AUDITING OF DWP ORDERED CONTROLLER CHICK HIRES OUTSIDE FIRM TO CHECK.

Byline: Beth Barrett Staff Writer

City Controller Laura Chick announced Wednesday that she will expand her review of the Department of Water and Power by hiring an outside firm to audit its $60 million public benefits program, which provides subsidies for low-income ratepayers and funds the agency's conservation efforts.

Chick said the audit was prompted by concern over ``a pattern of spending and invoices,'' including some that came out of the public benefits program like a $27,000 party at the Music Center to promote ``green power' and a catered press conference.

Six weeks ago, Chick refused to pay $600,000 in bills for DWP sponsorships, galas, parties and other events, referring them to the City Council. She made her announcement of the expanded review at a long-delayed council committee hearing on the questioned expense.

DWP officials have responded to her initial complaint by developing policies for distributing about $2 million per year in sponsorships.

The Audits and Governmental Efficiency Committee agreed at the meeting to let the full council decide on the challenged bills as well as the new sponsorship policy. The DWP already has paid the $600,000 in bills but needs council approval for the city to reimburse for the bills.

``I'm very pleased with the attention and involvement of the City Council. It's an important piece that's been missing up until today,'' Chick said.

DWP General Manager David Wiggs said the agency already has an ongoing internal audit of the public benefits program but added he welcomes the additional outside review. The DWP has agreed to pay the estimated $130,000 for the audit.

Wiggs said the internal review of the public benefits program was prompted by the program's size, and is another step in evaluating how efficiently the DWP is spending its money. Wiggs said the DWP has ``absolutely nothing to hide,'' adding that a review is under way of all facets of the DWP, as part of the budget process and the need to hire up to 400 new workers.

The public benefits program was mandated by state deregulation legislation passed about four years ago to make sure low-income ratepayers weren't hurt and that conservation programs weren't neglected, he said. He defended the sponsorship program as part of a long tradition of community activism by the DWP, saying the cost of the sponsorships is a small fraction of the agency's budget.

Wiggs agreed the new policies on sponsorships were needed, but he told the committee the department's managers will continue to exercise discretion on whether events fall under the guidelines. ``It's not black and white,'' Wiggs said.

Committee Chairman Councilman Tom LaBonge defended the agency playing a major civic role.

``There are no corporations left in Los Angeles as there were, but one of them is DWP,'' LaBonge said. LaBonge previously worked for the DWP public relations operation and in that role authorized one of the expenditures challenged by Chick. It was a $2,498 expenditure for L.A.'s 219th birthday celebration.

Recipients of DWP past sponsorships encouraged the city to continue the contributions to civic causes.

Blythe Cotton, director of communications for Para Los Ninos in Los Angeles, said over the past decade the DWP's contributions of some $40,000 have made a significant difference to the nonprofit, especially as other government funding has declined.

Bruce D. Ackerman, president and chief executive officer of the Economic Alliance of the San Fernando Valley, said the DWP has contributed up to $90,000 a year to the organization, which seeks to spur business growth in the Valley.

``The DWP is one of the strongest natural partners we have,'' Ackerman said. ``The first thing people (in business) ask is what the utility rates are.''