The Los Angeles Department of Water and Power (LADWP) has come under fire for failing to keep records on nearly $40 million of ratepayer funds spent by a pair of nonprofit trusts managed by the department and its labor union.

The LADWP’s Joint Training Institute and the Joint Safety Institute were established in 2000 and 2002, respectively. According to the Los Angeles Times, “the broad purpose of the organizations, city records show, has been to ‘identify’ safety and training as core values at the department, and to promote ‘communication, mutual trust and respect’ between DWP managers and the electrical workers’ union.”

Over the past several months, Mayor Eric Garcetti and Controller Ron Galperin have been demanding that the LADWP provide detailed information about the nonprofits over $40 million in expenditures over the past decade.

After two weeks of resisting an audit, LADWP’s governing Board of Water and Power Commissioners agreed on Wednesday, October 16 to allow the two nonprofits in question to hire an auditor of their choosing.

According to KPCC, this process already happens on an annual basis and the audit’s findings will not be made available to the public. Further, the JSI and JTI share the same trustees, accountant, address, phone number and tax exempt status.

“I urge IBEW to stop playing games,” Galperin said to KPCC. “IBEW should accept the call for a truly independent audit — such as one by the Controller’s Office, or one of the roughly two dozen firms we have vetted on our pre-approved list.”

The two nonprofit trusts have received over $40 million over the past 12 years in order to conduct a number of training and safety programs for LADWP workers. According to tax returns obtained by KPCC, the JTI and JSI are spending more than $3 million a year on salaries, travel and office expenses.

The two nonprofits will have a month to complete the audit.

Read more about the debacle at the Los Angeles Times.

The tax returns can be viewed at KPCC.