5. Audit of SGIP Collections and Expenditures

The ALJ ruling proposed that the Commission direct the SGIP PAs to obtain an independent audit of SGIP ratepayer collections and expenditures, funded from the SGIP administrative budget, to ensure that expenditures do not exceed authorized budgets and the proper management of carryover funds.

DRA supports the audit proposal and recommends audits be performed annually. CCSE, SCE, and SDG&E/SoCalGas support the audit proposal. PG&E questions the need for a formal audit by an independent third party.

Given the different accounting methods used by each utility and the discrepancies in collection and carryover in funds, we agree that an audit will provide important financial information on the collections, expenditures, and the availability of carryover funding. We adopt the proposal in the ALJ ruling and direct the SGIP PAs to issue a request for proposals (RFP) no later than April 1, 2010, after consultation with Energy Division, to obtain an independent entity to conduct an audit of SGIP expenditures and ratepayer collections to ensure expenditures do not exceed authorized budgets and the proper management of carryover funds. The audit shall review the status of program applications, including confirmed reservations and applications that have dropped out, to determine the total amount of funds spent and reserved in SGIP Levels 1, 2, and 3, and the total authorized carryover available for the program. In addition, the audit should include an assessment of any interest earned on SGIP memorandum account balances over the course of the Program, to more accurately reflect account balances and funds remaining. Energy Division should oversee the scope of audit to ensure it meets the goals described in this decision. The audit shall be completed by October 1, 2010, and submitted to Energy Division within seven days of its completion, with a copy to the service list of this proceeding. If the audit finds discrepancies between the SGIP account balances reported by the IOUs in January 2010 and the audit, the audit should include recommendations for adjustments to reconcile these discrepancies.