20230606Affidavit J. Kalala-Kasanda.pdf

;:'.� :EiVED
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF CTC TELECOM, INC.'S OBJECTION TO ITS 2023 ANNUAL ASSESSMENT FEES
, .. l .. ':-.; PP 2: '?5 . ·''--" 0 ,l J
) CASE NO. CTL-T-2�i01c-,uc
) . -� :·· __ ) iy·; �J ! :; � l �;��
) AFFIDAVIT OF ) JOHAN E. KALALA-KASANDA
-------------------)
STATE OF IDAHO )
:ss
County of Ada )
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, CIC Telecom Inc. ("CIC Telecom" 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 ofregulatory 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 fee shall be paid to
the Commission in equal semi-annual installments." Idaho Code § 61-1005. Any public
AFFIDAVIT OF JOHAN E. KALALA-KASANDA
utility may object to the fee "on or before the time specified for payment for the first
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 $215.35 versus $11,638.53.
See Attachment C.
9.Based upon the definition of GIORs, Staff calculated that the Company's GIOR for 2022
should be $5,910,757.66. See Attachment A.
10.Staff recommends that the Company 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 1 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 6l(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 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
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
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 different
amounts of GIOR. In the annual report filed to the Commission on April 14, 2023, the
Company's GIOR was reported to be $5,814,258. On March 3, 2023, the GIOR reported
was $5,872,113. On May 15, 2023, the Company filed a revised GIOR of $108,652.91,
claiming calculation errors. See Attachment A and Attachment C.
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 the Staff.
AFFIDA YIT OF JOHAN E. KALALA-KASANDA 3
19.Staff was particularly concerned with different classifications that the Company reported
in the accounts 5250 Corporate Operations Revenue of $5,254, 1513 and 5280 Nonregulated
Operating Revenue of the amount of $5,308,156.4 In the annual report filed with the
Commission on April 14, 2023, this was allocated to sub-account 5250. However, in the
attachment to the objection 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$5,910,757.70 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 oflntrastate 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.
·IA. Dated this _L day of June 2023.3 As shown on Attachment B
Johan E. Kalala-Kasanda Utilities Analyst 2 Idaho Public Utilities Commission
4 As shown in Attachment C and Attachment A-total of lines 48 to I 02
AFFIDAVIT OF JOHAN E. KALALA-KASANDA 4
SUBSCRIBED AND SWORN to before me this (_o1\i day of June 2023.
*****
Notary Publicor 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. CTL-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\CTL-T-23-01\CTL T230 I_Johan_Affidavit docx
Richard Wiggins [e-mail]
Bachchi Samahon-Oumar [e-mail]
� ff-, frn WltvvKeri J. Hawke Legal Administrative Assistant
AFFIDAVIT OF JOHAN E. KALALA-KASANDA 5
Attachment A
Affidavit of Johan E. Kalala-Kasanda
Case No. CTL-T-23-01
A!!ochmenl A -CTC-Comparisons
CTCTELECOM
PUC COMMISSION AUDIT GROSS ANNUAL INTRASTATE REVENUE AS OF 12/31/2022
Code I· AcrountNo. 5001.00 500100 5001.50 5001 50 506000 506000 506010 5060M 506910 506920 5081 5081 10 5081 10 5082 10 5082 23 5084 10 508-U0 508451 508455 508-160 508490 51<XI 5100.50 510050 510051 5100.51 510052 510052 510057 5100.99 523000 523000 52-1000 5250 526000 5260 10 5260 10 528001 528001 528001 528002 5280.02 528002 5280.03 528001 52800.l 52800-1 528004 52800-1 528005 528005 528005 528006 528006 528006 5280 07 528007 5280.07 528008 528008 528008 528009 528009
ompan�· n a nmpany nmpany ep11t e ompany epor e Repor1etl on Reported• Audi! on GIOR Form/ as Revhfi.11 • STAFF Annual Re 1rt Re Ue'il Aho on Audit Ob.ei;liun C:ikublionJ
-l/l-l/!1123 S/25/2023 25/51111:?J 5115121123 6/lllllll A-1 A-2 A-3 A-I A-5
Code 2.
Account Nu. Idaho -I 5001 $ 172-490} 5001 5001 5001 5060 -U52 SOC>O 5060 5060 5069 5069 5081 37.209) 5081 5081 5082 (4.145) 5082 5084 5084 1298 508..! 5084 5084 508-1 ::;ioo 5!00 5100 5!00 5100 5!00 5100 5100 5!00 5230 52:JO 5240 5250 5260 5260 5260 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280
(193.813)
2.m-1)
!2-15.767) 5 25-1151
Atloctvnenl A
$ ' s s $ $ ' ' ' s '
hbho- 2 167.791 79) S -I J.l2 00 $ 14-U).�\ $ <3.890 79) S (-l.lXJ2 62 $ $ (J9l:H18 S
37J60 10)
1.9257()) 2.219�)
C?5K9-I)
3908)
%45984) 6770972) 22J5-I J-I 6.071.50 (883 83) {225 97) noo6oi
2.021 Ml
245.766.6-1)
tS.071 961 11539378 7 43122) 1.88761 (750()) .l.130001 15.89069) 5 75
:qoo1
4.690.70)
( 1.62-1 70 22691) ! 17.10203)
(-11.07896) S 1-195) S $ -IOI 83) S 3 120 :50 S 11.526 59) $
JJaho-3 (67.7'11 79) S 4_,,200 $ 14-104) S 0.89079) S 4.()0262 S s 1398.88) S
(37J60 10) S ' 1,925 70) S 2.11904) S ' 258.9-1) S
3908) S ' s 22.35-13-1 S 6071 50 S s s 10060) S
t2.021 68) S s (!-15.7666-1) S
(8.071 96) II 15J9J 78) 7 43122) 1.88761) (7500) J.IJ0.00 5.890.69 5.75) 3-1.00
-1.690 70
1.62-170 226.91 l 17.20203)
-ll.071t96) 14.95
t401 8�)
:u20 50) tl.526 59)
lllahn--1 (6-1.655 29) 4JHOO 14-104) J.J5902) J.950 08
(2589-1)
22 354 34) (6.071 501
2.034 17)
IDAHO (64655.29) 4 Jn.OO 144.1}4 3.359.02 13.950.08)
401 54)
n.20923)
258.94)
J9.08
2235-134 6 071.50
10060
(2.034.37)
245 766.64)
(8.071.96) 115 393.78) 7 431.22) 1.887.61 75.00 3 130.00 5.890.69) 5.75 34.00)
4690.70)
1 624.70 (226.91 17.10203)
(41.078.96) 14.95
401.!IJ) 3 120.:50) 1.526.59)
6/5/2023
Attochment A -ere-eomporirnns CTC TELECOM PUC COMMISSION AUDIT GROSS ANNUAL INTRASTATE REVENUE AS OF 12131/2022 Code2-An:ountNn. 5280 5280 52W 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 5280 rnw 5280 5280 5280 5280 5280 5280 5301 5"11
nmp:.iny Reprnted on Annu:atRe 1rt
-l/l.&/21123 A-1
ltbho-1 s 5 81.& 259
Allochmenl A
n :1 nmp:any Rcportetl •Audit Ri:<Ul')'I
omp:any cpor l0
on GIOR Form/ AbnnnAudil
$ s $ $ s ' s $ ' s ' ' ' ' ' s s s ' s ' s ' s s ' ' ' s $ s
s
5/25/2023 A-2
hhiho-2
11.144 00 cSOJJJS.16 47.48971) 211 91 352.343 45) cl0.602 541 cl.f641597)
2.13000 IJ78J 19) 12.400 00) 7J.174 39) (1.1 IO(X)) (1.205 00 L\5J9824) 9000 00 t?l.962 22 1.263591.84) 210 26
(251.054 55) 216.50802) S 29.41980 $ ' 2.535.677.33) S 6000) S t\.{)48 92) S
1.091 79) S
6�H446.6J S
25/511023 A-3
lthho-3
1.14-100 IS0JJJS.16 47.489 71) 211.91 35234345) <l0.602 5-IJ 146.41597 )
2_1JOOO) JJ.781.19) 12..tOU 00) 7J.17•U9) (l.110(Kl) Cl.205 00) .,5.39824) 9 .(XIO 00) 73.%2221 1,263.591 jl.fJ 2IO 26
1216.508.02 29.419.80
2.535 (,77 ]J) 6000) 11.04892)
I 091 79)
5K72112.72
o mp:any cpo c :n Rc,·ised I• Oh'ection
5115/2023 A4
ltl:aho--1 ' ' ' 5 ' ' s ' s s 5 s s s s s s s s s s s s ' ' s s s ' $ s 1.091 79)
s 1118 652.91
s s s s s s s s s s s s s ' ' s s s s s s s ' s s s ' ' s s s
s
STAFF C:i\culatioH
6/1/2023 A-5
IDAHO
)
I
1
(217.537.40} 27 R77.89)
2.499 817.05) 60.00) tl.04892)
1.091.79)
5 910 757.711
6/5/'XJ23
Attachment B
Affidavit of Johan E. Kalala-Kasanda
Case No. CTL-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 OPERATING REVENUES
Please identify the following revenues:
Total Company
72,490
4,352
0
37,209
4,145
298
193,813
2,034
245,767
5,669,375
0
6,229,482
USAC USF 0. To what account were they booked? Account# 5069.10
State USF $ NONE
Rev 3/02
To what account were they booked?
Page 15
Idaho Only
72,490
4,352
0
37,209
4,145
298
193,813
2,034
245,767
5,254,151
0
5,814,258
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. CTL-T-23-01
From: Bachchi Samahon-Oumar <[e-mail]>
Sent: Monday, May 15, 2023 2:01 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 -CTC Telecom
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 2023 Operator's Statement for CTC Telecom. 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 $215.35 versus $11,638.53. We will send the assessment check once I hear from you.
CTCTELECOM
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]
S0i4 State Access Revenues [lntra-St•te]
5100 Lon� Distance Message Revenues
5230 Director Revenues
5240 Rent Revenues
5250 Corporate Operations Reveneus
5264 Other Incidental Regulated Revenues
52i0 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] I www.ctcweb.net�c:Lc� m:::-...lfu O
QRIGl�AL REVISED
Idaho Only: Idaho Only:
$ 76,159 $ 72,490
$ 4.402 $ 4,352
$ $
$ 37,360 $
$ 4,145 $ $ 298 $ 259
$ 193,806 $ 28,426
$ 2,022 $ 2,034
$ 245,767 $ $ 5,308,156 $
$ $
$ $ $ $ 1,092 $ 5,872,113 $ 108,653
0.1982% 0.1982%
$ 11.638.53 $ 215.35
Change => $ 11,423. l 8