California Misses $32 Million in Fines Due to Shoddy Collections

The collection efforts of the California Public Utilities Commission (CPUC) are so disorganized the regulator has failed to collect more than $32.2 million in fines, penalties and restitution since 1999, according to an audit released this week by State Controller John Chiang.

The CPUC is the state regulator of utilities, telecommunication firms, and transportation companies.

The Controller found that the CPUC imposed $300 million in fines and penalties against utilities and telecom firms since 1999, and collected 84 percent of the fines and 75 percent of the penalties. The regulator gathered only 15 percent of the fines and 12 percent of the penalties of the $515,421 levied against transportation companies.

The regulator doesn’t have a central collection unit; its efforts are “fragmented among various divisions” with no formal guidelines, processes, and procedures, the Controller reported. This confusion meant that in many cases CPUC “made no attempt to collect even after obtaining a court judgment at considerable effort and expense.” Collection efforts were handled by the legal office, the consumer protection and safety division, the water division, and a branch of the energy division.

The CPUC sometimes “takes years to render a decision imposing fines and restitution,” the Controller reported. Sometimes, fines imposed against telecom firms were later deemed uncollectible because the companies “either ceased to operate or filed for bankruptcy.”

Coordination of efforts with the accounting division was also a mess "with no procedures in place to ensure the accounting office is notified of fines."

The CPUC said it has already initiated responses to the Controller’s findings including “standard operating procedures” for the collection of fines and penalties.