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DWP board requests audit of union-linked nonprofits

William Funderburk, Mel Levine, Michael Fleming and Jill Banks Barad are four of the five Board of Water and Power Commissioners.
William Funderburk, Mel Levine, Michael Fleming and Jill Banks Barad are four of the five Board of Water and Power Commissioners.
Alice Walton/KPCC

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The L.A. Department of Water and Power is ratcheting up scrutiny of two nonprofits that have received more than $41 million in ratepayer funds since 2000.

The money has been given at the rate of more than $3 million a year to the Joint Safety Institute and the Joint Training Institute. The groups are jointly run by trustees from DWP and its employee union, the International Brotherhood of Electrical Workers Local 18.

About a month ago, the union said it would conduct a review of spending by the groups. DWP commissioners had been poised to ask for an official city audit, but agreed to forestall the inquiry pending the outcome of the union review.

At Tuesday's meeting of DWP commissioners, no representative of the union was present. DWP General Manager Ron Nichols, who acts as a trustee for the nonprofits, said the groups would likely have some information for the board by next month.

But DWP Commission President Mel Levine said he was tired of waiting.

"We are two months after the first disclosure to the public, and two meetings and more than a month after our motion and we have received nothing," Levine said.

So the five-member DWP board voted unanimously to have City Controller Ron Galperin conduct an audit of the groups and disclose how they've spent the money they've received since they were formed.

The DWP board also voted to suspend payments to the organizations until they provide that information.

Galperin said in a phone interview that while he had the authority to audit the organizations without a request from the board,  he was pleased they had requested it.

He had already done some of the preparatory work needed for an audit of the two nonprofits and was ready to dig into detailed examinations as soon as they provided files, check registers, contracts and other documents.

Nichols and a few other DWP managers act as trustees on the boards of the two nonprofits but Galperin said they had not provided him with any files about their operations.

"The DWP has said they don't have them," Galperin said. "What this points to me is the need for greater vigilance."

He said he additionally expects to soon conduct a broader audit of DWP operations, a standard task the controller's office does to periodically check on finances.

A spokesperson for the DWP employee union did not return calls for comment.