Agency that regulates TN utilities resists audit committee for itself

By Chris Butler | Tennessee Watchdog

NASHVILLE — The Tennessee agency most directly responsible for regulating the state’s privately owned utilities has resisted calls to regulate itself and audit its own finances, according to a report state Comptroller Justin Wilson released this month.

Tennessee Regulatory Authority Executive Director Earl R. Taylor told comptrollers this past summer that taxpayers need not worry about any waste, fraud or abuse of their money going on within the agency.

“The director’s basis for an exemption involved a self-assessment of authority fraud risk as low,” comptrollers wrote while describing Taylor’s request for an exemption from a state law requiring that all governing boards have audit committees.

State officials implemented the law in 2005, meaning TRA officials have had nine years to comply.

DAWN OF A NEW DAY?: Will the Tennessee Regulatory Authority, which regulates privately-owned utilities throughout the state, finally start regulating itself?

Comptrollers, however, denied Taylor’s request, which forced TRA officials to adopt an audit committee charter last month. Comptrollers must now approve the charter, said TRA spokesman Greg Mitchell.

The TRA’s budget for this year is $6.8 million, and the authority has 54 employees, Mitchell said.

“The agency has only one location, does not receive cash payments, does not maintain a checking account, and all accounting is processed through Edison, which has its own inherent internal controls,” Mitchell said when asked why Taylor believed the risk for fraud is so low.

Edison is the computer software program that state officials use to manage finances.

Earl R. Taylor

“The TRA is accountable by virtue of its regular financial audits, as well as regular performance audits, both of which are conducted by the state comptroller. Like all state agencies, the TRA may be audited by the comptroller at any time,” Mitchell said.

The TRA, created in 1995, sets rates and service standards for telephone, natural gas, electric and water utilities and also handles consumer complaints.

The authority also manages the state’s Do Not Call program and gas pipeline safety, among other things, according to the TRA’s website.

Gov. Bill Haslam, House Speaker Beth Harwell and Lt. Gov. Ron Ramsey — all Republicans — appointed Taylor, who, according to a 2012 law affecting the agency, makes $152,400 per year.

Five part-time directors who serve six-year staggered terms, meanwhile, make $36,000 annually and even have access to their own state vehicle, according to the 2012 law.

The law doesn’t state how much the vehicles cost taxpayers, but said one additional state vehicle would cost approximately $9,800.

“The five TRA directors will vote during a future conference, likely this fall, to determine who will serve on the audit committee,” Mitchell told Tennessee Watchdog.

Other than Taylor, Mitchell said he was unaware of the other TRA directors advocating for an audit committee.

Contact Christopher Butler at chris@tennesseewatchdog.org

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Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

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