On Thursday, L.A. City Controller Ron Galperin issued a long-awaited audit of two training institutes at the Department of Water and Power. The audit followed 18 months of wrangling with Brian D'Arcy, the head of the union that represents DWP employees, who had fought bitterly to withhold the records of the two institutes, which are jointly run by the union and the DWP.
Now that they're finally out, you can see why he wanted them kept secret. Galperin's auditors found lax controls over travel expenses, contracting and credit card purchases. Auditors could not find a receipt for a $1,353.88 expenditure at Prime Steakhouse in 2011. The auditors also took issue with a two-day “Safety Summit” at the Embassy Suites Mandalay Beach Resort in Oxnard, which cost $25,000. The list goes on.
But it's hard to tell whether this will lead to serious changes, because the DWP doesn't appear to agree with the findings. Marcie Edwards, who is Mayor Eric Garcetti's appointee to run the utility, has already rallied to D'Arcy's defense.
In a letter to Galperin appended to the end of the report, Edwards and D'Arcy jointly rebuke the audit as “littered with accusatory innuendo and peppered with contradictory statements.”
“Your auditors seem more intent on casting aspersions on the management of the trusts and conjuring up baseless accusations about nonexistent malfeasance than they are with getting their facts right,” Edwards and D'Arcy write.
They also note that the audit did not uncover any violations of laws or regulations, and argue that most of the criticisms boil down to “an alleged 'failure' to document each and every discussion, decision and action of the trusts' small staff and eight volunteer fiduciaries.”
“While such extensive and burdensome documentation may be appropriate for larger and more complicated organizations, it is neither necessary nor appropriate in small organizations such as these trusts,” they write.
Edwards and D'Arcy were much more receptive to another report on the institutes, issued Thursday by the City Administrator's Office. That report was much milder in its tone and findings. It recommended that the institutes be consolidated into one entity and that certain policies regarding governance and expenditures be clarified and formalized. But it also found that the institutes are performing the training functions they were established to perform.
In their response to that report, Edwards and D'Arcy wrote that they appreciated the CAO's input and agreed with the recommendations. Since Edwards and D'Arcy control the institutes more or less autonomously, their response is what matters.
Garcetti is Edwards' boss, and in theory he could direct her to implement Galperin's recommendations. But in his own statement, Garcetti did not indicate any intention to do that. He did thank Galperin for his work making the institutes more transparent, and left it at that.
In a separate statement, Edwards and DWP Commission president Mel Levine said that Galperin's recommendations would be considered at the commission. Levine and Edwards also pledged to implement the CAO's and controller's recommendations “as appropriate.”
But from the response she has already given to the controller's audit — in which she sides with D'Arcy against Galperin — it seems most likely that Galperin's report will end up on the shelf.