HomeMy WebLinkAbout04112022 City Council Laydown - Greene Forensic Accounting GREENE LLP
220411 LAYDOWN - CC Meeting
Forensic Accounting Solutions
t
City
of S
Forensic Utility Audit
April 11 , 2022
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Presenters
►Jim Edmonstone, CPA, CFE , CGMA, MBA -
Strategic Partner
►Jim Scordo, CFE - Manager
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Classification
The classification system is inconsistently ...
applied , and the definition of a
residential customer is confusing.
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Equivalent Residential Units ( ERUs )
The City has a database showing the number of ERUs being charged to
each Customer, but not the rationale supporting the number of ERUs.
There appears to be no formal method for updating ERU counts.
► Customers do not appear to understand the basis of ERU charges.
► No adjustment process for business changes or events such as the
Pandemic.
Limited Testing indicated that ERUs were not accurately estimating large
customer usage.
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Power Factor
Power Factor Rate is in the Electric Tariff but not being charged.
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Cost of Power Adjustment (COPA)
► Intent is to allocate the City's monthly Chugach bill to Seward Electric
customers.
► Tariff allows straight allocation or smoothing to minimize rate fluctuations.
► Recommendation that Stand-by Generation System be separated from
COPA calculation.
► Establish General Ledger Account to track allocation.
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Demand Charges
P Large General Service Customers are subject to demand charges.
► Measured in kilowatts (kW) registered over a 15-minute period during the
month.
► Customers may have meters capable of measuring demand but may not
be charged demand.
► Chugach charges demand to the City in its monthly invoice.
► Chugach's demand charge is allocated to all Seward Electric Customers,
not just demand customers. s�
► Smart Metering ������
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i
Analysis of 2018 and 2019 Customer Charges
!
The City does not maintain copies of individual customer
invoices.
Unknown rates were used throughout the different billing
codes.
Prior period rates are charged in the current period.
Tariff rates are charged under an incorrect billing code.
Rates were established and used regularly in practice that are
not in the Tariff.
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Recommendations
► The City should standardize its definitions across the tariffs, ordinances, and
regulations.
► The electrical invoicing should be a separate function, with billing performed by the
Electrical Department.
► ERUs should be phased out in favor of meters.
► There needs to be a system of check and balances.
► Power Factor charges should be invoiced.
► The COPA adjustment should be formalized through a General Ledger Tracking account
to ensure the City is recovering its expenditures.
► The City should maintain electronic copies of customer invoices.
► The City should implement tracking logs to note inputs and adjustments. Adjustments
should require secondary approval. Input logs should be reviewed and approved by
managers.
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