20161013AVU to Staff 4 Attachment D.pdf

Internal Audit Department
Audit Report
DATE: August 4, 2016
TO: Dan Johnson, Chris Drake, Tom Lienhard
CC: Kevin Christie, Dennis Vermillion, Scott Morris, Tracy Van Orden, Mike Dillon
FROM: Janice Gibler and Amy Parsons
SUBJECT: Demand Side Management (DSM) Review

Purpose:
The objective of this review was to ensure that the DSM department has appropriate policies and
procedures in place in order to accurately process qualified customer rebates. Internal Audit has limited
its testing to rebates issued in 2015 for both residential and non-residential customers.
Procedures:
Internal Audit performed the following procedures:
• Interviewed DSM management in order to determine areas of risk/concern within the
department, validate that the new organizational structure is operating as intended and verify
that communication within the department has improved since our last review.
• Obtained an understanding of the various reviews performed by third parties (Nexant,
WA/ID/OR commissions, etc.) and inquired of any material exceptions/findings observed in
recent reviews.
• Reviewed the DSM Standard Operating Procedures (SOPs) to obtain an understanding of rebate
qualifications and procedures in place for processing rebates.
• Selected 15 residential and 15 non-residential rebates processed in 2015 and performed the
following procedures:
• Verified the rebate qualifications were met and the amount calculated appeared
accurate.
• Confirmed all required paperwork, signatures, approvals, etc. were obtained prior to
payment to the customer.

Results:
• The DSM department appears to be working as a cohesive group and the current organizational
structure appears to be operating as intended.
• Per inquiry of management and review of the Nexant report for 2014-2015, no material
exceptions or findings noted from third party reviews.
• Current SOPs appear to be robust and sufficiently outline qualifications for each rebate and
internal policies and procedures.
• Residential and non-residential rebates selected for testing appear to meet specified
qualifications and be accurately calculated. Further, with the exception of the observation
noted below, it appears that internal processing requirements were followed.

Staff_PR_04 Attachment A Page 1 of 2

Observation: One residential rebate selected for testing was not signed by the customer and
instead stated “Refer to File” on the signature line. Upon discussion with DSM staff, it was not
known if a customer signature was a legal requirement or an internal policy. Further, it was
noted that signatures are not obtained for rebates submitted electronically.
Recommendation: Internal Audit recommends that the DSM department work with the Legal
department and determine what the appropriate operating policy should be in regards to
obtaining signatures from customers on submitted DSM rebate forms (both hard copy and
electronic) and update current SOPs.

Conclusion:
Other than the observation noted above, it appears that the DSM department has appropriate policies
and procedures in place to accurately process qualified customer rebates.

Staff_PR_04 Attachment A Page 2 of 2