OCA Audit Reports

Issued: June 2007

SUMMARY

This report presents the results of our audit of Austin Energy Deferred Payment Agreements (DPAs). The purpose of this audit was to determine if DPA policies are in line with best practices, ascertain customer care staff adherence to DPA policies, and evaluate management’s monitoring efforts. A DPA is an agreement between the utility customer and Austin Energy in which the customer agrees to make regular, consistent payments to pay off a delinquent balance over an agreed-to length of time. In addition, the customer agrees to make a defined down payment on their DPA.

Our comparison of Austin Energy’s DPA program with other municipally owned utilities shows that Austin Energy has a comprehensive program that includes a written policy, analysis of cases on an individual basis, and program monitoring.

As a result of a new policy instituted by Austin Energy in FY06, we found that the number of DPAs established has decreased by more than half, thereby significantly reducing the dollar amounts placed in DPAs. We also found that the number of customers defaulting on three or more DPAs has declined over the three year scope from 23 percent in CY 04 to 6 percent in CY 06. This would represent customers who truly default the DPA and either pay the full amount or have their services disconnected and are moved into the collections process. Another area showing significant improvement is the error rate when setting up a DPA. A past audit revealed an average DPA error rate of 67 percent between March and October 2001. The average has dropped to 17 percent in FY 06.

While we found some significant positive changes to the program, additional improvements can further strengthen the program. We recommended that Austin Energy institute several systemic changes to the DPA program. These include establishing a separate policy for commercial and residential customers, updating the DPA policy to reflect current practices, sending written notices to DPA customers, and communicating needed system enhancements to the team responsible for developing specifications for the upcoming upgrade to the utility’s billing system. We also recommended improving compliance with some parts of the DPA policy, including identifying and making all attempts to include past delinquent inactive accounts when a DPA is established and consistently applying requirements related to customers who have meter tampering charges. Finally, stronger monitoring will help management further ensure the continued success of the DPA program.

Download the entire text of our Austin Energy Deferred Payment Agreements (Size: 234 KB) in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files. Or request a hard copy of this audit report, No. AU06121, by submitting this audit report request form.

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