HomeMy WebLinkAbout20040210Audit Request.pdfIDAHO
PUBLIC UTiliTIES
com mission
Dirk Kempthome, Govemor
O. Box 83720, Boise, Idaho 83720-0074
Paul Kjellander, President
Marsha H. Smith, Commissioner
February 10, 2004 Dennis S. Hansen, Commissioner
Don Falkner
Avista Corp.
O. Box 3727
Spokane, VV A 99220-3727
Dear Mr. Falkner:
RE:Audit Request of Staff, Case Nos. A VU-04-, A VU-04-
In conjunction with the Idaho Public Utilities Commission (IPUC) Staff audit of the 2002
financial records for Avista Corp.'s (Avista; the Company) Gas and Electric Operations and Case
Nos. A VU-04-01 and A VU-04-, please provide the following in Boise as it becomes available
but no later than Tuesday, March 2, 2004. If information is not available by this date, please
identify the date it will be provided to Staff. VVherever Staff has requested information about both
Gas and Electric Operations, please separate your responses by each individual operation.
In your responses, please identify when system wide amounts are provided and the related
allocation of those amounts to Idaho Gas and Electric Operations. Please provide complete answers
to each question; supporting workpapers that provide detail or are the source of information used in
calculations; the name and telephone number of the person preparing the documents; and the name
location and telephone number of the record holder. This request is to be considered as continuing,
and A vista is requested to provide, by way of supplementary responses, additional documents that it
or any person acting on its behalf may later obtain that will augment the documents produced.
Audit Request No. 117: Please calculate and provide average base salary for all A vista
Utilities employees. The calculation is as follows: Total Base Salaries for 2003 for all A vista
Utilities Employees divided by Total Employees. No benefits, taxes or incentive pay should be
included in this calculation.
Audit Request No. 118: Please update Company response to audit request number 4 by
providing a copy of the annual report and proxy statement to shareholders for 2003 when it becomes
available.
Audit Request No. 119: Please update Company response to audit request number 6 by
providing a copy of the detailed general ledger for the year ended December 31 , 2003. Please also
provide an electronic version of this and the 2001 and 2002 general ledgers on diskettes (3.5 in.) or
via e-mail in Excel 2000 compatible language ifpossible.
Located at 472 West Washington Street, Boise, Idaho 83702
Telephone: (208) 334-0300 Facsimile: (208) 334-3762
Mr. Don Falkner
February 10, 2004
Page 2
Audit Request No. 120: The commission basis reports for the year ended December 31
2003 , ifnot already sent to the IPUc.
Audit Request No. 121: Based upon previous Company responses, it is Staffs
understanding that A vista does not have any desk procedures, accounting and cost allocation manuals
to train new or existing employees in their duties and inform them of Company policies and
procedures. Staff has an eleven-page document (attached are hand-numbered pages 6-10 and 26-31)
some of which is dated June 1996 describing utility codes, 1996 overhead percentages and 1997
budget overhead percentages. Please verify that information previously provided is still current and
also provide materials describing the following:a. The process by which salary and benefits are recorded and allocated including the
basis of those allocations such as timecards or other allocation documents. Please include
within this response the original account numbers that are charged and the journal entries
splitting those charges to individual capital and expense accounts.
b. The process by which capital charges are recorded. Please include within this
response the method by which construction projects are billed and ultimately recorded as
plant in service.c. The current dollar threshold for expensing items. Staff currently has materials that
indicate items costing less than $500 are expensed.
d. The process by which revenues are billed. Please include within this response how
changes in rates are implemented.
Audit Request No. 122: Please update Company response to audit request number 11 by
providing an analysis of the actual cost of capital at December 31 , 2003 that includes embedded and
weighted cost of debt and equities. Please also provide an electronic version with formulas intact of
this and the 2002 cost of capital response (prepared April 25, 2003) on diskettes (3.5 in.) or via e-
mail in Excel 2000 compatible language if possible. Please provide schedules showing at least the
following:a. All long-term and short-term debt amounts outstanding as of December 31 2003 with
details on the instrument type, face amount, stated interest rates, premiums, discounts
unamortized issuance expense, and effective cost rate for 2003.
b. All preferred securities outstanding as of December 31 2003 with details on dollars
outstanding and embedded cost calculation.c. Common equity as of December 31 , 2003 with details on dollars outstanding and
embedded cost calculation.
Mr. Don Falkner
February 10 2004
Page 3
Audit Request No. 123: Please update Company response to audit request number 23 by
updating the list prepared April 23 , 2003 that identified reports and/or letters prepared by Internal
Audit staff in 2000 through 2003 documenting areas reviewed by them.
date.
Please list reports and/or letters prepared after April 23, 2003 and through 2004 to
Please provide the list now but have these reports available for on-site review.
Audit Request No. 124: Please update Company response to audit request number 22 by
updating the original response to include any audited financial statements, audit reports and letters
between Avista s auditors and the audit committee and management in 2003 and 2004 not previously
provided.
Audit Request No. 125: Please provide a schedule of Plant in Service for the year ended
December 31 , 2003 that is similar to FERC Forms and State Supplements that shows additions
retirements (including associated reductions to accumulated depreciation), transfers and adjustments.
Please show the additions and reductions (retirements, transfers, etc.) at the subaccount level
separated by production, transmission and distribution. Please show the amounts for Total Company
and the Idaho jurisdiction separated by Gas and Electric Operations.
Audit Request No. 126: Please reconcile the schedule provided in response to audit request
no. 125 with the Commission basis plant information provided in the Commission basis reports for
the year ended December 31 2003.
Audit Request No. 127: Please update Company response to audit request number 39 by
providing the calculation of depreciation expense for 2003 separated by A vista Gas and Electric
Operations for the Idaho jurisdiction. Please identify depreciation rates used for each calculation and
provide copies of the related journal entries.
Audit Request No. 128: Please provide a schedule of "Property Held for Future Use
(including allocations of system wide amounts) for Avista Electric Operations and Avista Gas
Operations in 2003.
Audit Request No. 129: Please provide a detailed schedule of "Construction VVork in
Progress" for 2002 and 2003.
Audit Request No. 130: Please update Company response to audit request number 43 by
providing a detailed schedule of all "Contributions in Aid of Construction" received by A vista Gas
and Electric Operations in 2003 including names, dates, dollar amounts and account numbers where
posted with specific dollar amounts to each account.
Audit Request No. 131: Please update Company response to audit request number 44 by
providing a detailed schedule of "Customer Advances for Construction" for 2003 for both A vista Gas
Mr. Don Falkner
February 10, 2004
Page 4
and Electric Operations separated by Company. Please show names, dates, dollar amounts and
account numbers where posted with specific dollar amounts to each account.
Audit Request No. 132: Please update Company response to audit request number 45 by
providing a schedule of plant under construction as of December 31 , 2003 for A vista Gas and
Electric Operations. Include on this schedule the work orders numbers, plant that went into service
during the year and the balance at year-end.
Audit Request No. 133: Please update the Company s responses to audit request numbers
46 and 47 by providing a detailed schedule of any land sales (including allocations of system wide
amounts) for A vista Electric and Gas Operations in 2003. Please include the date of sale, description
of the sale, and the account numbers and dollar amounts posted to each.
Audit Request No. 134: Please update Company response to audit request number 48 by
providing the most current copies of the budgets for Avista Gas and Electric Operations including the
impact (in dollars) to the Idaho jurisdiction for 2004. Include also at least a list describing the scope
term, and approximate costs of all 2004 planned additions and construction to facilities (including
allocations of system wide amounts).
Audit Request No. 135: Please update the Company s responses to audit request numbers
49 and 50 by providing a schedule of "Prepaid Items" showing dollar amounts and account numbers
where posted, vendors, and related explanations (including allocations of system wide amounts) for
A vista Electric and Gas Operations in 2003.
Audit Request No. 136: Please update Company response to audit request number 55 by
providing a schedule of amounts paid for injuries and damages (including allocations of system wide
amounts) for Avista Gas and Electric Operations in 2003. Please include accounts posted and related
explanations for damages paid.
Audit Request No. 137: Please provide a copy of the capitalized leases associated with or
allocated to Avista Gas and Electric Operations for the year 2003.
Audit Request No. 138: Please update Company response to audit request number 71 by
providing copies of any accounting adjustments proposed for 2003 during the external audit process
that were recorded or otherwise allocated to A vista Gas and Electric Operations.
Audit Request No. 139: Please provide an accounting report similar to that provided in
response to audit request number 64 that lists the detail of all items in the 930 accounts for the
months of January through March, May through June, August through October 2002. Staff has
received the reports for April, July, November and December 2002.
Audit Request No. 140: Please make available in Boise, access to external audit workpapers
for the year ended December 31 , 2003. Please identify the location of the workpapers and the
contact name and phone number of the external auditor we will be working with while reviewing
Mr. Don Falkner
February 10 2004
Page 5
these workpapers. Please make arrangements with your auditors permitting our access to these
workpapers.
Audit Request No. 141: Please update Company response to audit request number 105 by
providing:a. the "Corporate Air Travel Recap Report" for the time periods in 2002 not already
provided to the IPUC Staff auditors. Staff has received the reports for January 28 through
February 22, 2002, May 28 through June 25, 2002, August 28 through September 24, 2002
and November 23 through December 20, 2002.
the aircraft trip logs for the year 2002.
Audit Request No. 142: Please provide a copy of any requests for authorization to use the
Company aircraft including (but not limited to) any cost analysis, justification, discussion of trip
purpose, and approval of trips that included Idaho destinations in 2002.
Audit Request No. 143: To the extent not already provided, please provide a schedule
listing the actual costs incurred for each trip identified in response to audit request number 142.
Audit Request No. 144: On page 13 of the 2002 Summary Annual Report, reference is
made to opening Avista s high-speed fiber system to the region s education community. Please
describe the Company s use of the fiber system, the specifics of the collaboration and the costs
associated with both that are allocated to Idaho Gas and Electric Operations. Please include within
response the account codes with the specific dollar amounts that are charged.
Audit Request No. 145: A new outage management tool is identified on page 21 of the
2002 Summary Annual Report. Please identify the areas served by this tool, the costs to create and
operate this tool, and the benefits provided by it. Please include within response the amounts, years
and account codes that are charged including the amounts allocated to Idaho Gas and Electric
Operations.
Audit Request No. 146: How many gas customers does Avista have in the Idaho
jurisdiction? Please provide by customer class and rate schedule.
Audit Request No. 147: How many electric customers does Avista have in the Idaho
jurisdiction? Please provide by customer class and rate schedule.
Audit Request No. 148: How many customers in the Idaho jurisdiction are both gas and
electric customers?
Audit Request No. 149: VVhat are the specifics of the contracts listed in the spreadsheet
sent in response to audit request number 114? Specifically, please provide a schedule showing
Mr. Don Falkner
February 10, 2004
Page 6
the following: Sale or Purchase, Firm or Non-Firm, On-Peak, Off-Peak or Flat, delivery dates
and the commodity price.
Audit Request No. 150: Please provide Staff with a copy of the 2003 Federal Income
Tax return, as well as the Idaho tax return for 2003.
Audit Request No. 151: Please provide Staff with any amended state and federal income
tax returns filed since January 1 , 2003 to date.
Audit Request No. 152: In addition to the 2002 general allocation factors previously
requested in audit request number 109, please provide the allocation factors for 2003 for both gas
and electric operations.
Review of the above requested documents may require additional written or verbal inquiries.
Please indicate a point of contact for such inquiries. Confidential information may be submitted on
yellow paper to maintain confidentiality. If you have questions, please contact me
pharms~puc.state.id.) at (208) 334-0361. Thank you for your cooperation and assistance.
Sincerely,
() o..:tcL~ UIu ~'-0'0~
Patricia Harms
IPUC Auditor
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