Meeting_Body
FINANCE, BUDGET & AUDIT COMMITTEE
SEPTEMBER 17, 2026
Subject
SUBJECT: AUDIT OF MISCELLANEOUS EXPENSES FOR THE PERIOD OF JULY 1, 2025 TO SEPTEMBER 30, 2025
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE Office of the Inspector General (OIG) Final Report on the Statutorily Mandated Audit of Miscellaneous Expenses for the Period of July 1, 2025, to September 30, 2025.
Issue
ISSUE
The Office of the Inspector General (OIG) performed an audit of Metro miscellaneous expense transactions processed from July 1, 2025, to September 30, 2025. This audit was performed pursuant to Public Utilities Code section 130051.28(b), which requires the OIG to report quarterly to the Board of Directors on the expenditures of the Los Angeles County Metropolitan Transportation Authority (Metro) for miscellaneous expenses such as travel, meals, refreshments, and membership fees.
Background
BACKGROUND
All Metro expenditures are categorized into various expense accounts and recorded in Metro’s Financial Information System (FIS). Metro employees have several options for seeking payment for miscellaneous expenses incurred, such as check requests, purchase cards, purchase orders, and travel & business expense reports. Each option has its own policies, procedures, or guidelines.
The Accounting Department’s Accounts Payable Section is responsible for the accurate and timely processing of payments for miscellaneous expenses.
This audit covered a review of Metro miscellaneous expenses for the period of July 1, 2025, to September 30, 2025. For this period, miscellaneous expenses totaled $4,549,821 with 536 transactions. We selected 50 expense transactions totaling $2,752,536 for testing.
This audit also covered a review of international travel expenses for the period of July 1 to September 30, 2025. We identified eight international travelers at a cost of $15,766.
Discussion
DISCUSSION
FINDINGS
The miscellaneous expenses we reviewed for the quarter of July 1, 2025, to September 30, 2025 generally complied with Metro policies and procedures, were reasonable, and were adequately supported by required documents. However, we noted the following issue:
• Clarification needed over mandatory fees associated with travel lodging
OBSERVATIONS
During our review of miscellaneous expenses for the period of July to September 2025, we observed the following:
• Missing receipt associated with a Travel and Business Expense Report (TBE).
• Eight persons traveled internationally at a cost of $15,766. Four employees attended the International Association of Public Transport (UITP) Conference in Hamburg, Germany. One employee attended HR5000 Carshell supplier pre-inspection visits at various supplier facilities in Seoul and Changwon, Korea. Another employee attended the 2025 Women’s Transportation Seminar (WTS) International Annual Conference in Toronto, Canada. One employee attended the Smart Cities & Mobility Trade Mission In Helsinki, Finland and surrounding cities. The last employee traveled to Milan, Italy to study the city’s preparations for the 2026 Winter Olympics.
RECOMMENDATIONS
We recommend the following:
Chief People Office ( Administration Support & Workforce Data)
• Include a statement in the Metro Business Travel Guidelines (GEN 65) which states that mandatory fees associated with lodging e.g. resort fees are reimbursable miscellaneous travel expenses and are not included in the lodging dollar limit that can be claimed for lodging.
• Instruct employees to be familiar with Metro’s Business Travel Guidelines and submit a justification memo for lodging expenses when they exceed the allowable GSA rates.
Equity_Platform
EQUITY PLATFORM
It is OIG’s opinion that there are no equity considerations or impacts resulting from this audit.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
While this item does not directly encourage taking transit, sharing a ride, or using active transportation, it is a vital part of Metro operations, as it contributes to fiscal responsibility and reports on miscellaneous expenditures of the Los Angeles County Metropolitan Transportation Authority (Metro). The Metro Board has adopted an agency-wide VMT Reduction Target, and this item supports the overall function of the agency and is consistent with the goals of reducing VMT.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Recommendations support strategic plan goal no. 5.2: Metro will exercise good public policy judgment and sound fiscal stewardship.
Next_Steps
NEXT STEPS
Metro management will implement corrective action plans.
Attachments
ATTACHMENT
Attachment A - Final Report on Statutorily Mandated Audit of Miscellaneous Expenses for the Period July 1, 2025 to September 30, 2025 (Report No. 26-AUD-08)
Prepared_by
Prepared by: Dennis Young, Auditor, (213) 244-7326
Yvonne Zheng, Senior Manager, Audit, (213) 244-7301
George Maycott, Senior Director, Special Projects, (213) 244-7310
Reviewed_By
Reviewed by: Karen Gorman, Inspector General, (213) 922-2975
