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JAN 1 .1984 gal C, 8 and stated they did refer to them as estimated or projected costs. Attorney Micale asked if Mr. Testone found something wrong with testimony given by the engineering witness presented by the Intervener re a balance sheet and income statement items. Mr. Testone noted that in the Hansen & Greeley report there was mention made about tax basis of accounting. There definitely is such a thing as tax basis of accounting, and it would be the obligation of the representing accountant to identify that basis. He pointed out that he mentioned earlier the basis that Hutchinson Utilities reports on and that they examined in 1982 was in accordance with generally accepted accounting principles, not regulatory or rate making purposes. So, tax basis was, in fact, incorrect. Also, there was mention made of insurance expense as a balance sheet expense. There is no such thing as a balance sheet expense; expenses are elements of an income statement. Intervener White noted that Mr. Testone said the figures in Schedule 2 were developed by management and reviewed by his firm for reasonableness. He then compared them to the 1982 figures for operations and maintenance. Mr. Testone believed that Mr. Olstein touched on that, noting that the breakdown of expenses on 1982 did not really fall under 0 & M and G & A; some items were included in the general & administrative category that should have been in operations and maintenance. This was not prepared for rate making purposes. Intervener White believed that Mr. Testone is not licensed as a CPA in Florida, and Mr. Testone stated that he is licensed in New York and has applied for a temporary permit for Florida which he has not yet received. Attorney Micale next called Louis Mendez, professional engineer, who was sworn in by Court Reporter Zambataro. 59