MORGANTOWN – Public Service Commission staff has completed its review of complaints filed by two customers of Preston County Public Service District No. 1 and determined PSD1 has not done anything to merit a legal referral.
Instead, it has given the PSC eight recommendations for the PSD1 board to improve its oversight.
Both cases had been combined into one. Staff filed its final memorandum on Monday.
On Tuesday, Chief Administrative Law Judge Keith A. George issued an order giving all parties in the combined case 10 days to file a response or objection to the memorandum or to request a hearing. In the absence of any responses or objections, he said, the case will be decided based on the documents in the case file, including the staff recommendation, without hearing.
Staff said in its memorandum that it conducted an extensive investigation into the allegations raised and consulted with the state auditor’s office.
“Staff has determined that, although the investigation did not reveal misconduct warranting referral to law enforcement authorities, it did identify significant deficiencies in Preston County Public Service District No. 1’s administrative oversight, internal financial controls, credit card governance and accountability practices, and compliance with legal requirements governing the disposition of utility property.”
Instead of initiating the general investigation requested by the complainants, staff said it recommends that the PSC direct the immediate implementation of the eight corrective measures it lists.
“These measures are designed to strengthen the district’s governance, enhance operational oversight, improve financial accountability, and ensure compliance with applicable legal and regulatory requirements.” Staff also recommended the 10-day response period the ALJ agreed to.
Former PSD1 employee Penny Nicholson filed her complaint on March 10. As staff summarized, she alleged issues ranging from the mishandling of deposits, employee overpayments and board member misconduct, neglect of duties, improper payments of bonuses, unauthorized donations, inaccurate board meeting minutes, a violation of state code concerning training of board members within six months of taking office, and the mishandling of sale of property.
Michelle Hatch filed her complaint on April 21. As we reported at the time, she cited states codes PSD1 allegedly failed to follow and other alleged misdeeds, including failure to report suspected fraud, failure to try to recover funds, misconduct, neglect of duty, incompetence, colluding by having “little meetings” at the chairman’s house with an employee, violation of open meetings law, falsifying paperwork and meeting minutes, signing falsified paperwork and minutes, and failing to follow PSC Records Preservation and Retention Policy.
PSD1 denied all of the allegations and sought to have them dismissed.
The PSD1 Utilities Staff Analyst who investigated the case, staff said in its memorandum, concluded that although there seemed to be no evidence of criminal activity, there was a lack of oversight by the board members and office management when it came to spending.
Also, there also appeared to be no financial controls set on the district’s spending, and a lack of internal checks and balances. The analyst also noted that PSD1 sold property without abiding by the policies and procedures set forth by the PSC or the state.
Here are the recommendations:
- Within a reasonable timeframe to be established by the PSC, PSD1 shall require all current and prospective Board members to attend and successfully complete the Commission’s Board Member Training Program. This includes re-training anyone who’s already taken the training.
- PSD1 shall file its annual budget with the PSC as a closed case filing for a period of five years following entry of the PSC’s final order in this case.
- PSD1 shall comply with all applicable PSC requirements, policies, and procedures governing the sale, transfer, or disposition of utility property requiring Commission approval. Staff notes that while PSD boards have authority to acquire and dispose of property, those powers remain subject to the PSC’s jurisdiction over regulated utility property and transactions requiring PSC approval.
- Prior to selling equipment or other assets to employees, board members, family members, or other related parties, PSD1 shall consult with the West Virginia Ethics Commission to ensure compliance with applicable ethics requirements in state code.
- PSD1 shall develop and implement written policies establishing appropriate financial controls, including restrictions on credit card usage, documentation requirements for expenditures, and appropriate internal review procedures designed to improve transparency and financial accountability.
- PSD1 shall maintain proper accounting records in accordance with state code and the PSC’s rules and orders; ensure that such accounts are properly audited on an annual basis; and forward a copy of the results of such audit to both the Preston County Commission and to the PSC within 30 days after submission.
- PSD1 should be directed to file a detailed, written report with the PSC within 60 days of the entrance of a final order in this case demonstrating the steps being taken to implement the corrective measures being recommended.
- Upon the submittal of PSD1’s written agreement to implement the recommendations, the joint cases may be dismissed from the PSC’s open docket of cases.
As previously reported, the state auditor’s office has recently conducted an audit of PSD1. Board chair Rodney Liston noted at the last meeting that there were no findings of fraud or embezzlement. The audit report has not been posted yet by the auditor’s office.
