Press Release

PUC Responds to Auditor General’s Act 13 Impact Fee Audit

Published on 12/6/2016

Filed under: Electric Gas

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today offered the following response to the release of a performance audit by the Pennsylvania Department of the Auditor General, involving the administration of unconventional gas well impact fees:

Over the past five years, since the passage of Act 13 of 2012 and the inception of Pennsylvania’s unconventional gas well impact fee program, the PUC has fulfilled its obligation to collect and distribute more than $1 billion to counties, municipalities and other organizations. This achievement is reflected in the following positive key findings by the Auditor General:

• “PUC appears to have accurately distributed the impact fees to the conservation districts, state agencies, and counties in accordance with the law” (p. 22),
• Additionally, with respect to the application of the municipality budget restriction, “PUC appears to have accurately applied the municipality restriction limit in accordance with the law” (p. 24),
• And lastly, “with the limitation of relying on the self-reporting budgets from the municipalities, PUC appears to have accurately calculated the impact fees distributed to the municipalities in accordance with the law” (p. 27).

Findings included in the audit also point to the potential benefit of additional training for municipal officials, which the PUC has provided and is working to enhance – including the development of a webinar for municipal budget reporting and additional materials for municipal officials available on the Commission’s Act 13 website. The PUC also continues to work with statewide associations for townships, boroughs and county commissioners to communicate about impact fee issues, and entered into a Memorandum of Understanding with the Pennsylvania Department of Community and Economic Development in 2013, to provide ongoing training to municipalities.

Although the Commission was accurate in the calculation and distribution of funds, concerns were raised by the Auditor General regarding the accuracy of budgets submitted by municipalities which serve as the basis for certain distributions. Additionally, a finding noted that a portion of impact fee expenditures reported to the Commission by some municipal recipients may not comport with the requirements as outlined in the Act. As for these audit findings, specifically involving monitoring of local government spending and verification of budgets submitted by those entities, it is important to note that the Commission is not authorized to monitor, audit or enforce local government spending – something that was clearly acknowledged in the audit report.

The Commission emphasizes in its audit response letter that “other state agencies including the Department of Auditor General, Office of Attorney General and County District Attorney Offices, the Department of Community and Economic Development and the State Ethics Commission have general audit authority over county and municipal expenditures.”  As such, impact fees are subject to government oversight and audit at the state and local level.   

These broader discussions regarding the structure of the act, reporting requirements for fee recipients, potential monitoring of impact fee uses and other issues raised by the Auditor General are matters for the Pennsylvania General Assembly.

A point-by-point list of the PUC’s responses to the findings and recommendations included in the Act 13 audit report are detailed in the Oct. 27, 2016 letter from the Commission to the Department of the Auditor General.

Extensive public information about Pennsylvania’s impact fee program is available on the PUC’s interactive Act 13 website. Visitors can review specifics on funds collected and distributed for each year since 2011.  The site allows individuals to search and download statistics such as distributions to individual municipalities or counties; allocation and usage of those funds, based on reports submitted by various municipalities; eligible wells per county/municipality; and payments by producers.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.

For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility.  “Like” Pennsylvania Public Utility Commission on Facebook for easy access to information on utility issues.

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Contact:

• Nils Hagen-Frederiksen
  Press Secretary
  717-418-2701
  nhagen-fre@pa.gov