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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 Attachment I:\transfer\avuaudreqO2 I 0