OCA Audit Reports

Issued: April 2007

SUMMARY

The City of Austin has two gas franchise fee agreements with two companies that operate a gas distribution system within the City. According to the agreements, the gas companies are required to pay to the City a total aggregate sum of five percent (5%) of the companies total gross revenues. This franchise fee is for use of City infrastructure including streets, alleys, and easements.

The gas franchise agreement with Texas Gas Service was recently reviewed by an outside consultant, and we performed the work necessary to be able to rely upon the results of the consultant’s work. As a result, we were able to focus most of our audit resources on a second gas franchise with Atmos Energy. We found that while Atmos Energy collected franchise fee revenue in accordance with the franchise fee agreement and reported this revenue to the City, 481 properties within Austin were not coded as Austin customers by the gas company. As a result, we estimate that approximately $50,000 in gas franchise fee is due the City.

We have issued five recommendations meant to strengthen the franchise agreement and address the need for the City to collaborate with the gas company to correct discrepancies found during the audit.

Download the entire text of our Gas Franchise Fee audit report (Size: 370 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. AU07104, by submitting this audit report request form.

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