White Paper: Utility & Telecom Audits—Potent (but Painless) Budget Help for Tribal Governments and Casinos
Utility billing errors and miscalculations can cost tribal governments hundreds of thousands of dollars per year—and they are not easy to find! A comprehensive audit process developed and utilized by ERS Utility Solutions has confirmed that many tribal governments are being overcharged for energy, telecommunications, water and sewer services at gaming casinos, schools, health care clinics, community centers and other tribal-run facilities. Reducing utility expenses and recovering overcharges is a potent, but painless, budget solution for tribal governments in this era of self-determination and growing demand for services.
THE CHALLENGE: TRIBAL GOVERNMENTS FACE INCREASING DEMANDS FOR SERVICES WHILE CASINOS DEAL WITH GROWING COMPETITIVE CHALLENGES
Tribal governments are sovereign and self determining. As such, they face growing pressure to provide members with a full range of services, from transportation and safety to housing, education, health care and more. On many reservations, these are housed in multiple tribal-run facilities that require significant oversight and money to maintain and operate.
One major source of revenue in recent years has been tribal casinos. Their popularity and importance to tribal communities have grown exponentially since 1988, when Congress passed the Indian Gaming Regulatory Act (IGRA). It provided a regulatory framework for Indian gaming and defined five specific ways in which casino profits can be spent: 1) to fund tribal government operations for programs, 2) to provide for the general welfare of the tribe and its members, 3) to promote tribal economic development, 4) to support charitable organizations, and 5) to help fund operations of local government agencies.
Many tribal governments are responding to current realities by looking for ways to operate more efficiently and by cutting waste in their budgets. Because casinos and tribal-run facilities such as schools health care clinics and government service centers are very energy, telecom and utility intensive, it makes good business sense to start by analyzing costs associated with these services. A comprehensive utility and telecom audit is a good place to start.
THE SOLUTION: COMPREHENSIVE UTILITY AND TELECOM AUDITS FIND AND CORRECT ERRORS THAT STANDARD BILLING AUDITS MISS
Modern utility billing is extremely complex. Hundreds of calculations by meters and measuring devices go into creating energy, telecom and other utility bills. That often is where mistakes are made. Unfortunately it is difficult or even impossible to spot calculating equipment errors or even regulatory issues just by looking at the bill. Discovering all of these “hidden issues” is especially challenging when tribal governments own or operate multiple casinos and facilities served by different utility and telecom providers or which are located in different states where tax, tariff and regulatory issues differ.
Like many organizations, tribal governments don’t always have the time or expertise to decipher all of the complex rate structures, tariffs and methods of calculating monthly utility bills. Mistakes can go on for years and cost tribes millions of dollars. Catching overcharges early and at the source can save time, money and legal headaches.
The most common type of professional utility bill audit is a standard review of invoices to analyze rates and check for compliance with current utility and telecom service contracts. This basic auditing approach can identify the low-hanging fruit. However, it does not yield the same high-impact results as the three-pronged, comprehensive utility and telecom audit process that ERS Utility Solutions specializes in performing for tribal governments and casinos.
Here is how it is done:
1. Historical, forensic bill analysis and rate review--A comprehensive utility and telecom audit begins with an exhaustive historical review of billings, limited only by the statute of limitations on refunds in each state and the historical data available. Local, state and federal surcharges and fees are researched and line items are checked to identify related billing errors and misapplications. Rates for services are checked for compliance with current and prior contracts.
2. Onsite inspection of metering systems and equipment--Site verification specialists go to work, inspecting and verifying meters and calculating equipment. They check current transformer (CT) and voltage transformer (VT) ratios, delivery pressure settings, meter sizes, meter test records and maintenance histories. On the telecom side, they use a proprietary methodology to reduce WAN service rates, inspect demarks and verify billing detail against services that are installed and in use, identify and clean up outdated analog services, and develop a complete, up-to-date service inventory for each location.
ISSUES IDENTIFIED AND RESOLVED: THREE-PRONGED APPROACH FINDS “HIDDEN” OVERCHARGES THAT A STANDARD UTILITY BILL REVIEW WOULD NOT.
Below are real-world examples of ERS Utility Solutions’ comprehensive utility and telecom auditing at work— discovering and correcting billing errors that other auditing processes might miss.
CONCLUSION: RECOVERING OVERCHARGES AND CORRECTING BILLING ERRORS SAVES TRIBAL GOVERNMENTS MILLIONS OF DOLLARS THAT CAN BE DIRECTED TOWARD OTHER TRIBAL AND COMMUNITY NEEDS.
This unique, three-pronged approach sets ERS Utility Solutions apart. It helps clients understand their utility needs and expenses, identify potential cost savings, and realize long-term, sustainable financial benefits. Choosing the wrong auditing firm is a gamble. Choosing the right one is a winning strategy.
Tom Thackery, CEO & Owner
Tom Thackery founded Expense Recovery Services (formerly dba ERS Audits, TEEG-US, and now ERS Utility Solutions) in 1994 and has personally led more than 1,100 audits and related projects with a total client impact of over $90 million.