A. household member documentation. procedures and B. We reviewed SDG&Eʼs HEU Incomplete Process other CARE PEV C. Design a new letter or resend 341/342 letters to procedures, updated February 24, 2016, which explain how to documents. terminated HEU customers who contact Customer process 312H letters. Although we performed tests of PEV, Programs to be reinstated in the CARE program. we did not verify the use of the 312H letters. C. We reviewed SDG&Eʼs HEU CARE Deleted Due to Non- Response procedures, updated February 24, 2016, which include how to process 341 and 342 letters. Although we performed tests of PEV, we did not verify the use of the 341 and 342 letters. -10- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3 (continued) Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 3: A. The CARE recertification process has not been fully documented by Customer Programs: 1. A 2007 document identifies six customer attributes but it is not known if these are actual attributes scored, nor if they were the actual attributes implemented. 2. The 2007 document does not identify if customer scores above the qualifying factor (.030) get the recertification letter or are automatically recertified. 3. The process to assign a two year or four year recertification cycle to CARE customers is not d4.o Ccuumsteonmteedr .Programs internal policies and procedures do not fully describe the recertification process. For example, the procedures do not document the use and timing of the outgoing recertification request and reminder letters. An undocumented CARE certification process may preclude Customer Programs from: • Fully understanding how the recertification process w• Aorskssessing if it is still relevant and fair • Demonstrating compliance to outside parties B. Self-assessed – Customer Programs does not understand how data errors are handled by the CISCO Recertification routine. An example error is “value missing for a customer attribute”. Not understanding and correcting errors generated by the recertification routine may indefinitely preclude some customers from being selected for recertification. C. Recertification request (315) letter and reminder (316) letter do not disclose to the CARE customer they will be terminated if they fail to respond to the request. The lack of a disclosure is inconsistent with the CARE program guidelines and with the Post Enrollment Verification (PEV) request letter, which includes the disclosure. RECOMMENDATIONS: A. Fully document the recertification process including the SDG&E provided A. SDG&E provided Enrollment and Recertification Process probability model. Determine if the probability model is still the SCO with procedures and Recertification Probability Model relevant and fair to both CARE customers and rate payers updated CARE procedures, which document the recertification process, paying the Public Purpose Program charge. Maintain the procedures and including the probability model. We did not test the documentation as a Company Record. other CARE PEV effectiveness of the implementation of these procedures. B. Analyze the CISCO recertification routine to understand documents. SDG&E did not address whether the probability model is how errors are handled. Ensure that errors are reasonably relevant and fair to both CARE customers and rate payers handled and do not result in a customer’s exclusion from paying the Public Purpose Program charge. the recertification process. B. SDG&E provided recertification procedures, which C. Modify recertification request letters 315 and 316 to address how to handle empty entries for two fields. include the non-response termination disclosure. However, it does not address any other errors. We did not determine if errors were reasonably handled, and we did not test the effectiveness of the procedures. C. SDG&E provided a copy of the advice letter and copies of revised letters (310, 315, and 615) sent on December 7, 2015 to the CPUC. Our review of the letters showed that they include the non-response termination disclosure. We did not verify SDG&Eʼs use of the letters. SDG&E did not address revisions to 316 letters. -11- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3 (continued) Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 4: A. The Customer Programs employee responsible to process incoming CARE mail safeguards customer’s financial and public assistance records by locking the records in a cabinet during work breaks, lunch, and non- working hours. The locking cabinet is located in conference room 2-685. If this conference room is in use during the employee’s off-time, the employee hides the rHeicdoinrdgs s uenndseitri vthe eciur sdteosmk.er records is an inadequate method to safeguard records and may be inconsistent with regulatory requirements. B. Eight of 20 HEU screening events tested noted no or poor masking of sensitive customer information on the customer provided income support documentation. C. Customer Programs CARE procedures do not reference Customer Program’s policy on safeguarding customer data and records. RECOMMENDATIONS: A. Configure the employee’s desk with a sturdy, lockable Follow-up was Business Issue No. 4 did not relate to the audit objectives. drawer. If this is not feasible, consider: not considered Therefore, we did not consider follow-up to be necessary. necessary. 1. Moving the filing cabinet adjacent to the employee’s work area. 2. Procuring a lockable cabinet for the employee’s work area. B. Determine why customer records are not being adequately masked and implement a solution. C. Cross reference the CARE procedures to Customer Programs’ policy on safeguarding customer data and records. -12- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3 (continued) Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 5: A. Testing noted instances of a second PEV reminder request (311) letter being sent to CARE customers. An examination of the CARE system and CISCO CCON’s noted the absence of customer contacts indicating the customer asked for a PEV extension of time. What triggered the 2nd reminder letter to be sent was not determined. The two customers were non-responders and were terminated in approximately 120 days instead of the policy-specified 90 days as a result of the second reminder letters. The same situation existed for recertification requests where two customers were terminated after 120 days, instead of 90. Not terminating non-respondent CARE customers on a timely basis overstates CARE enrollment, may be contrary to regulatory requirements, and increases the Public Purpose Program charge. B. Customer Program’s CARE Post Enrollment Verification: Completes, Active & Deleted policy: 1. Lacks instruction on: a. PEV and recertification extensions. b. Adding a customer contact notation in the CARE system or in CISCO for customer requests for ecx. tSeennsdioinngs .a second letter for PEVs and recertifications. 2. Incorrectly states the PEV reminder letter is sent 45 days after the initial letter. The letter is actually sent approximately 60 days (the correct timeframe) after the initial letter. RECOMMENDATIONS: A. Determine the cause of the duplicate letters and take SDG&E provided A. SDG&E did not address the cause of the duplicate letters. corrective actions. the SCO with However, SDG&E states that it has changed its processes updated such that letters will be sent out of the CARE system rather B. Update the CARE Post Enrollment Verification: procedures. than the CISCO system to prevent duplicate letters. We did Completes, Active & Deleted policy for the items noted not test the effectiveness of this process. above. B. Per review of SDG&Eʼs Enrollment and Recertification Process procedures, revised March 14, 2016, and CARE Post Enrollment Verification – Incomplete procedures, revised March 14, 2016, there are instructions for extension notations (Business Issue No. 5B1a) and sending second letters (Business Issue No. 5B1c). Business Issue No. 5B1b did not relate to the audit objectives. Therefore, follow-up was not considered necessary for that issue. In addition, the above noted procedures state that letters will be sent 60 days after the initial letter. We did not test the effectiveness of remediation for these procedures. -13- San Diego Gas & Electric Company California Alternate Rates for Energy Program Appendix 3 (continued) Business Issues and Recommendations Status SCO Comments BUSINESS ISSUE NO. 6: A. Five of 13 paper CARE applications tested (38%) were processed untimely. The duration of days to process ranged from 31 to 52 days. B. Customer Program’s CARE Enrollment and Recertification Process procedures are incomplete. The procedures lack: 1. Instructions for working the CARE system electronic application queue. 2. The regulatory prescribed 30 day requirement to process customer CARE applications. 3. A statement that the CARE system automatically calculates customer eligibility based on the data entered into the system. RECOMMENDATIONS: A. Determine the root cause of the untimely processed SDG&E provided A. SDG&E stated that the cause of the untimely processed customer CARE applications. Consider using an aging the SCO with CARE applications was due to inexperienced staff. SDG&E report to identify untimely processing. updated stated that a training session was conducted the week of procedures. December 14, 2015. We did not validate the training session. B. Update Customer Program’s CARE Enrollment and Recertification Process procedures for the items in B., B. Per review of Enrollment and Recertification Process above. procedures, items B2 and B3 are included. SDG&E did not provide instructions for working the CARE system electronic application queue (B1). -14- San Diego Gas & Electric Company California Alternate Rates for Energy Program Attachment— San Diego Gas & Electric Company’s Response to Draft Audit Report State Controller’s Office Division of Audits Post Office Box 942850 Sacramento, CA 94250 http://www.sco.ca.gov S17-LIQ-0006