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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Public Service Commission
Pipeline Safety Oversight (Follow-Up)


Issued: December 27, 2017
Link to full audit report 2017-F-20
Link to 30-Day Response

Purpose
To determine the extent of implementation of the three recommendations included in our initial audit report, Pipeline Safety Oversight (2015-S-31).

Background
New York State’s pipelines transmit, gather, and distribute gas and other hazardous liquids (crude oil, refined petroleum products, and other highly volatile, flammable, or toxic liquids) . According to Pipeline and Hazardous Materials Safety Administration (PHMSA) records, between 1997 and 2016, New York had 207 pipeline incidents resulting in 24 fatalities, 109 injuries, and $80 million in property damage. The Public Service Commission (PSC) operates a federally certified safety program for intrastate and interstate pipelines. Department of Public Service (DPS) staff, who report to PSC, conduct investigations of accidents and performs Operator inspections, which typically include a review of operations, maintenance, and construction. Operators include any entity that engages in the transportation of gas.

Our initial audit report, which was issued on March 8, 2016 covering the period April 1, 2013 through October 21, 2015, determined whether PSC was providing oversight of pipeline safety in accordance with State regulations and federal performance standards.  We found DPS staff did not verify the accuracy of the information on employee/contractor qualifications maintained by individual Operators which DPS staff rely on during field audits. In addition, DPS had not set up a process to identify instances where Operators failed to notify them of specific gas-related incidents as required. We determined that Operators did not notify DPS of six such incidents in 2015 that should otherwise have been reported. These incidents involved evacuations, road closures, a business closure, and other situations that left businesses and residents without gas. Finally, DPS did not perform analyses of all available data to better identify potential high-risk areas.

Key Finding
DPS officials have made significant progress in addressing the issues we identified in the initial audit. Of the three prior audit recommendations, two recommendations have been implemented and one has been partially implemented.

Key Recommendation
Officials are given 30 days after the issuance of the follow-up review to provide information on any actions that are planned to address the unresolved issues discussed in this review. 

Other Related Audit/Report of Interest
Public Service Commission: Pipeline Safety Oversight (2015-S-31)


State Government Accountability Contact Information:
Audit Director: Brian Reilly
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236