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Title:
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RECEIVE AND FILE the Independent Auditor's Report on:
A. Schedule of Revenues and Expenditures for Measure R Special Revenue Fund for the Fiscal Year ended June 30, 2024 (Attachment A) completed by BCA Watson Rice, LLP (BCA);
B. Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines for the Fiscal Year ended June 30, 2024 (Attachment B) completed by Vasquez & Company, LLP (Vasquez); and
C. Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines for the Fiscal Year ended June 30, 2024 (Attachment C) completed by Simpson and Simpson, LLP (Simpson).
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Indexes:
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Audit, Evaluation and assessment, Financial Audit, Formula Allocation / Local Return, Guidelines, Informational Report, Local Returns, Schedules and scheduling
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Meeting_Body
MEASURE R INDEPENDENT TAXPAYERS OVERSIGHT COMMITTEE
MARCH 5, 2025
Subject
SUBJECT: MEASURE R AUDITS OF FISCAL YEAR 2024
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE the Independent Auditor's Report on:
A. Schedule of Revenues and Expenditures for Measure R Special Revenue Fund for the Fiscal Year ended June 30, 2024 (Attachment A) completed by BCA Watson Rice, LLP (BCA);
B. Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines for the Fiscal Year ended June 30, 2024 (Attachment B) completed by Vasquez & Company, LLP (Vasquez); and
C. Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines for the Fiscal Year ended June 30, 2024 (Attachment C) completed by Simpson and Simpson, LLP (Simpson).
Issue
ISSUE
The oversight process requires that an annual audit be conducted six months after the end of the fiscal year to determine compliance with the provisions of the Ordinance related to the receipt and expenditure of sales tax revenues during the fiscal year. The audit must be provided to the Measure R Independent Taxpayers Oversight Committee (Committee) so that the Committee can determine whether the Los Angeles County Metropolitan Transportation Authority (LACMTA) and local subrecipients have complied with the Measure R requirements.
Background
BACKGROUND
On November 4, 2008, Los Angeles County voters approved Measure R, which imposed a half-cent transaction and use tax to fund transportation improvements in the County. Measure R, also known as the Traffic Relief and Rail Expansion Ordinance, establishes an Independent Taxpayers Oversight Committee and an oversight process to ensure that LACMTA complies with the terms of the Ordinance.
Discussion
DISCUSSION
The following summarizes the independent auditor's reports on the Schedule of Revenues and Expenditures for Measure R Special Revenue Fund:
Management Audit Services (MAS) contracted with BCA to perform the independent audit of the LACMTA, as required by the Ordinance. BCA conducted the audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that BCA plan and perform the audit to obtain reasonable assurance about whether the Schedule of Measure R Revenues and Expenditures (Schedule) is free of material misstatement.
The auditors found that the Schedule referred to above presents fairly, in all material respects, the Measure R Revenues and Expenditures of LACMTA for the fiscal year ended June 30, 2024, in accordance with accounting principles generally accepted in the United States of America. The auditors also found that LACMTA complied, in all material respects, with the requirements of the Ordinance for the fiscal year ended June 30, 2024.
The following summarizes the independent auditor's reports on Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines:
MAS contracted with two firms, Vasquez and Simpson, to conduct the audits of Measure R sales tax revenues used by the County of Los Angeles (County) as well as the 88 cities (Cities). The firms conducted the audit of compliance in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that the independent auditors plan and perform the audit to obtain reasonable assurance about whether noncompliance with the requirements in the Ordinance, which could have a direct and material effect on the Measure R Local Return program, occurred.
Vasquez concluded that the County and the Cities complied in all material respects with the requirements in the Ordinance and the Measure R Local Return Guidelines applicable to the Measure R Local Return program for the fiscal year ended June 30, 2024. Vasquez found six (6) instances of noncompliance, summarized in Schedule 2 of Attachment B.
Simpson concluded that the 49 Cities complied in all material respects with the requirements in the Ordinance and the Measure R Local Return Guidelines applicable to the Measure R Local Return program for the fiscal year ended June 30, 2024. Simpson found four (4) instances of noncompliance, summarized in Schedule 2 of Attachment C.
Equity_Platform
EQUITY PLATFORM
The Measure R Independent Auditor Reports summarized in this report support compliance with the applicable ordinance and guidelines, as well as assist program managers in effectively managing and administering the Measure R-funded programs that serve all communities throughout the County. There are no known equity impacts or concerns from audit services conducted to complete the annual audits.
Next_Steps
NEXT STEPS
As required by the Ordinance, the Committee will prepare an annual report detailing the results of the annual audit process and any findings. In addition, a public hearing will be scheduled to receive public input.
Attachments
ATTACHMENT(S)
A. Independent Auditor's Report on Schedule of Revenues and Expenditures for Measure R Special Revenue Fund (FY24)
B. Report on Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines (Vasquez FY24)
C. Report on Compliance with Requirements Applicable to Measure R Ordinance and Measure R Local Return Guidelines (Simpson FY24)
Prepared_by
Prepared by: Kimberly Houston, Deputy Chief Auditor, (213) 922-4720
Lauren Choi, Senior Director, Audit, (213) 922-3926
Monica Del Toro, Senior Manager, Audit, (213) 922-7494
Reviewed_by
Reviewed by: Sharon Gookin, Deputy Chief Executive Officer, (213) 418-3101
Measure R Independent Auditor's Report Page 2