$2 million in gas fines missed

Audit finds officials assessed $4,000, though public was at risk more than once.

lbonner@newsobserver.comDecember 30, 2011 

The state Agriculture Department failed to fine propane plants, dispensing sites and other facilities that mishandled the highly flammable gas, putting the public at risk and costing public schools about $2 million, according to a state audit.

The department could have levied fines of more than $2.5 million, according to the audit released Thursday, but collected only $4,000. Some of the 7,466 violations represented potential threats to public safety, the audit said. The audit covers violations and fines collected from Oct. 1, 2009 through Sept. 30, 2010.

Nearly 10 percent of the problems were repeat violations, where inspectors found the same deficiencies more than once at the same site. "The Department's expectation of voluntary compliance with respect to repairs or corrective action has been ineffective," the audit said. "Thus, the threat to public health and safety continues and directly conflicts with the Department's mission to 'protect consumers.' "

The public schools lost out on about $2 million, the audit said, because at least 80 percent of the fines collected would have been distributed to local districts.

In the department's written response, state Agriculture Commissioner Steve Troxler said it started setting up a database in October 2009 to track violations and to set up a penalty system, but that work was harder than expected. Since the database for plant inspections started working on Sept. 1, seven penalties were issued, Troxler wrote. "We anticipate the pace to accelerate as follow-up inspections are performed," he wrote.

The audit assumed maximum fines for violations, which Troxler appeared to indicate was unlikely. He referred to a section of the law that gives him discretion over penalties. Auditors wrote that the director of the division responsible for inspections and fines said the department is more interested in convincing companies to comply with rules than in penalizing them.

A spokeswoman at the Agriculture Department said no one was available to respond to the audit. Troxler's written response will speak for itself, she said.

'No complicated stuff'

It is unclear how the department's tracking and penalty database differs from the information state auditors were able to compile.

Auditors took a few weeks to develop a spreadsheet using Agriculture Department records. Said Dennis Patterson, spokesman for the state Auditor's Office: "There was no complicated stuff."

The state Department of Agriculture and Consumer Services is responsible for inspecting plants, delivery trucks, storage facilities, and homes and businesses that handle liquefied petroleum gas, or propane.

According to the audit, agriculture inspectors found facilities with leaky tanks and pipes, evidence of smoking in delivery trucks, a lack of "No Smoking" signs on fences around bulk plants, broken emergency shut-off valves and other hazards. The auditors' investigation found at least two companies with hundreds of violations. For example, one company had 352 violations, some of them problems cited repeatedly over multiple inspections.

Two facilities that were part of a test of the new database were fined a total of $7,100, but only $4,000 was collected because one of the facilities got the charge cut in half, from $6,200 to $3,100.

In 2009, the legislature revised the laws under which a department levies fines. Troxler wrote that the department requested the changes to make it easier to sanction violators.

Troxler, a Republican, is popular with members of both parties. Legislators, while expressing their admiration for him, said they hoped his department starts doing more to deter dangerous practices.

"The wheels of government often move very slowly," and it appears the department is aware of needed changes, said Rep. David Lewis, Harnett County Republican and a vice chairman of the House Agriculture Committee.

"I think that this is an example of state government working appropriately, with the auditor discovering an issue for an agency to address and the agency pledging to address the issue," he said.

State rep expresses ire

State Rep. Phil Haire, a Sylva Democrat and a member of the House Agriculture Committee, said that despite the sentiment spreading through the state and nation that regulations aren't needed, rules are written to keep people safe. Enforcing them is important, he said.

"What happens when somebody gets killed?" he asked. "Everybody knows that LP gas is dangerous."

Bonner: 919-829-4821

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