Auditors hired by Los Angeles City Controller Ron Galperin will begin reviewing financial records of two Department of Water and Power employee training and safety trusts today in an effort to determine if more than $40 million given to the trusts over the past dozen years was properly spent.
Auditors from the accounting firm Crowe Horwath will scrutinize records kept in trailers in Sun Valley by the Joint Training Institute and the Joint Safety Institute, Galperin spokesman Lowell Goodman said. Employees and officials of the trusts will also be interviewed, he said.
The DWP’s annual $4 million payment to the trusts was put on hold for 120 days, starting Nov. 19, while Galperin conducts his audit and interviews trust officials, according to Goodman.
If Galperin spots any illegal activity in the records or if the trusts refuse to produce the documents, the $4 million payment could be withheld.
The Los Angeles City Council approved a deal with DWP union chief Brian D’Arcy last month that includes releasing an annual $4 million payment to the two trusts in exchange for access to half a decade of financial records.
D’Arcy, who heads the International Brotherhood of Electrical Workers, Local 18, had refused to allow financial documents from the trusts — formed more than a decade ago to address DWP worker safety and training issues — to be audited by Galperin.
D’Arcy contended that Galperin did not have the legal right to subpoena records from the organizations, which D’Arcy said were independent from the city.
Galperin, in turn, refused to release the DWP’s annual $4 million payment to the trusts. The payments are part of a collective bargaining agreement with the DWP employee union.
