Tuesday, November 21, 2006

Managing Money Poorly: Connecticut Innovations

The Journal Inquirer is reporting that Connecticut Innovations is basically ... inept. How else to explain how a 2005 audit turned up things like the failure to to collect revenue from public utilities, and managed to execute contracts without signatures of either the executive director or VP of Finance. This is the agency that shepherds the Connecticut Clean Energy Fund.
Officials at Connecticut Innovations Inc., a quasi-public evelopment agency, have ignored their own rules in approving various e penditures and contracts, including "personal service agreements" tha cost more than $75,000 and were awarded without competitive bidding the state auditors say.

The auditors also say the agency, which administers the Connecticut Clean Energy Fund - which uses money from assessments on utility bills to promote renewable energy sources - may not have collected all of the revenue to which it was entitled. (source: Journal Inquirer)


The article goes on to report that Connecticut Innovations gets its funding from the two utility companies, CL & P and UI.
The fund gets monthly payments from two utility companies, the auditors said, but its documentation supporting the amounts paid by one "consisted of only an assessment calculation," while the other "provided only a check."

They added that while the agency requested more information from the utilities after the period covered by the audit, only one had responded.

CII officials said they agreed with the auditors' findings and recommendations concerning its contract and invoice approvals and personal service agreements, according to the review.

The officials also said they would request a meeting with each electric utility to review the procedures in place and reports available pertaining to the billing and collection of the Clean Energy Fund charges. (source: Journal Inquirer)
Meanwhile CL &P wants to raise electricity rates 8.9%. UI should be announcing its rate increases this week. So must for deregulation and innovation. What was that about the liquid gas terminal in Long Island Sound again?

Journal Inquirer, Auditors rap development agency for contracts, Clean Energy revenue by Don Michak 11/20/06

15 comments:

Anonymous said...

This can't be. Rell cleaned up Connecticut.

Anonymous said...

The LNG terminal is to supply the NYC market, not CT or Long Island. and Rell is announcing a bigger than ever surplus over at the Hartford Courant but no mention that she doesn't use GAAP to calculate the budget because only the municiplities are required by state law to do that and no mention of our outrageous debt or unfunded liabilities like the teacher pension account. Financial management through the looking glass with Jodi Rell in La la Land.

turfgrrl said...

anonymous 11:47: Don't blame Rell for GAAP, that would be the Democratic legislature.

Anonymous said...

Rell hasn't said a peep about the lack of GAAP. She's full time with a chaffeur, the legislature is part time without a clue.

Anonymous said...

Pauline Murphy (Director of Investments) joined Connecticut Innovations in 2002 as its Controller and in May 2005 became a Director of Investments. Prior to joining Connecticut Innovations, Pauline was controller of an early stage software development company. Pauline has over ten years of experience in both manufacturing and service organizations and began her career at Ernst & Young, LLP. Pauline is responsible for managing the professional accounting, treasury and other related fiscal activities.

Pauline graduated magna cum laude with a BS in accounting from the University of Connecticut. Pauline is a registered CPA in the State of Connecticut.

http://www.ctinnovations.com/site/equity_investments/investment_team.asp

Our tax dollars at work!

Anonymous said...

The guys at Arthur Anderson that did the ENRON audits were CPA's too. It's an energy thing I guess.

Anonymous said...

So, now we finally get the Dem GA excuse/goal for everything. "We are part-time. Rell is fulltime with a chauffer." Make us fulltime and give us a driver and we'll do more and better. The GA in CA and NY is fulltime and they make about $100K a year. Now, it all falls into place.

Anonymous said...

No, the point is to make Rell parttime and take away her driver.

Anonymous said...

Rell should just stay in Brookfield and do us all a favor.

GMR said...

The Day editorial was pretty interesting...

If Connecticut wants lower electric prices, it needs to either lower demand for energy or increase the supply of energy and/or hope that supply/demand factors outside of the state move in its favor (i.e., hope that the price of natural gas and oil fall).

I don't see much in the way beyond lip service to reduce demand. It's damned difficult to manage the demand side in anything but price. During times of a popular war, you can cajole people into using less out of a sense of patriotism (there's a WWII propoganda poster that says "When you ride alone, you ride with Hitler" that tried to get people to use less gas). If you don't raise the price, then people are going to have a hard time being convinced to use less, in general.

That leaves supply. Connecticut doesn't seem to like adding supply to its electrical generaton capacity very much. A large baseload coal plant would certainly be met with objections. A nuclear plant? That'd be tied up in courts forever. Natural gas? In principle. But where to put it? Yeah, the LNG plant in the sound is for NYC. But power is somewhat fungible in that it can move across state lines, at least in short distances. So this isn't so much a Connecticut problem as a northeast problem. Here in the northeast, power is about 2.5 times what it is in the farm belt or in the pacific northwest.

So when demand is going up in the Northeast faster than supply, prices are bound to go up.

Anonymous said...

We'll see the GA get raises long before we see a part-time governor.

Anonymous said...

Let's recognize that the audit refers to the fiscal year ending June 2005 and is old information about Connecticut Innovations dating back almost two years.
There is entirely new leadership at the organization as well as substantially a large number of new board members. New Board governing procedures have instituted as well as management procedures. No one can change the past, but can certainly ensure that there be no future re-occurences

Anonymous said...

Suggesting that June 2005 was two years ago is ridiculous. CI is a place for political bag money to be spread around by unaccountable people.

Anonymous said...

CI's investments are self funded, and its ability to continue comes from its own success not from any taxpayers dollars. CI is accountable to and governed by a Board of Directors that oversee all its activities. June 2005 was 17 months ago, but the audit refers to the year begining July 1, 2004 which is actually almost 2.5 years ago, hence average two years ago.

bluecoat said...

"CI's investments are self funded" with the "self" being the taxpayer.