20230606Affidavit J. Kalala-Kasanda.pdf

. ' -- (' :-:-i \ I r.: D , -. •>4o-·-•:..._J V .._., BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF CAMBRIDGE ) TELEPHONE COMPANY'S OBJECTION TO ) ITS 2023 ANNUAL ASSESSMENT FEES )
) ____________)
STATE OF IDAHO )
:ss County of Ada )
CASE NO. CAM,T-2}-0J, ., , ,, ...-' � � '',) L l 1.._J
AFFIDAVIT OF .�-i\;\�i,::�Si1.�.-N
JOHAN KALALA-KASANDA
I, Johan E. Kalala-Kasanda, being first duly sworn under oath, depose and state as follows:
1.My name is Johan E. Kalala-Kasanda. I am over 21 years of age, of sound mind, and I have
personal knowledge of the facts stated herein.
2.The information contained herein is true and correct to the best of my knowledge and belief
3.I am a Utilities Analyst 2 -Telecommunications, at the Idaho Public Utilities Commission
("Commission"). I have been employed at the Commission since November 2017. I am
responsible for telecommunication companies' applications to the Commission.
4.On May 15, 2023, Cambridge Telephone Company ("Cambridge" or "Company") filed an
objection, pursuant to Idaho Code § 61-1007, to the Company's 2023 annual Assessment
Fee. The Company included attachments and exhibits, documenting the Commission's fee
assessment invoice as well as the Company's revised Gross Intrastate Operating Revenues
("GIOR") for the calendar year 2022.
5.The Commission's operating budget is derived from the assessment of regulatory fees upon
utilities who are subject to the Commission's jurisdiction. Idaho Code§ 61-1003 provides
that on or before April 1st of each year, each utility company shall report its gross operating
revenues from its intrastate business in Idaho for the preceding calendar year.
6.Based upon the total amount of GIOR reported by all the public utilities, the Commission
then determines the proportionate assessment applicable to each public utility to recover
the Legislature's authorized appropriation.
7.Once each public utility's assessment is determined, the Commission notifies the public
utility of its regulatory fee no later than May 1st of each year. Such a fee shall be paid to
the Commission in equal semi-annual installments. Idaho Code § 61-1005. Any public
utility may object to the fee "on or before the time specified for payment for the first
AFFIDAVIT OF JOHAN E. KALALA-KASANDA
installment of the assessment made against it." Idaho Code § 61-1007.
8.In its Objection email to the Commission, the Company stated:
The 2022 revenues relating to "Idaho Only" (intra-state) was significantly overstated thus increasing our assessment for 2023. This was the result of me erroneously including inter-state revenues. We
realized the mistake after we received your assessments for 2022. I
would like to apologize for the error and hope you can accept the
revised 2023 Operator's Statement. The change in the assessment is significant to us $1,839.57 versus $8,884.29.
See Attachment C.
9.Based upon the definition of GIORs, Staff calculated that Cambridge Telephone
Company's GIOR for 2022 should be $4,962,101.66. See Attachment A.
10.Staff recommends that the Company and all of its subsidiaries be audited again for the next
filing, with a special focus on the procedures implemented and the effectiveness of these
changes.
11.Staff recommends that the Company be ordered to conduct a separation study of its
interstate I and intrastate2 gross operating revenues.
12.Staff recommends that the adoption of guidelines for the reporting of gross intrastate
operating revenues be established so as to standardize the reporting procedures for all
public utility companies.
13.For the purpose of regulatory assessment, the definition of the GIOR was provided in
Commission Order No. 28760 of Case No. EIR-R-01-01. On page 10 of this Order, the
Commission stated:
Idaho Code§ 63-3011 defines the term gross income as having the same meaning as defined in Section 61 (a) of the Internal Revenue
Code. The Tax Code defines gross income as all income from
whatever sources derived, including (but not limited to) the following items: compensation for services, including fees, commissions, fringe benefits, and similar items; gross income
derived from business; gains derived from dealings in property; interests; rents; royalties; dividends; annuities, income from life insurance and endowment contracts; pensions; income from discharge of indebtedness; distributive shares of partnership gross
1 Interstate gross operating revenues means operating revenues generated from business activities conducted "between states." 2 Intrastate gross operating revenues means operating revenues generated from business activities conducted "within a state, such as Idaho."
AFFIDAVIT OF JOHAN E. KALALA-KASANDA 2
income; income in respect of a decedent; and income from an
interest in an estate or trust. 26 U.S.C. § 61(a). In discussing the
concept of gross income, our Supreme Court has interpreted gross income as including income from any source. Henderson v. Smith, 128 Idaho 444, 915 P.2d 6 (1996) (construing the Idaho Child Support Guideline, I.R.C.P. 6(c)(6)).
Order No. 28760 (internal quotations and changes omitted). Therefore, Staff followed the
methodology determined in Order No. 28760 to determine intrastate revenues as all
revenues that are generated as a result of the Company's activities that occur only in the
State of Idaho. The origination and ultimate destination must be within the state.
14. Staff performed several substantive tests of the reported revenue. The testing of relevant
assertions included: completeness, accuracy, valuation and allocation, existence, cutoff,
occurrence, and classification and understandability. As explained below, Staff found that
the Company erroneously reported its intrastate revenues.
15.The reported revenues are classified into revenue accounts and these revenue accounts are
broken into categories that Staff established for intrastate operating revenues. These
categories generally mirror revenue accounts established by the Code of Federal
Regulation ("CFR"), 47 CFR Part 32 Subpart D. The Code provides the Uniform System
of Accounts for Telecommunications Companies.
16.The revenue accounts include the actual cash revenues (or equivalents) that have or will
occur as a result of the company's ongoing major or central operations during the period.
They include the revenues which arise from furnishing regulated telecommunications
services to others, from directory advertising, rentals of telecommunications assets and
from providing other services which are directly associated with the provision of regulated
telecommunications services.
1 7. Staff does not believe operating revenues were accurately reported or properly updated by
the Company. This is because, since January 2023, the Company has reported four different
amounts of GIOR. In the annual report filed to the Commission on April 14, 2023, the
Company's GIOR was reported to be $5,795,067.85. On March 3, 2023, the GIOR reported
was $4,482,487. On May 15, 2023, the Company filed a revised GIOR of $928,139,
claiming calculation errors. The latest revised GIOR was filed by the Company on May
25, 2023, in the amount of 1,258,533.94. See Attachment A.
AFFIDAVIT OF JOHAN E. KALALA-KASANDA 3
18.During the audit, Staff uncovered numerous inaccuracies in the calculations of account
balances, misclassifications, and inappropriate presentation of account balances. The
Company did not fully respond to the first round of audit requests issued by Staff.
19.Staff was particularly concerned with different classifications that the Company reported
in the accounts 5250 Corporate Operations Revenue of $1,306,4403 and 5280 Nonregulated
Operating Revenue of the same amount of $1,306,440.4 In the annual report filed with the
Commission on April 14, 2023, this was allocated to sub-account 5250. However, in the
revised GIOR forms the Company moved these revenues to account 5280 Nonregulated
Operating Revenue and made this a basis for its filing error. Staff does not agree with this
presentation.
20.For the reasons outlined above, Staff believes that it is inappropriate for the Commission
to accept any of the four versions of the GIOR submitted by the Company. Staff
recommends that the Commission accept the amount of $4,962,101.66 as the GIOR for the
Company for the year 2022.
21.Staff recommends an audit of the internal oversight/controls and intrastate revenues be
completed for the operating year 2023 by Commission Staff, with a special focus on the
procedures implemented and the effectiveness of these changes. The audit will determine
compliance with the definition of Intrastate Revenues as provided by the Commission.
22. Staff also recommends that the Company be ordered to conduct a separation study of its
interstate and intrastate gross operating revenues. Additionally, Staff recommends that the
adoption of guidelines for the reporting of gross intrastate operating revenues be
established so as to standardize the reporting procedures for all public utility companies.
Dated this � day of June 2023.
J, an . Kalala-Kasanda
tilities Analyst 2 Idaho Public Utilities Commission 3 As shown in Attachment Band on line 34 of column E in Attachment A. 4 As shown in Attachment D and the total of lines 38 to 54 in Attachment A.
AFFIDAVIT OF JOHAN E. KALALA-KASANDA 4
SUBSCRIBED AND SWORN to before me this� day of June 2023.
*****
Notary Publifor Idaho
Residing at: Boise, Idaho
Commission expires: March 15, 2025
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 6th day of June 2023, I served the foregoing
AFFIDAVIT OF JOHAN KALALA-KASANDA, in Case No. CAM-T-23-01, via Electronic
Mail to the following:
Cynthia A. Melillo, PLLC 8385 W. Emerald Street Boise, Idaho 83 704
[e-mail]
I \Legal\TELECOM\CAM-T-23-0 I \CAMT230 I _Johan _Affidavit docx
Richard Wiggins [e-mail]
Bachchi Samahon-Oumar [e-mail]
Keri J. Hawkr Legal Administrative Assistant
AFFlDA VIT OF JOHAN E. KALALA-KASANDA 5
Attachment A
Affidavit of Johan E. Kalala-Kasanda
Case No. CAM-T-23-01
Lines ACCOUNT NAME: Revenue Source/Activitv I LOCAL SERVICE REVENUE 2 LOCAL SERVICE REVENUE -E-91 I 3 LOCAL EXCHANGE REVENUE-OTHER 4 LOCAL SERVICE REVENUE -VOICE MAIL 5 OTHER LOCAL EXCHANGE SETTLEMENTS 6 ACAM SUPPORT REVENUE 7 INTERSTATE LIFELINE REVENUE 8 CAF BROADBAND LOOP SUPPORT 9 END USER REVENUE (SLC) 10 INTERSTATE END USER REVENUE II FEDERAL USF END USER CHARGE 12 FEDERAL ACCESS RECOVERY CHARGE SINGLE LINE 13 SWITCHED ACCESS REVENUE (INTERSTATE) 14 INTERSTATE SWITCHED ACCESS -CABS -TS 15 INTERS TA TE PIC CHANGE CHARGES 16 INTERSTATE SWITCHED ACCESS -NECA -TS 17 INTERS TA TE FACILITY ACCESS ETHERNET 18 INTERSTATE FACILITY ACCESS END USER 19 INTERSTATE FACILITY ACCESS CARRJER 20 PRIOR PERIODS· NECA 21 OS L WHOLESALED TO CTC TELECOM 22 STATE ACCESS REVENUE (INT RAST A TE) 23 INTRASTATE SPECIAL ACCESS 24 INTRASTATE SWITCHED ACCESS CABS TIS 25 ST A TE/INTRA LAT A SWITCHED ACCESS • CABS • CCL 26 IDAHO UNIVERSAL SERVICE FUND REVENUE 27 PIC CHANGES 28 INTERS TA TE REVENUE -SCHOOLS AND LIBRARIES 29 LI FELINE S ER VICE REVENUE 30 TOLL CLEARING 31 DIRECTORY REVENUE 32 RENT REVENUE 34 CORPORA TE OPERATIONS REVENUE 35 MISCELLANEOUS REVENUE -INTRASTATE 36 MISCELLANEOUS REVENUE 37 OTHER INCIDENTALREGULA TED REVENUE 38 IS-OSP-VAUL TS/CABINETS/FIBER 39 IS-CPE-INSIDE WIRE/JACKS
CAMBRIDGE TELEPHONE COMPANY
PUC COMMISSION AUDIT GROSS ANNUAL INTRASTATE REVENUE AS OF 12/31/2022
Lompan)'
Company Reported Company Reported as on Annual Report Report on Revised I 2023 GIOR Form Objection 4/14/2023 29/3/2023 S/15/2023 A-I A-2 A-3
Code I Code 2
Account No. Account No. IDAHO - I IDAH0-2 IDAHO-3 5001 5001 $ (433,455 $ (430,825 00 s (430.825 00 5001.5 5001 $ $ (I 74.61) $ 5060 5060 $ (56.844 $ (18 577.15 $ (18,302 66 5060.1 5060 $ $ (37.984 13 $ (37,984.13 5069 5069 s (2.891.058 $ $ 5069.1 5069 $ $ (2,891,180 28 $ 5069.2 5069 $ $ 122.75 $ 5069.3 5069 s s $ 5081 5081 $ ( 155.654 5081 508 I $ $ (I 14.457.03 $ 5081.1 5081 s $ !34.045.47 $ 5081.3 508 I $ $ (6,404.50 $ 5082 5082 $ (719.212 5082.1 5082 $ $ (114,617.83 $ 5082.11 5082 $ $ $ 5082.2 5082 $ $ (329,030.00 $ 5082.22 5082 $ $ ( 115.429. 74 $ 5082.23 5082 $ s (65,426.38 $ 5082.24 5082 $ $ (94,707 84 $ 5082.25 5082 $ $ 2.185.79 $ .
5083.11 5083 s $ $ 5084 8084 $ (221.493 $ 5084.1 5084 $ (47 172.60 $ (47.17260 5084.5 5084 $ (44.307.33 $ (44,307 33 5084.51 5084 $ (2,931.01 $ (2.931.01 5084.52 5084 $ ( 126.655 68 $ (126.655 68 5084.55 5084 $ $ s 5084.6 5084 $ $ $ 5084.9 5084 $ $ 5100.99 5100 $ $ $ 5230 5230 s (4.932 $ (4 888.00 $ (4 888.00 5240 5240 $ (4.200 $ (4.200.00 $ 5250 5250 $ ( I 306.440 5260.1 5260 $ (171.41 s5260.2 5260 $ 343.04 $ 5264 5264 $ (172 5280.0 I 5280 $ $ 5280 02 5280 $ $
Attachment A -Comparisons
Lompany
Reported as Revised 2 -Audit STAFF Request Calculations S/25/2023 6/1/2023 A-4 A-5
IDAHO-4 IDAHO
$ (433,280.66) $ (433,280.66) $ (174 61 $ (17461 $ ( 18.859 87 $ (18,85987 s (37,984 13 $ (3798413 s $ $ (326,992.49) $ (2,891.180.28 $ . $ s $
$ $ $ $ (34.045.47 $ $ (6.404.50 $ $ s $ $ $ s $ s $ $ $ $ $
$ $
$ (47. 172.60 $ (47.172.60 $ (44.307 33 $ (44,307.33 $ (2,931.0 I $ (2,93101 $ ( 126.655 68 $ (126,655.68 $ $ $ (426.57 $
$ ( 4.931.56 $ (4 931.56 $ (4.200.00
$ (171.41 $ (171.41 $ (343.04
$ (6,451.13) $ (852.16)
6/5/2023
Lines ACCOUNT NAME: Revenue Source/Activitv 40 IS-OPEN 41 IS-ROUTERS/MODEMS/ROKU 42 IS-CTC BUS.-POL YCOM/SWlTCHES 43 IS-ELECTRONICS & NETWORK EOP. 45 IS-CELL PHONE & ACCESSORJES 46 IS-WILDERNESS WIRELESS 47 IS-ONTS 48 NON-REGULATED REVENUE - OTHER 49 NON-REGULATED REVENUE -CPE 50 SYRJNGA fNCOME -ELECTRONIC EQUIPMENT 51 SYRJNGA fNCOME -FIBER TRANSPORT LEASE 52 REVENUE 53 NON-REGULATED REVENUE -FIBER LEASE 54 NON-REGULATED REVENUE -INTERNET 55 UNCOLLECTIBLE OPERA TING REVENUES -INTERS TAT! 56 UNCOLLECTIBLE OP. REVENUES -INTRASTATE 57 58 Grand Totals CAMBRIDGE TELEPHONE COMPANY PUC COMMISSION AUDIT GROSS ANNUAL INTRASTATE REVENUE AS OF 12/31/2022 Lompany Company Reported Company Reported as on Annual Report Report on Revised 1 -2023 GIOR Form Objection 4/14/2023 29/3/2023 5/15/2023 A-I A-2 A-3
Code I Code 2 Account No. Account No. IDAHO-I IDAH0-2 IDAH0-3 5280 03 5280 $ $ $ 5280.04 5280 $ $ 5280.05 5280 $ $ 5280 06 5280 $ s 5280.07 5280 $ $ 5280.08 5280 $ $ 5280.09 5280 $ $ 5280.1 5280 $ $ 5280.2 5280 $ $ 5280.5 5280 $ $ (68.49600 5280.51 5280 $ $ (144,624.00 5280.6 5280 $ $ $ 5280. 7 5280 $ s 5280.9 5280 $ $ 5301 5301 s s $ 5301.1 5301 $ (1,953 s (1,952.59 $ (1.95259 $ (5,795,413) S (4,482,487.00) S (928,139.00)
Attachment A -Comparisons
LOmpany Reported as Revised 2 -Audit STAFF
Reau est Calculations 5/25/2023 6/1/2023 A-4 A -5
IDAHO-4 IDAHO $ $ (2.10181 $ (465 99 $ $ (320.4 I $ (63359 $ (139 39 $ (875.00 $ (2 457.41 s (68.496 00 $ (68.496.00 $ (144,624 00 $ (144 624.00 $ $ (524 55 $ (1,079,138.91 $ $ ( I 952.59 $ (1,952.59 $ (1,258,533.941 $ 14,962,101.661 6/5/2023
Attachment B
Affidavit of Johan E. Kalala-Kasanda
Case No. CAM-T-23-01
OPERATING REVENUES
Item
Local Network Services Revenues
5001 Basic Area Revenue
5002 Optional Extended Area Revenue
5003 Cellular Mobile Revenue
5004 Other Mobile Services Revenue
5010 Public Telephone Revenue
5040 Local Private Line Revenue
5050 Customer Premises Revenue
5060 Other Local Exchange Revenue
5069 Other Local Exchange Settlements
Network Access Services Revenues
5081 End User Revenue (SLC)
5082 Switched Access Revenue (Interstate)
5083 Special Access Revenue
5084 State Access Revenue (Intrastate)
Long Distance Network Services Revenues
5100 Long Distance Message Revenue-All
Miscellaneous Revenues
5230 Directory Revenue
5240 Rent Revenue
5250 Corporate Operations Revenue
5261 Special Billing Arrangements Revenue
5262 Customer Operations Revenue
5263 Plant Operations Revenue
5264 Other Incidental Regulated Revenue
5269 Other Revenue Settlements
5270 Carrier Billing & Collection Revenue
Uncollectible Revenues
5301 Uncollectible Revenue -Telecommunications
5302 Uncollectible Revenue -Other
TOTAL OPERA TING REVENUES
Please identify the following revenues:
Total Company
433,455
56,844
2,891,058
155,654
719,212
0
221,493
4,932
4,200
1,306,440
(172)
0
1,953
5,795,068
NECA USF $2,891,180. To what account were they booked?
State USF $126,655. To what account were they booked?
Rev 3/02 Page 15
Idaho Only
Same as
total company
5069.10
5084.52
These financial statements have not been subjected to an audit, review or compilation engagement, and no
assurance is provided for them.
Attachment C
Affidavit of Johan E. Kalala-Kasanda
Case No. CAM-T-23-01
From: Bachchi Samahon-Oumar <[e-mail]>
Sent: Monday, May 15, 2023 1:57 PM
To: Nancy Ashcraft <[e-mail]>
Cc: Tyler McGill <[e-mail]>; Kerry Kindall <[e-mail]>; Rick Wiggins
<[e-mail]>; Bachchi Samahon-Oumar <[e-mail]>
Subject: 2023 Revised Operator's Statement -Cambridge Telephone Company
CAUTION: This email originated outside the State of Idaho network. Verify links and attachments
BEFORE you click or open, even if you recognize and/or trust the sender. Contact your agency
service desk with any concerns. -------Hi Nancy, Good afternoon! Pursuant to our conversation this morning, I would like to forward a revised 2023Operator's Statement for Cambridge Telephone Company. The 2022 revenues relating to "Idaho Only" (intra-state) was significantly overstated thus increasing our assessment for 2023. This was the result of me erroneously including inter-state revenues. We realized the mistake after we received your assessments for 2022. I would like to apologize for the error and hope you can accept the revised 2023 Operator's Statement. The change in the assessment is significant to us $1,839.57 versus $8,884.29. We will send the assessment check once I hear from you.
CAMBRIDGE TELEPHONE COMPANY
2022 REVENUES
5001 Basic Area Revenues
5060 Other Local Exchange Revenues
5069 Other Local Exchange Settlements
5081 End User Revenues
5082 Swithched Access Revenues [Interstate]
5084 State Access Revenues [Intra-State]
5230 Director Revenues
5240 Rent Revenues
5264 Other Incidental Regulated Revenues
5280 Other Revenues
5301 Uncollectible Revenues
2023 Utilities Assessment
Thank you.
Sincerely, Bachchi Samahon-Oumar, MAcct., CPA Chief Financial Officer
208-473-1441 I Cell
208-229-8178 I Fax: [phone] [e-mail] �www�:;b-� 31-Dec-22 31-Dec-22
ORIGINAL REVISED
Idaho Only Idaho Only
$ 430,825 $ 430,825
$ 56,286 $ 56,286
$ 2,891,058 $
$ 154,907 $
$ 717,026 $
$ 221,067 $ 221,067
$ 4,888 $ 4,888
$ 4,200 $
$ 277 $
$ $ 213,120
$ l,953 $ 1,953
$ 4,482,487 $ 928,139
0.1?82% 0.1982%
$ 8,884.29 $ l,839.57
Change => $ 7,044.72
Attachment D
Affidavit of Johan E. Kalala-Kasanda
Case No. CAM-T-23-01
CAMBRIDGE TELEPHONE COMPANY
NOTE "B" PUC COMMISSION AUDIT GENERAL LEDGER AS OF 12/31/2022 [AUDITED]
5250 CORPORTE OPERATIONS Codel Code2
IS-OSP-VAULTSLCABINETSLFIBER 5280.01 5280
IS-CPE-INSIDE WIRELJACKS 5280.02 5280
IS-OPEN 5280.03 5280
IS-ROUTERSLMODEMSLROKU 5280.04 5280
IS-CTC BUS.-POLYCOMLSWITCHES 5280.05 5280
IS-ELECTRONICS & NETWORK EQP. 5280.06 5280
IS-CELL PHONE & ACCESSORIES 5280.07 5280
IS-WILDERNESS WIRELESS 5280.08 5280
IS-ONTS 5280.09 5280
NON-REGULATED REVENUE -OTHER 5280.10 5280
NON-REGULATED REVENUE -CPE 5280.20 5280
SYRINGA INCOME -ELECTRONIC EQUIPMENT 5280.50 5280
SYRINGA INCOME -FIBER TRANSPORT LEASE 5280.51 5280
REVENUE 5280.60 5280
NON-REGULATED REVENUE -FIBER LEASE 5280.70 5280
NON-REGULATED REVENUE -INTERNET 5280.90 5280
B-1 =>
2023 Cambridge PUC Audit Notes 5.25.23
31-Dec-23Audited
Amount
$ (6,451.13)
$ (852.16)
$
$ (2,101.81)
$ (465.99)
$
$ 320.41
$ (633.59)
$ (139.39)
$ (875.00)
$ (2,457.41)
$ (68,496.00)
$ (144,624.00)
$
$ (524.55)
$ (1,079,138.91)
I sc1,3o6,439.53)
6/2/2023