A Water Authority delegate to MWD’s board of directors is pressing MWD for answers about its interest swap program that reportedly squandered tens of millions in ratepayer money and could lose even more.
MWD has paid nearly $88 million to get out of a series of “risky” financial ventures, and the agency still has a liability of $71.5 million related to those deals, according to an Aug. 4 investigation by the Voice of San Diego. It says those payouts and the remaining liability “show Metropolitan got the raw end of the deals and lost.”
Michael Hogan, who represents the Water Authority on MWD’s board, sent a letter to MWD’s general auditor on Aug. 10 seeking more information about the agency’s failed swap program. Specifically, he asked whether recommendations for improving the swap program in 2012 have been implemented and whether MWD has completed an internal audit of the program that has been referenced in audit program updates over the past two years. Hogan also asked whether MWD is currently in compliance with the relevant standard set by the Government Accounting Standards Board. Click here to read Hogan’s letter.
The Water Authority previously raised questions about MWD’s swap program in 2013, when MWD disclosed that it would be paying $20 million in termination penalties. Click here to read the Water Authority’s letter from Feb. 11, 2013. Click here to read MWD’s response.