A Performance Audit of the Utah Telecommunication Open ...

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The data in Figure 3.2 shows that, while the new marketingprogram began with a head start on planned enrollment, newsubscriptions have grown at a much slower pace than anticipated inthe five-year plan. To achieve the expected number of new subscribers,UTOPIA, under its new UIA-financed plan, would need to add about450 subscribers each month for the first year. From July to April, theagency added about 190 subscribers each month. Despite focusedmarketing efforts, the agency has been consistently missing itssubscriber targets.UTOPIA Reports UIA Revenues Are Meeting Expectations.Apart from subscribers, another indicator of the network’s success isits revenue growth. UTOPIA officials argue that while their subscribercounts are below target, the real test of network health will berevenues. Figure 3.3 shows that reported accumulated revenues wereperforming better than plan targets until May, 2012.Figure 3.3 UIA Accumulated Revenues Compared to PlanProjections. For most of fiscal year 2011, UIA revenues exceededexpectations at first because the financial plan assumed the agencywould offer promotional deals which were not offered as modeled. Also,business revenues have exceeded expectations.700,000600,000UIA accumulatedrevenues initiallyperformed better thanprojected because ofearlier than anticipatedrevenue collection.500,000400,000300,000200,000100,000PlanActual‐Source: Data provided by UTOPIA administration.The CFO reports that UTOPIA staff originally modeled a possiblepromotion into their projections that they did not use, allowing more- 34 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)
evenues to be collected early in the plan’s implementation. Anotherreason for higher than anticipated revenues is increased businessrevenues early on in the plan.While accumulated revenues had been performing ahead ofprojections until May 2012, a review of monthly revenues shows morecause for concern. Figure 3.4 shows monthly revenue targetscompared with actual revenues collected.Figure 3.4 UIA Monthly Revenues Compared to Plan Projections.UIA monthly revenues began ahead of target because of unanticipatedbusiness revenues and unutilized residential promotions, which weremodeled into original plan projections.180,000160,000140,000120,000100,00080,00060,000PlanActual40,00020,000‐Source: Data provided by UTOPIA administration.While UIA’s plan predicts a steep increase in monthly revenuesafter October 2011, actual revenues have not kept pace withprojections. The main reason revenues are falling below targets relatesto the information presented in Figure 3.2, which outlines UIA’sprogress in subscribing residents in its member cities. Subscribers arenot growing at the levels UIA anticipated, and thus UIA is unable tomatch its revenue projections. Figure 3.4 shows the impact ofUTOPIA’s promotional deal. The planned revenue (in blue) grew veryslowly between July and October 2011 because the agency included apromotional offering to new subscribers in its projections. The actualrevenue (in red) exceeded the plan because the promotional deal wasnot offered, or at least not to the extent identified in the plan.UIA monthly revenuesare falling behindtargets because ofslow subscribergrowth.Office of the Utah Legislative Auditor General - 35 -
Page 1: REPORT TO THEUTAH LEGISLATURENumber
Page 5: DigestA Performance Audit ofUtah Te
Page 9: Table of ContentsDigest ...........
Page 12 and 13: will be funded through UIA financin
Page 14 and 15: the organization’s general manage
Page 16 and 17: UTOPIA Did Not Reach Its Goal to Bu
Page 18 and 19: UTOPIA did notachieve its goal toco
Page 20 and 21: Figure 2.4 Summary of the Agencies
Page 22 and 23: efinancing, the maximum amount pled
Page 24 and 25: One consequence of the slow growth
Page 26 and 27: factors in deciding where to build.
Page 28 and 29: completed in a timely fashion and h
Page 30 and 31: Figure 2.10 Seven Years of Operatin
Page 32 and 33: Figure 2.11 By 2010, UTOPIA Had Spe
Page 34 and 35: plan did not anticipate the difficu
Page 36 and 37: end of 2010, 3,698 former subscribe
Page 38 and 39: Uncollected revenuesfrom retail pro
Page 40 and 41: agreed to provide UTOPIA with a $66
Page 42 and 43: As problems mounted, the board deci
Page 46 and 47: As stated previously, two possible
Page 48 and 49: This Page Left Blank Intentionally-
Page 50 and 51: UTOPIA Has a New Development PlanAi
Page 52 and 53: Centerville and in its legacy areas
Page 54 and 55: UTOPIA shouldidentify specific area
Page 56 and 57: e applied. Not surprisingly, we fou
Page 58 and 59: act in its entirety. Also, the agen
Page 60 and 61: Manual, which describes how local a
Page 62 and 63: in public, the executive committee
Page 64 and 65: separate public body that must comp
Page 66 and 67: public entities that are subject to
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Page 78 and 79: Five‐Year Plan Summary 2Agency (U
Page 80 and 81: Five‐Year Plan Summary 4cities’
Page 86 and 87: - 76 - A Performance Audit of the U
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