Report No. 2010-11
January 2010
Complete Audit Report

Findings in the audit of the Public Service Commission

Standards of Conduct
The Standards of Conduct Policy did not provide adequate guidance to interested parties and needed revision to clarify acceptable conduct and comply with state law. During the 3 years ended June 30, 2009, several instances occurred where Commissioners either recused themselves, declared their intent not to participate, or had to defend their decision to continue to participate in regulatory cases. These instances arose as a result of perceived, potential, or actual conflicts of interest resulting from ex parte communication, other contact between the Commissioners and regulated utilities, or social relationships.

The proposed changes to the Standards of Conduct Policy do not include provisions for the commissioners or PSC staff receiving communications to monitor or review filings. As of September 2009, the proposed regulatory changes include 1) more clearly defining terms and reporting requirements related to communication outside of the hearing process, 2) prohibiting all ex parte communication, and 3) requiring communication made within 30 days prior to filing of a case to be reported. The proposed Standards of Conduct Policy revisions do not address or provide guidance related to social relationships between PSC employees (the commissioners, technical advisory staff, and hearing officers) and key officials of the regulated utilities and other interested parties. In addition, the proposed revisions limiting the required disclosure period for communication made prior to filing of a case to 30 days may not be sufficient.

Closed Session Records
The PSC does not maintain minutes for closed sessions. While the open session minutes indicate when a meeting is being closed as well as the reason(s) for closing the meeting, the proceedings of the closed session are not documented through minutes. Section 610.020.7, RSMo, requires a journal or minutes be kept for all closed meetings.

Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov