Postponed/Cancelled Capital Projects - PSO

As part of our annual audit plan, we reviewed the process for postponing and cancelling Power System Operations (PSO) capital projects. Our audit objectives were to determine whether fiscal years (FY) 2007 and 2008 project postponements and cancellations were (1) properly approved, (2) effectively communicated, and (3) monitored to prevent inappropriate charges.Based on our review, we determined that PSO's postponed and cancelled projects (1) contained a capital classification designated by Fixed Asset Accounting (FAA), (2) were approved in accordance with Standard Programs and Processes 2.1, and (3) had valid justifications for postponement and/or cancellation. We also noted that project changes were communicated internally using a listing of projects known as the "checkbook," rather than Five Year Project Plans. We determined the use of the checkbook was a reasonable alternative to the Five-Year Project Plan.We also determined that project cancellations required to be communicated to FAA were communicated to FAA in a timely manner. Finally, we noted that while there is no policy governing the splitting of project costs, there is an independent review of project costs performed by Financial Services personnel and an expectation for employees to appropriately charge their time to the specific project(s) they work on.