Meeting_Body
MEASURE M INDEPENDENT TAXPAYER OVERSIGHT COMMITTEE
SEPTEMBER 10, 2025
Subject
SUBJECT: CONSOLIDATED AUDIT FOR FISCAL YEARS 2026-2030
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
APPROVE:
A. the Scope of Services (Attachment A) for the upcoming solicitation of qualified firms to provide consolidated financial and compliance audit services for fiscal years 2026-2030, which include the required audits of Measure M funds; and
B. the Evaluation Criteria (Attachment B) for the selection of qualified firms.
Issue
ISSUE
The Measure M Ordinance requires that Metro contract for an annual audit, to be completed within six months after the end of the fiscal year being audited, for the purpose of determining compliance with the provisions of the Measure M Ordinance relating to the receipt and expenditure of Sales Tax Revenues during such fiscal year. In addition, the annual audit should include a determination of whether recipients of Net Revenues allocated from these Subfunds have complied with the Measure M Ordinance and any additional guidelines developed for these Subfunds.
The Measure M Ordinance also requires the Measure M Independent Taxpayer Oversight Committee (MMITOC) approve the scope of services for the auditors of Measure M funds and to be involved in the solicitation and selection process of the auditors. To fulfill these requirements, Metro staff are requesting approval of the Scope of Services (Attachment A) and Evaluation Criteria (Attachment B) that will be included in the Request for Proposals (RFP) solicitation. The scope of services may be revised to clarify audit requirements consistent with the objectives and purpose of the Measure M Ordinance.
The solicitation and procurement process will follow Metro’s Acquisition Policy for competitively negotiated procurements.
Background
BACKGROUND
The Los Angeles County Metropolitan Transportation Authority (Metro), as the Regional Transportation Planner for Los Angeles County, is responsible for planning, programming, and allocating transportation funding to Los Angeles County jurisdictions, transit operators, and other transportation programs. Metro has a fiduciary responsibility to help ensure that jurisdictions, operators, and program administrators receiving funds for transportation-related projects are in compliance with applicable statutes, rules, regulations, policies, guidelines, and Memoranda of Understanding (MOU) agreements.
The MMITOC approved the scope of services for Metro’s current Consolidated Audit services contracts with the current CPA firms, Simpson and Simpson and Vasquez and Company, in October 2020. These contracts will end in June 2026 after the completion of the fiscal year 2025 audits. Through this procurement, Metro will solicit the services of up to two external, independent Certified Public Accountant (CPA) firms to perform the financial and compliance audits of the various programs included in the Consolidated Audit for fiscal years 2026-2030.
Discussion
DISCUSSION
Metro consolidates audit services for multiple programs to improve cost and schedule efficiency, since a number of the same Measure M Ordinance recipients also receive subsidies from other transportation-related programs that have compliance requirements and deadlines similar to those required by the Measure M Ordinance.
Therefore, in addition to the audit of Measure M expenditures, the scope of services (Attachment A) for this solicitation also includes the financial and compliance audits of other transportation-related funding programs listed below:
1. Local Funding Program to the 88 cities and Unincorporated Los Angeles County.
a) Proposition A Local Return
b) Proposition C Local Return
c) Measure R Local Return
d) Measure M Local Return
e) Transit Development Act (TDA) Article 3
f) Transit Development Act (TDA) Article 8
g) Proposition A Discretionary Incentive Program
2. Transit System Funds to Commerce, Redondo Beach, and Torrance
a) Transit Development Act (TDA) Article 4
b) State Transit Assistance (STA)
c) Proposition A 95% of 40% Discretionary
d) Proposition C 5% Security
e) Proposition C 40% Discretionary
f) Measure R 20% Bus Operations
g) Measure M 20% Transit Operations
3. Proposition A 40% Discretionary – Growth Over Inflation (GOI) Funds to the transit system operators of LADOT, Glendale, Pasadena, and Burbank
4. Low Income Fare is Easy (LIFE)
5. SCRRA Metrolink Program, including Measure M 2% funds
6. Access Services, including Measure M 1% funds
7. EZ Transit Pass Program
8. LADOT Operating Data (Proposition A Incentive Programs)
9. SB125 Zero Emission Transit Capital Program (ZETCP)
In compliance with the requirement to involve the Committee in the process for subsequent solicitation and selection of the auditors, Metro staff are also providing the evaluation criteria (Attachment B) which will be used for this procurement. The evaluation criteria sets the standard for assessing the quality and suitability of proposals submitted by interested firms. This criteria serves as a vital framework in promoting fairness and transparency in the selection process and is consistent with the criteria used during the previous procurements for these services.
Following receipt of proposals, Metro will perform an initial responsiveness review to determine compliance with the following minimum qualification requirements on a pass/fail basis:
1. Prime Contractor must be a Certified Public Accountant (CPA) firm licensed to provide accounting, financial, and auditing services in the State of California; and
2. Prime Contractor must have a satisfactory Peer Review within the last three (3) years showing compliance with Generally Accepted Government Auditing Standards (GAGAS).
Firms that meet the above-listed minimum qualification requirements will be evaluated further based on four key weighted categories:
1. Qualifications of the Prime Contractor/Team 20%
2. Qualifications of the Proposed Key Personnel 20%
3. Understanding and Approach to the Scope of Services 30%
4. Price 30%
Several factors were considered in developing these weights, with the greatest importance given to understanding and approach in completing the scope of services and pricing.
Equity_Platform
EQUITY PLATFORM
The audits included within the Consolidated Audit program ensure accountability to taxpayers for the use of funds allocated throughout Los Angeles County. There is no SBE or DBE set-aside requirement for this RFP. There is no specific equity benefit or impact anticipated from this action.
Next_Steps
NEXT STEPS
Upon MMITOC’s approval, staff will release the RFP and subsequently bring a recommendation for award to the Metro Board for approval. Additionally, as required by the Measure M Ordinance, the selected CPA firms will continue to present the results of their annual audits to the MMITOC.
Attachments
ATTACHMENTS
Attachment A – Scope of Services for Consolidated Audit Services (FY2026 through FY2030)
Attachment B – Evaluation Criteria for Consolidated Audit Services (FY2026 through FY2030)
Prepared_by
Prepared by: Monica Del Toro, Senior Manager, Audit, (213) 922-7494
Lauren Choi, Senior Director, Audit, (213) 922-3926
Kimberly Houston, Deputy Chief Auditor, (213) 922-4720
Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer, (213) 922-4471
Reviewed_By
Reviewed by: Sharon Gookin, Deputy Chief Executive Officer, (213) 418-3101