Dive Brief:

• The California Department of General Services released an independent audit of the state's Public Utilities Commission this week, detailing a host of issues with how regulators complied with business management practices just days after Gov. Jerry Brown announced sweeping reforms at the agency.
• According to the 11-page audit, the commission contracted improperly with private law firms, did not properly maintain paperwork, and paid vendors for work that was incomplete or not up to specified standards.
• The audit comes two days after Brown revealed a plan for overhauling the agency, including the expansion of public access, records requirements and oversight.

Dive Insight:

The General Services' audit is unusual in several ways, including, as the Los Angeles Times points out, that the report was almost two decades overdue. The newspaper reports the reviews are supposed to happen every three years, but this was the first one completed in 20 years.

Additionally, the report is dated September 2015, and the Times reports GS officials declined to explain the delay in revealing its findings.

And finally, the audit hints at unspecified issues being handled outside the public view. "During our review we also identified other matters requiring attention that we discussed with CPUC's management but are not included in this report," the audit says. "Overall, we concluded that CPUC's policies and procedures are not sufficient to provide reasonable assurances of compliance with requirements governing the state's various business management programs."

The CPUC has been involved in its share of controversy in recent years, and the state is currently conducting a criminal investigation into former CPUC chair Michael Peevey following revelations last year that the regulator met secretly in Warsaw, Poland, with officials from Southern California Edison. The ex parte meetings were related to settlements surrounding the close of the San Onofre nuclear facility and the chairman's attempts to secure funding for research at UCLA.

Peevey has also faced other allegations of improper communications after a release of emails unveiled secret dealings between himself and Pacific Gas and Electric, following a 2010 gas line explosion that killed eight people and flattened a neighborhood in San Bruno. The former chair stepped down last year.

While Gov. Brown vetoed six bills last year aimed at implementing reforms at the agency, his administration this week issued a broad plan to add oversight at the commission. Among several goals, Brown and other lawmakers said they want to increase the CPUC's focus and expertise by "relocating responsibilities and making logistical changes that improve the commission's ability to function."

Those changes include authorizing the commission to hire and locate employees in San Francisco, Los Angeles and Sacramento, requiring CPUC voting meetings to be held in various regions of the state, and allowing a commissioner to issue an alternate proposed decision at any point before a vote. Current law requires issuance of the alternate proposals alongside a proposed decision from the presiding administrative law judge.

The changes will also push reforms that make it "easier for the public and watchdog groups to participate in CPUC proceedings," according to Brown's announcement. Changes include prohibitions on former regulated utility executives from serving on the commission for two years, allowing any California agency to participate in CPUC proceedings without official party status, and authorizing the California Attorney General to bring an enforcement action in superior court against a decisionmaker or employee of the commission who violates the ex parte communication requirements.