Dozens of Palo Alto's refuse customers have received inaccurate bills for trash pick-up services because of discrepancies in the data used by the city and its hauler, a new audit from the Office of City Auditor has found.
The audit, the first under new City Auditor Harriet Richardson, showed that customer information in the city's SAP system did not match the services recorded by the hauling company, GreenWaste of Palo Alto, in 3.5 percent of customer accounts. Of the 685 customers whose records didn't match up, 192 have had their accounts reviewed and adjusted as of March 20. The adjustments included $50,596 in back billings and $124,985 in refunds.
The problem of inaccurate billing is far from new, according to the audit. In October 2011, when city and GreenWaste staff compared the customer data in the city's SAP system and in GreenWaste's RAMS (Route Accounts Management System), the discrepancies led to billing adjustments totaling $389,989 for commercial accounts and $11,107 for residential ones.
"Customer data discrepancies not only cause billing inaccuracies but also limit the City's ability to effectively use its cost of service model, which requires accurate and reliable customer data," the audit states.
The report points to various problems in the way the two systems interface. The auditor's office has been working with city and GreenWaste staff to identify and analyze the root causes of the discrepancies found during the audit. The new audit found 123 accounts in the hauler's system that were either duplicates or were not needed. In many cases, one commercial customer would have two accounts. Customers who have two recycling carts would sometimes have two accounts, one for each cart, rather than one account showing two carts. There were 9,220 records in the hauler's system that could be combined into 4,066 records, the audit states.
The report recommends that city management work with utilities staff and GreenWaste to "clarify roles and responsibilities over obtaining information required for determining customer type, recording data, and maintaining the accuracy and completeness of the refuse customer type data."
The audit also concludes that the Public Works Department "should further improve its management of the City's Solid Waste Program to ensure accurate refuse billings, ensure sufficient revenue to recover the cost of services, and provide reliable and useful financial and operational data in support of management's strategic and operational decisions."
"Public Works has had ongoing concerns regarding the integrity of its refuse customer billing data since the inception of the City's GreenWaste of Palo Alto contract; however, it has not effectively and conclusively addressed these concerns," the report states.
The report also faults Public Works for providing financial and operational data that is not consistent with the other financial documents, without including clarifying information for the discrepancies. This was the case in fiscal year 2011, when the department's projections for the net assets in the Refuse Fund differed from those in the city's financial statements or budget documents. The audit cites "concerns regarding the reliability and usefulness of some financial and operational data used by the City in making strategic and operational decisions."
The audit recommends that the department "ensure reliable and useful data are provided to stakeholders for informed decision making."
The city manager's office largely agreed with the auditor's recommendations about the discrepancies in customer data for refuse rates. City Manager James Keene's action plan includes adopting a new method that creates unique record numbers to allow for comparison of city and GreenWaste's data. The methodology is slated to be finalized by late September.
In a letter to Richardson, Public Works Director Mike Sartor acknowledged that because of the city's 2009 change in refuse service and the complexity of the interface between SAP and RAMS, "there remain inconsistencies in customer accounts between the two systems." The city and the hauler "are continuously working together to identify, correct and enhance the systems to eliminate these discrepancies."
"Ensuring accurate billing information and program data is a priority for the City and is used for the planning and monitoring of revenues and to support analysis for rate setting," Sartor's letter states. "The City makes continuous efforts to correct the discrepancies that have resulted from the interface problems and maintain the integrity of two complete database systems."
"Staff manually monitors the data exchange and fixes errors as they arrive on a daily basis. Despite great work of staff, this manual check may not eliminate every bit of risk to the accuracy of the billing system."
The city manager's action plan agrees with all 16 recommendations in the auditor's report, which include performing a cost-benefit analysis to determine the optimal course for maintaining accurate data; clarify the roles and responsibilities of Utilities Department and GreenWaste staff who maintain the data; and work with staff from the Administrative Services Department to ensure that all financial data is "verifiable, understandable, timely, consistent and useful for decision making processes."