SOS Conducts Audit of Energy Trust of Oregon

Secretary of State Dennis Richardson Releases Audit of Energy Trust of Oregon

SALEM, OR — Today, the Secretary of State released an audit of the Energy Trust of Oregon’s administrative expenses, which are generally reasonable. Auditors also identified ways the Oregon Public Utility Commission (PUC) could strengthen its oversight of these expenses to increase transparency and accountability.

Energy Trust is a nonprofit organization that works to provide energy efficiency and renewable energy solutions for state-regulated electric and gas utilities. While it does not directly receive tax dollars, Energy Trust does receive funding from fees paid by utility ratepayers and operates under the supervision of PUC.

Energy Trust was previously criticized for what was perceived as excessive, expensive office space and unusually high salaries for its management. Auditors found the organization has taken appropriate steps to mitigate the cost of its office space, and that PUC oversees Energy Trust in an appropriate manner to keep administrative and program support costs reasonable.

As a nonprofit organization, Energy Trust is not subject to state administrative cost requirements. However, auditors found that PUC could strengthen administrative cost oversight by more clearly defining what constitutes reasonable administrative costs, revising key performance metrics, and clarifying financial reporting.

The findings are outlined in the report entitled: “Energy Trust Administrative Costs are Generally Reasonable, but the Public Utility Commission Can Improve Oversight.”

“This audit demonstrates that the Public Utility Commission has made progress in controlling Energy Trust administrative costs,” said Secretary of State Dennis Richardson. “However, further improvements in transparency and accountability are needed to ensure that Oregon ratepayers receive the most cost-effective savings possible.”

The audit found that Energy Trust’s administrative costs and the controls over them are reasonable, but did find a small percentage of questionable administrative costs. For example, $26,500 was spent on a holiday party and employee recognition expenses for an executive director’s retirement. Auditors found:

• Energy Trust complies with PUC’s administrative cost control requirements.
• A small percentage of administrative costs do not align with state agency standards or the grant guidelines that govern Energy Trust operations.
• Increased clarity and detail in financial reporting would improve transparency and stakeholder oversight.

Auditors tested a statistically valid sample of administrative costs after reviewing Energy Trust and PUC policies and procedures. Auditors also conducted interviews with PUC and Energy Trust staff, as well as public and private stakeholders, including the utilities that contribute to Energy Trust funding. To gain further perspective, auditors spoke with administrators from 11 state energy efficiency programs regarding their administrative cost reporting procedures.

The audit provides three recommendations for PUC that focus on improving administrative cost oversight and reporting to increase transparency of ratepayer dollar spending.

Read the full audit on the Secretary of State website.

Press release provided from the Office of Oregon Secretary of State, Dennis Richardson.