OCA Audit Reports

Issued: January 2009

This report presents the results of Austin Energy’s Customer Information System (CIS) Remittances. This audit focused on remittances, which includes all utility payments processed by Austin Energy (AE). In FY 08, AE processed approximately $1.6 billion in utility payments.

The purpose of this audit was (1) to determine whether Utility payments received by AE have been properly recorded in the Customer Information System (CIS) and deposited in the bank, and (2) to determine whether AE has improved internal controls at the East Branch payment processing center related to security and cash handling following an AE internal audit and a security evaluation by Austin Police Department (APD).

In this audit we found that AE has many system and procedural controls related to remittance processing in place to ensure utility payments are received and properly reflected in the customer billing system. Our tests of a statistically valid sample of payment transactions confirmed that AE received, recorded the payments in the customer billing system, and deposited the payments appropriately for all tested transactions. While controls related to remittance processing appear strong, as part of our testing we also found that AE’s processes for assessing late payment penalties are not fully aligned with Utility Regulations and as a result AE charged some customers late payment penalties but not others who were similarly situated. Additionally, AE does not have clear guidance for applying a fee when payments do not clear due to insufficient funds.

While AE has established accounts to hold payments that cannot be associated with a valid customer account and monitors these accounts for unauthorized access, AE needs to identify strategies to reduce the balance of these accounts in order to minimize the risk of misuse of these funds.

Additionally, AE does not require sufficient verification of account numbers by third party aggregators, which can result in errors when applying electronic payments to accounts. Further, one of the third party aggregators is not complying with records retention requirements and another is not complying with the required secure format for transmission of electronic payment information. Moreover, AE is manually retrieving payments from nine pay stations throughout the City that could be automated or eliminated.

Finally, our testing at the East Branch payment processing center, which collects approximately $800k per month in cash payments, revealed that AE has significantly strengthened security and cash handling since 2005. However, we did identify a few additional improvements to enhance safeguarding of cash at the facility.

We have issued ten recommendations to address issues related to AE’s CIS remittances and AE agreed to implement all of them.

Download the entire text of our AE CIS Remittances in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files. Or request a hard copy of this audit report, No. AU08107, by submitting this audit report request form.

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