CUC has 8 delinquent audit recommendations

The Commonwealth Utilities Corp. has yet to comply with eight audit recommendations—two of which date from as far back as 1995—from the Office of the Public Auditor.

Based on OPA’s audit recommendations tracking system report from 1995 to 2003, CUC has eight resolved and delinquent recommendations. This means that the agency had satisfied OPA that it could not take immediate action on the issues, but allowed the recommendations to be left outstanding for over 180 days.

OPA’s latest follow-up letter to CUC regarding the recommendations was issued last April 13. CUC, however, has failed to address the issues as of Aug. 26.

The public auditor’s report also showed that CUC posted the second highest number of delinquent audit recommendations. The utility corporation followed the Department of Finance, with 11 delinquent recommendations.

“It is not unusual for Finance to have the most number of outstanding recommendations because its responsibilities extend government-wide,” noted public auditor Mike Sablan.

While most other agencies have reduced or eliminated their delinquencies, CUC’s delinquent recommendations increased from four by the end of 2002, to eight by the end of 2003.

CUC chair Francisco Q. Guerrero said he has yet to see a copy of OPA’s tracking report, but he would check with the management on the current status of each recommendation.

Two of the recommendations, which date way back in August 1995, were made in an audit of advances to the former executive director.

OPA has directed CUC to establish and implement policies on expenses for official representation, entertainment, and other similar expenses. CUC was also told to require the comptroller to develop procedures on purchases requiring cash payment, wire transfer, and allowability of cash purchases for reimbursement.

Another two recommendations pertain to the OPA’s August 2002 audit of CUC’s small purchases from Oct. 1, 1999 through March 31, 2001. Again, Babauta said the management had acted on the recommendations and requested the board for action.

In January 2003, OPA also issued an audit of CUC’s personnel hiring from Oct. 1, 1999 through July 15, 2001. In that audit, OPA asked CUC to establish a comprehensive personnel rules and regulations, as well as CUC’s own classification and compensation schedule.

Also in January 2003, the public auditor asked CUC in January 2003 to include promotion and salary increase justifications, and the various forms of premium pay it plans to use, as well as to conform to the requirements of the Fair Labor Standards Act concerning computation of overtime. This came following an audit of CUC’s release of premium pay, overtime, and salary increases from Oct. 1, 1999 through Sept. 30, 2001.

Last Oct. 17, CUC executive director Lorraine Babauta informed OPA that the proposed policies were completed and awaiting adoption by the CUC board of directors.

To date, OPA has yet to receive a copy of the promulgated or amended policies mentioned.