Sec. 16-8. Examination of witnesses and documents. Hearing examiners. Management audits.
Sec. 16-8. Examination of witnesses and documents. Hearing examiners.
Management audits. (a) The Department of Public Utility Control may, in its discretion,
delegate its powers, in specific cases, to one or more of its commissioners or to a hearing
examiner to ascertain the facts and report thereon to the department. The department,
or any commissioner thereof, in the performance of its duties or in connection with
any hearing, or at the request of any person, corporation, company, town, borough or
association, may summon and examine, under oath, such witnesses, and may direct the
production of, and examine or cause to be produced and examined, such books, records,
vouchers, memoranda, documents, letters, contracts or other papers in relation to the
affairs of any public service company as it may find advisable, and shall have the same
powers in reference thereto as are vested in magistrates taking depositions. If any witness
objects to testifying or to producing any book or paper on the ground that such testimony,
book or paper may tend to incriminate him, and the department directs such witness to
testify or to produce such book or paper, and he complies, or if he is compelled so to
do by order of court, he shall not be prosecuted for any matter concerning which he has
so testified. The fees of witnesses summoned by the department to appear before it under
the provisions of this section, and the fees for summoning witnesses shall be the same
as in the Superior Court. All such fees, together with any other expenses authorized by
statute, the method of payment of which is not otherwise provided, shall, when taxed
by the department, be paid by the state, through the business office of the department,
in the same manner as court expenses. The department may designate in specific cases
a hearing examiner who may be a member of its technical staff or a member of the
Connecticut Bar engaged for that purpose under a contract approved by the Secretary
of the Office of Policy and Management to hold a hearing and make report thereon to
the department. A hearing examiner so designated shall have the same powers as the
department, or any commissioner thereof, to conduct a hearing, except that only a commissioner of the department shall have the power to grant immunity from prosecution
to any witness who objects to testifying or to producing any book or paper on the ground
that such testimony, book or paper may tend to incriminate him.
(b) (1) In the performance of its duties the Department of Public Utility Control
may establish management audit teams as a regular and continuing component of its
staff. The management audit teams shall be composed of personnel with a professional
background in accounting, engineering or any other training as the department may
deem necessary to assure a competent and thorough review and audit. The department
shall promptly establish such procedures as it deems necessary or desirable to provide
for management audits to be performed on a regular or irregular schedule on all or any
portion of the operating procedures and any other internal workings of any public service
company, including the relationship between any public service company and a related
holding company or subsidiary, consistent with the provisions of section 16-8c, provided
no such audit shall be performed on a community antenna television company, except
with regard to any noncable communications services which the company may provide,
or when (A) such an audit is necessary for the department to perform its regulatory
functions under the Communications Act of 1934, 47 USC 151, et seq., as amended
from time to time, other federal law or state law, (B) the cost of such an audit is warranted
by a reasonably foreseeable financial, safety or service benefit to subscribers of the
company which is the subject of such an audit, and (C) such an audit is restricted to
examination of the operating procedures that affect operations within the state.
(2) In any case where the department determines that an audit is necessary or desirable, it may (A) order the audit to be performed by one of its management audit teams,
(B) require the affected company to perform the audit utilizing the company's own
internal management audit staff as supervised by designated members of the department's staff or (C) require that the audit be performed under the supervision of designated
members of the department's staff by an independent management consulting firm selected by the department, in consultation with the affected company. If the affected
company has more than seventy-five thousand customers, such independent management consulting firm shall be of nationally-recognized stature. All reasonable and proper
expenses of the audits, including, but not limited to, the costs associated with the audit
firm's testimony at a public hearing or other proceeding, shall be borne by the affected
companies and shall be paid by such companies at such times and in such manner as
the department directs.
(3) For purposes of this section, a complete audit shall consist of (A) a diagnostic
review of all functions of the audited company, which shall include, but not be limited to,
documentation of the operations of the company, assessment of the company's system of
internal controls, and identification of any areas of the company which may require
subsequent audits, and (B) the performance of subsequent focused audits identified in
the diagnostic review and determined necessary by the department. All audits performed
pursuant to this section shall be performed in accordance with generally accepted management audit standards. The department shall adopt regulations in accordance with
the provisions of chapter 54 setting forth such generally accepted management audit
standards. Each audit of a community antenna television company shall be consistent
with the provisions of the Communications Act of 1934, 47 USC 151, et seq., as amended
from time to time, and of any other applicable federal law. The department shall certify
whether a portion of an audit conforms to the provisions of this section and constitutes
a portion of a complete audit.
(4) A complete audit of each portion of each gas, electric or electric distribution
company having more than seventy-five thousand customers shall begin no less frequently than every six years, so that a complete audit of such a company's operations
shall be performed every six years. Such an audit of each such company having more
than seventy-five thousand customers shall be updated as required by the department.
(5) The results of an audit performed pursuant to this section shall be filed with the
department and shall be open to public inspection. Upon completion and review of the
audit, if the person or firm performing or supervising the audit determines that any of
the operating procedures or any other internal workings of the affected public service
company are inefficient, improvident, unreasonable, negligent or in abuse of discretion,
the department may, after notice and opportunity for a hearing, order the affected public
service company to adopt such new or altered practices and procedures as the department
shall find necessary to promote efficient and adequate service to meet the public convenience and necessity. The department shall annually submit a report of audits performed
pursuant to this section to the joint standing committee of the General Assembly having
cognizance of matters relating to public utilities which report shall include the status of
audits begun but not yet completed and a summary of the results of audits completed.
(6) All reasonable and proper costs and expenses, as determined by the department,
of complying with any order of the department pursuant to this subsection shall be
recognized by the department for all purposes as proper business expenses of the affected
company.
(7) After notice and hearing, the department may modify the scope and schedule
of a management audit of a telephone company which is subject to an alternative form
of regulation so that such audit is consistent with that alternative form of regulation.
(c) Nothing in this section shall be deemed to interfere or conflict with any powers
of the department or its staff provided elsewhere in the general statutes, including, but
not limited to, the provisions of this section and sections 16-7, 16-28 and 16-32, to
conduct an audit, investigation or review of the books, records, plant and equipment of
any regulated public service company.
(1949 Rev., S. 5398; P.A. 73-355, S. 2; P.A. 75-486, S. 6, 69; P.A. 77-614, S. 19, 162, 587, 610; P.A. 78-303, S. 85,
136; P.A. 80-168; 80-482, S. 4, 40, 45, 345, 348; P.A. 81-348, S. 1; P.A. 82-472, S. 50, 183; P.A. 85-509, S. 2, 11; 85-552, S. 4, 8; P.A. 90-221, S. 2, 15; P.A. 94-229, S. 1; P.A. 97-23; P.A. 98-28, S. 83, 117; June Sp. Sess. P.A. 98-1, S. 5, 121.)
History: P.A. 73-355 specified that hearing examiners may be staff member or member of Connecticut bar; P.A. 75-486 replaced public utilities commission with public utilities control authority, allowed authority to act at request of person,
corporation, company, town, borough or association and added Subsec. (b) re audits; P.A. 77-614 and P.A. 78-303 replaced
commissioner of finance and control with secretary of the office of policy and management and, effective January 1, 1979,
replaced public utilities control authority with division of public utility control within the department of business regulation;
P.A. 80-168 replaced "member(s)" with "commissioner(s)", and "secretary" with "business office", allowed delegation
of powers to hearing examiners and replaced provision whereby hearing examiner had power only to administer oaths
with provision granting examiners same powers as division except power to grant immunity from prosecution; P.A. 80-482 made division an independent department with public utilities control authority as its head; P.A. 81-348 reduced
number of consulting firms required to be included in list provided to company by department in Subsec. (b), from five
to three; P.A. 82-472 made technical corrections; P.A. 85-509 divided Subsec. (b) into Subsecs. (b) and (c) and, in Subsec.
(b), prohibited management audits of community antenna television companies except with regard to noncable communications services; P.A. 85-552 amended Subsec. (b) to require department, instead of affected company, to select consulting
firm for management audit, to require consulting firm to be of nationally-recognized stature if affected company has more
than 75,000 customers and to require periodic audits only of gas, electric and telephone companies having more than
75,000 customers; P.A. 90-221 in Subsec. (b) added provision that the affected companies shall pay all reasonable and
proper costs of an audit, including the costs of the audit firm's testimony at a public hearing and a provision that such costs
shall be paid as directed by the department; P.A. 94-229 amended Subsec. (b) by adding Subdiv. designations, adding
provision re relationship between public service company and related holding company or subsidiary in Subdiv. (1), adding
Subparas. (A) to (C) re audits of community antenna television companies in Subdiv. (1), changing subdivision designations
to subparagraph designations in Subdiv. (2), deleting provision re audits of gas, electric or telephone companies having
more than 75,000 customers from Subdiv. (2), adding Subdiv. (3) re complete audits, adding Subdiv. (4) re audits of gas,
electric and telephone companies having more than 75,000 customers, changing "any such audits" to "an audit performed
pursuant to this section" in Subdiv. (5), adding provision re report of audits in Subdiv. (5), and adding Subdiv. (7) re audits
of telephone companies subject to an alternative form of regulation; P.A. 97-23 amended Subsec. (b)(4) to delete references
to telephone companies and delete provision requiring department to schedule complete audits; P.A. 98-28 amended
Subsec. (b)(4) by adding electric distribution companies, effective July 1, 1998; June Sp. Sess. P.A. 98-1 made a technical
change to Subsec. (b)(5), effective June 24, 1998.
See Sec. 52-260 re witness fees.
Cited. 148 C. 692. (Diss. op.) Cited. 162 C. 51.
Cited. 44 CS 21.
Subsec. (a):
Cited. 210 C. 349.