MODESTO IRRIGATION DISTRICTLocal Government

Criteria: In accordance with the CAPP Program Notice No. 2021-01, MID was to provide financial assistance to active and inactive residential and commercial customer accounts reflecting delinquent balances incurred during the COVID-19 pandemic relief period covering March 4, 2020 through June 15, 2021. Such assistance was to be provided to customers based the following priority: (1) Active residential customers with past due balances and are at risk of disconnection due to nonpayment of balances incurred during the COVID-19 pandemic bill relief period; (2) Active residential customers with past due balances incurred during the COVID-19 pandemic bill relief period; (3) Inactive residential customers with past due balances incurred during COVID-19 pandemic bill relief period then (4) Commercial customers with past due balances incurred during the COVID-19 pandemic bill relief period. MID made determinations based on actual arrearages and status at the time the relief funds were applied to customer accounts in the billing system. Condition/Context: During our testing, we selected a sample of 40 customer accounts whose electric utility bills were credited with CAPP funds and viewed supporting documentation. Of those 40 customer accounts, we noted one customer whose account was closed on January 12, 2021, and then reopened on February 23, 2021.The CAPP credit was applied to the customer's bill for the arrearage accumulating after the new account was opened, however, the arrearage accumulating prior to the account closing was not appropriately credited. Furthermore, we obtained a listing of all customers that closed and reopened new accounts during the COVID pandemic bill relief period that received CAPP credits and selected a sample of 25 customer accounts. We viewed supporting documentation and, of the 25 customer accounts, we noted that 15 customers were not credited for the arrearage prior to the account being closed. The sample was not statistically valid. Cause: MID did not have sufficient controls in place for review of each individual account credited by someone other than the individual who applied the credits to the accounts. Effect: Due to the lack of sufficient controls for reviewing customer accounts on an individual basis, the customers could be credited with an inaccurate amount. Questioned Cost: None Recommendation: We recommend that MID develop and implement controls to review the accuracy of the CAPP credits on an individual basis to identify any inconsistencies with the program. Management's Response: MID does not have the resources to individually review CAPP credits applied in mass using scripted logic applied to MID's computerized billing system for each account when many thousands of accounts are involved. Instead, MID does a sampling to ensure credits are applied appropriately. MID will implement review of any manually applied CAPP credits going forward to ensure credits are appropriately applied.