A Performance Audit of the Utah Telecommunication Open ...

UTOPIA shouldidentify specific areaswhere mistakes havebeen made and draft aformal policy toaddress each problem.A Written Plan Is a Basic Accountability Tool. By drafting awritten development plan, UTOPIA can articulate the changes it hasmade to its construction process, communicate the steps it has takento address past mistakes and provide a timeline when certain goals andmilestones might be accomplished. A well-written plan can also helpUTOPIA gain the support it needs from its member cities, ensure staffand board members clearly understand the strategy, and hold staffaccountable for achieving the agreed-upon goals. Without specificnarrative to a written development plan approved by the board, wequestion how UTOPIA can claim it is committed to a new businessstrategy that will lead to the completion of the network and avoidrepeating past mistakes.Improved Management Practices Should Be Formalized inPolicy and Approved by the BoardAs mentioned in Chapter III, UTOPIA’s board and managementteam readily admit that several mistakes have been made in the pastthat contributed to the agency’s weakened financial condition. Theyhave also told us that they have taken a number of steps to make surethe problems have been addressed. However, we have not been able todocument that any formal board action has been taken to prevent theagency from repeating the management mistakes and poor businesspractices of the past. To provide greater assurance that correctiveaction has been taken, the agency should identify specific areas wheremistakes have been made and draft a formal set of policy guidelines toaddress each problem. The policies should then be submitted forboard approval. The following sections describe three examples.UTOPIA shouldformalize in writing theplans and policiesregarding a minimumlevel of interest neededfor building in newareas.Policy Action Is Needed to Avoid Additional UnderutilizedInvestments. Chapter II describes the financial challenges UTOPIAfaces, in part because of its many stranded and underused investments.UTOPIA staff have assured us they are taking steps to avoid creatingadditional underused investments. No longer will they build sectionsof network with the mere hope that subscribers will decide to use theservice. Instead, the agency states that in the future it will only build inlocations where a demonstrated customer demand justifies the cost ofconstruction. Specifically, staff report that 25 percent of addressesmust commit in writing to the service before they will authorizeconstruction.However, we have not yet observed any formal action todemonstrate that a new policy is in place or being followed. In fact, we- 44 -A Performance Audit of the Utah Telecommunication Open Infrastructure Agency (August 2012)