Alright, good afternoon. I'll call this morning.
Meeting the Tennessee public utility Commission internal audit committee to order. This meeting is being conducted via the Webex online platform. The public has provided with an access to observe the meeting consistent with our published notice. The meeting is being recorded before we begin our.
And I will ask each of the commissioner to identify themselves for the record, please.
Commissioner Hilliot here.
Which one higher here?
Commissioner Good here.
Commissioner Crowd here.
Mr. Morrison here.
Commissioner Kennethel here.
Alright, and then commissioner Jones here. Alright, we will now proceed with the agenda starting with item number one. 1st, the committee will consider the internal audit report for the physical year ended at June 3020 26. Michelle Morrills chief internal auditor will make the presentation, so Michelle, if you're ready, would you go ahead and do your presentation, please?
Okay, good morning commissioners. Good morning. I'll give you a quick walkthrough of internal audit reports for the fiscal year ending June 32026. We follow the audit plan you approved and as always work closely with.
Step across the agency to understand how things are working day to day. So to start off, the big picture is very positive. We didn't find any significant non compliance or improper activity in the area we reviewed. So starting with inspection fees, this is an area we look at every year since it's such a big part of.
The agency's funding. Everything we tested, how fees were calculated, collected and recorded, checked out. So we did, but we did check on one utility that hadn't paid, but since the company hadn't dissolved.
That issue closed itself out. So NO concerns there. Next is hiring and separation procedures. All of the executive service hires follow the Department of Human resource requirement.
And DOHR confirmed that for us. So, and the separation we reviewed were handled according to DOHR rules and we didn't find any exceptions. So moving over to data security and integrity.
Most things looked good, but we did find one instance where a former employee still had a temporary training access. That access was removed immediately once we spotted. We recommended more frequent review and management is now doing.
Early checks which should prevent this from happening again. Then we review the shared databases. We looked at several systems, checked the user access, and tested a few functions. Everything was appropriate and working the way issued.
And finally, we followed up three prior audit recommendations. Inspection fees, conflict of interest, and following requirement. 1st inspection fees, last year we recommend adding all utility types to the delinquency.
Processed and documenting the cfo's with reconciliation steps. Management updated the procedure and make sure all utility types are included. Those update were completed in February 2026. Next conflict of interest.
Previously, we found two employees who hadn't completed their annual forms. We asked HR to put a written follow up process in place in place. They updated the procedures and added follow up controls.
That recommendation is now fully resolved. And finally, following requirement. We found earlier audits that following procedures didn't reflect current practice. Management did a full update, revised the document procedures manual.
Update the rules, got all necessary approvals and implemented the new rules in November 2025. Everything is now aligned. So overall, internal controls across the agency remains strong. Aside from the one X.
This issue which has already been addressed. We didn't identify any concerns. So, if you have any questions, I would be happy to answer them.
Okay, Michelle, thank you. Is there any discussion on the report?
All right, I'm hearing none. I'll make a motion to approve the report. Is there a second to approve this report?
Bye bye.
Alright, great. Let's do a roll call. So would you please identify yourself and vote whether you approve or disapprove the report? Commissioner Jones Voteches.
Hello your votes you asked.
Mr. Hire goals cheers.
Commissioner yes.
Mr. Morrison post Chess.
Commissioner Crowd Votes.
Commissioner Hill boachest.
Alright, the motion certainly passes. Thank you, and we'll move on to item number two. Next we'll consider the internal audit plan for the fiscal year ending June 3020 27. Michelle, would you like to present that as well?
If you see the email that I sent you last two weeks ago, the attachment C is our internal audit plan for the fiscal year ending June 32027. This plan outlines the audit internal audits, the internal audit will focusing on next year along with the objectives and the estimate hours for each project. 1st, we will continue our annual review of inspection fees.
This is one of our highest impact audit and we perform it every year since these feeds make up such a major part of agency's funding. Next, we will take a look at it tip up manual and policy process.
Here, we will assessing whether tip up policies are consistently updated, properly approved or clearly communicate with employees and align with the state's policy requirement. 3rd, we will review the annual utility cyber security.
Plant reports. This all they're focusing on whether utilities are complying with statutory requirement and whether their cyber security plan reports are being handled and protected the way confidentiality loads require.
4th, we will audit compliance with a selected rule. We will select one rule chapter and review how well the agency is following it or in some case whether the rule itself is outdated.
And needs to be reevaluated to match the current environment. And finally, we will complete our standard follow up on prior audit recommendations. This involves checking on any outstanding recommendations and confirming that corrective action have been fully implemented.
So those items can be closed. So overall, the plan includes five audit areas, all scs scheduled to be completed by the end of May 2027. These projects cover both our statutory responsibilities and the agency.
These everyday operational needs and they give us a good view of e risk and control across the agency.
You have any question or happy to answer it.
Are there any questions?
No, NO.
All right. Is there any discussion on the plan for the next year as presented? Alright, I'm hearing none. I make a motion that we approve the internal audit plan for the physical year ending June 3020 27 is presented by Michelle. So is there a second?
Commissioner hear you a second.
Everyone to do a roll call and vote, please. Jones vote yes.
You know you're both here.
I vote yes.
Oh cheers.
Crowdot cheers.
Hill votes yes.
All right, the motion does pass. Thank you. We'll move on to item three. We will next consider the functional internal audit charter. I think Chris Eaton, our utilities director and committee secretary is going to discuss the charter with us. So Chris, would you like to proceed?
Absolutely. Thank you mr. chairman. Commissioners. I appreciate the opportunity to talk with you for a few minutes. I wanted to bring your attention to an initiative in an internal audit that we've been working on. We're actively looking for ways to increase efficiency and capacity within the utilities division. As you know, we.
We've experienced many some key retirements and having ever increasing workload. So one of the areas that we've been looking at is internal audit and the functions of internal audit and possible outsourcing of those tasks. When I was at the Department of agriculture, one of the divisions I did manage was the internal audit.
Divisions and at other entities across the state, especially the larger ones, they have dedicated internal audit divisions where the staff is dedicated solely to internal audit, and those individuals work on on nothing but internal department business. They perform internal audits annually.
As well as internal compliance reviews. When the financial integrity Act was passed about 15 years ago, Tpop didn't have the positions and didn't have the fundings appropriated for the purpose of a position dedicated solely to internal audit. And so the agreement was made with FNA that we would utilize existing.
Audit staff from our utilities division to perform those functions. This has worked well. The team's done a very admirable job of fulfilling those obligations, but it it does come at a very busy time for staff and it takes a lot of their time to perform the audit. When I was at the Department of agriculture, one of the people that I met was the state of Tennessee executive internal auditor mr. Larry Hall. He's functionally attached to FNA and reports to the governor's chief of staff.
What, what he does is organize all of the internal auditors at different departments around the state. He helps to train them. He helps to give them uniformity in what they do and give them direction in their activities. So I reached out to him to see if he had some ideas about what.
What we could do to possibly outsource this and what possibly could his team even help us. The 1st that he didn't make any promises, but he's he is very open to the idea of helping us, but the 1st thing that he wanted to do was to review our functional internal audit charter. I informed him that we didn't have a functional internal audit charter, that we simply had a charter that established our internal audit committee.
He thought it would be a very good idea for the, for us to come up with a functional audit charter. That, that, that charter would give a little more definition to the functions of staff and what they do, rather than just the committee. There is some overlap between the commit.
But he provided us with a template from the International Association of internal auditors suggested that we modified it to, to meet our needs and structure and then to formally adopt that. He felt like that would also allow him or any other outside entity to have a better understanding of what we do, what our goals are, and then help us to perf to perform our internal audit functions for us. So we've.
I'm actively working on that internal audit charter. We're making sure that it aligns with our needs and that it aligns with our current committee charter. And I just, I didn't, we don't have anything to vote on today, nothing to make motions on, but I wanted to make you aware of it because in the next couple of weeks I'm gonna send you a copy of what staff has drafted. I'd love for you to look over it, give us any suggestions that you may have. I know many of you are.
You're Familiar with internal audit work and your pri in private industry and the work you've done on your own. And we'd love to have your input. I'll get that over to you and you can get us back any comments that you may have about it and then we'd like to reconvene this committee to to review and vote on that.
Down the line possibly at our next, around the time of our next regularly scheduled meeting.
Okay, Anybody have any questions.
Questions.
Chris, when you say regular schedule, but you mean our regular audit committee meeting or a regular T PO.
Our I'm sorry, our regular tpop meeting. Yes, I I didn't mean to wait until next year to do it. I I'm I'm referring to our next regularly scheduled meeting, I believe in August.
Alright, great. Chris, thank you for your work on that. It's important that we get the charter done and you're making good progress. Any questions for Chris on the, the charter he's working on?
No.
Alright, we look forward to Chris to seeing the final result and certainly give you our comments. We'll move on to item four. Is there any miscellaneous business?
Anyone have any miscellaneous business today? No. Alright, item five, let's schedule our next audit committee meeting. Our practice has been typically to do that in June of each year. Is everyone ok that we go ahead and tempt to please schedule it for next June and we'll nail the date down sometime in the month of June?
In the coming weeks.
I agree, good with me.
Yes.
Agree. Yes.
That's fine.
Ashley, if you'll work to get some date nailed down that's agreeable to everyone, that'd be great.
Wait. Will the.
When we've complete the agenda, now we'll move to public comment. At this time, this is a remote meeting. Advanced notice of comment is required is listed in the notice of the meeting. The document manager has informed me that we have one person a given, that has asked to give some comments. So if you would please identify yourself and spell your name for our court reporter and.
Identify any organization you maybe speaking on behalf of today, and we would encourage you to try to keep it to 5 min or so if you would. So, would our commenter please proceed?
Yes. Hello. Greetings, everyone. My name is Pamela Mosesch and I am a the founder of Rise Up America and a member of the 21st country.
Mythoths or both. Two organizations represent over 1100 residents who have been sharned by mythoth light gas and water. I am here today to formally place on the public records that we became, we came before this commission before pursuing further.
Legal actions against MLG and W and potentially against this commission itself for failure to act. Your own mission states that the Tennessee public utility commission exists to ensure utilities provide Tennessans with dependable services and fair and reasonable rates.
And you are committed to safeguarding Tennessee's consumers through fair oversight and informed decision making. Those are not my words. Those are your words. I've got it from your website.
So today I'm asking each one of you that didn't have any discussion on the audit items to stand behind the words of this commission. ML G and W because it's a public entity, a public utility entity, and it belongs to the citizens of Mythis. It does not exist to profit from Mythis. It.
Exist to serve methods and it has failed tremendously. They're obligation, three of them specifically I'm gonna be to you today about number one MLG and W has been continuously and yes? Yes?
Oh, I thought somebody said something. ML D and W has been continuously with their intermittent and estimated bills, they have been with their smart meters and traditional meters alike are being charged for usages that never actually get measured. Bill have to bill.
Estimate after estimate with NO accountability there is NO correction. Number two, during the winter of 2026, our members were blindsided by extreme spikes in the purchase gas adjustments and the fuel cost adjustment charges. These spikes arrived without adequate notice, without transparent.
Explanation and mostly mostly without any apparent review or intervention from this commission. Families like myself on fixed incomes and seniors and working households, we were devastated by this. 3rd MLDNW has been applying.
Can whoever's speaking, please mute. I didn't speak when anyone else was speaking. MLG and W has been applying abusive late feed policies on top of these already disputed and inflated charges. Penalizing the very customers who are trying to challenge the bills, they should never.
Have received. My question today commissioners, where is your oversight when these estimated bills went unchallenged? Where are your informed decision making when fuel caused fight and went unreviewed? The law charges you.
With protecting consumers. Our members are those consumers. We now have 1100, but we are growing. My personal goal is 2500 by the end of this month. We are prepared to pursue a class accent lawsuit against MLG and W If this commission chooses inaccent, I want the records to.
Follow every proceeding that comes next. We are here today in good faith. We are here asking this commission to investigate, to act, and to fulfill the Tennessee laws that have been placed on youth. The citizens of Methods are watching and we will not be silent. So before I conclude, I want to point out two things. Number one.
Right now, you were talking about auditing. MLG and W is not compliant. MLG and W should post monthly financial reports within 45 days. It's 27 June and January hasn't even been posted. The next thing I'd like to bring to your attention, which is happening right now, I have a great group of people that, and we're all volunteers, we don't get paid to do this. We're just trying.
Trying to make this better and make it better, I guess as commissioner Taylor would say. But there's a thing called load shedding. It's a control process in which the electrical distribution system, you know, is prevented from a complete blackout. And right now, cause I've been on this meeting with you, I gotta notice that there are 26 outages in.
And 767 customers are being affected. But what I have to say to you is you may not live in Memphis, but you may have friends here. It's about to be a hundred and ten degrees this week and somebody's power is gonna go out because they're doing this to try to keep the grid from crashing completely because our city got sold out by some billionaires. Now I heard that there was somebody on here that used to work from the Department of.
Agriculture and I'm really big and that my grandfather and grandmother was a farmer in Madison Tennessee so I'm big on agriculture. So you gotta understand like elderly people and people like me with asthma, we can't be without utility ever. That could cause someone to die. But I'm just asking this board to do what I said before. Your job, which is to investigate what is going on in Memphis. I lived in East Tennessee I never had a problem. We can't.
You'll beat, and that's that's all I have to say and I would like some feedback, please. Thank you for your time and thank you for allowing me to speak.
Miss mr. chairman? Yes. Since I lived in near Memphis and worked in Memphis, I'm not sure miss Moses is aware that the city council and the mayor have responsibility for MLG and W We do not regulate MLG and W We have NO authority of MLG and W So she needs to go to the city council.
Sir, I've been to the city council. In fact, our city council is corrupt. I'm sorry to tell you that, but our city council is corrupt. They cut back room deals with Elon Muff and they have allowed people to come into this city and they're bleeding our water and they're, they're doing.
All this damage to the grid and they're pushing the cost off to the consumers. I've been to the city council. I understand policy and procedure. I'm also a congressional candidate, so I know protocol, your job as the utility commission and the information that I've researched, I think y'all have been in existence since 1800 to 19 early 1900. Your job is oversight, and that's what I'm looking for. I'm not asking you to do anything to the city council. The city council rubber stamps their minutes and do same night minutes.
Every time they meet. You should watch it. I've been to them. I'm coming to you now because when I found my federal lawsuit with this 1100 or hopefully 2500 people that we represent, I don't want it to be any misunderstanding why I didn't come to the utility commission.
I would say that I would recommend if you want to file your lawsuit you do it against the city council and MLG and W if you, if you have an attorney that's working with you, if you'll get them to look at the state law, you will see that we have NO authority to do anything and NO oversight over MLG and W.
So when it comes to the things that I mentioned in, my presentation to you, is it, is it what you're saying to me is that an oversight commission is not supposed to look into what I'm saying? Is that your position at the chairman of this board?
Now, I'm not the chairperson. I'm just a commissioner. My name, my name is Herbert Hilliard and the city council sets their rates. The city council regulates them. That is your, that's the oversight body for MLGNW. If you have.
Have an attorney, if you'll get them to do their research, they will come back and tell you that we have NO oversight over them.
Ask them, I would suggest that you go ahead and do that.
And we appreciate your comments. Unfortunately, there is nothing we can do for you. The General Assembly gives us the authority over private investor owned utilities and not over municipal utilities. You know.
But I understand that, but in 1955, the public service commission had a long tradition ensuring fairness and reliability for essential services. Together, you as a.
Commissioner and the executive direction director are to ensure that the public and the investor owns natural gas, electric water, waste water utility provide Tennesseeens with the clinical service and fair rates. That's what it says on your website. It doesn't say that on the city council website. It says that on your web.
Website and I'm not trying to be combating. I'm just trying to get you to revisit your authority and see what you can do because it says that you have some authority.
We appreciate your comments.
Yeah, thank you madam Moses, so we appreciate the comments very much today.
I didn't get the attorney's name, I need her name for service.
My name is Kelly. G R A G M S.
Okay, thank you. Y'all have a wonderful.
Thank you. This concludes the business before the meeting.
You take it.
Bye bye. Thank you. Bye.