Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
OCTOBER 24, 2024
Subject
SUBJECT: AUDIT OF LICENSES AND CERTIFICATIONS FOR METRO EMPLOYEES, CONSULTANTS, CONTRACTORS, AND SUBCONTRACTORS (REPORT NO. 25-AUD-02)
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE Office of the Inspector General (OIG) Final Report on the Audit of Licenses and Certifications for Metro Employees, Consultants, Contractors, and Subcontractors.
Issue
ISSUE
The Office of the Inspector General (OIG) performed an audit of licenses and certifications of Metro employees in Risk Management and Corporate Safety, as well as Metro consultants, contractors, and subcontractors. This audit was performed to evaluate the adequacy of Metro controls over the verification of their required licenses to ensure that they are qualified to perform their work.
While this board report is presented to the Finance, Budget, and Audit Committee, other Metro departments such as Program Management, Safety, and Construction might find this report useful.
Background
BACKGROUND
Obtaining, maintaining monitoring, and verifying professional licenses and certification spans across several Metro departments.
The Chief Safety Office includes the Risk Management and Corporate Safety Departments. Risk Management’s mission is to protect the assets of the public “by identifying, evaluating, and responding to the risk exposures of Metro.” Corporate Safety provides leadership in continuous safety improvement for Metro employees, customers, community, and business partners.
Program Management oversees the construction of major capital projects. Its primary focus is to deliver capital projects safely, on time, and within budget while mitigating stakeholder issues.
Vendor/Contract Management includes Procurement and Diversity and Economic Opportunity Department (DEOD). The Procurement business unit comprises Professional Services and Construction Services. These teams plan acquisitions, prepare solicitations, author contract documents, negotiate terms and conditions, execute contract awards, and provide post-administration of all contracts executed across Metro. DEOD, on the other hand, is responsible for ensuring non-discrimination in Metro contracting and workforce employment. DEOD responsibilities include implementation and oversight of Certification, Labor Compliance, Outreach, Project and Economic Development Management, and Small Business Programs.
This audit covered a review of licenses and certifications of Metro employees in Risk Management and Corporate Safety, as well as Metro’s consultants, contractors, subcontractors, and their key personnel for its capital projects as of December 31, 2023. We selected four contracts from three major capital projects.
Discussion
DISCUSSION
FINDINGS
The audit found the following:
• The employees in Metro’s Risk Management and Corporate Safety departments, as well as their consultants who are required to have licenses and certifications, are in compliance. However, most of the job positions in these departments do not require a license or certification but do include preferred licenses or certifications. Metro can encourage the employees to obtain the preferred licenses for their respective positions, contributing to an industry-recognized level of competency and professionalism that may strengthen their job performance with added knowledge in their respective fields.
• Although Metro contractors and subcontractors under our review have the licenses required by the contracts, Metro can improve its procedures by monitoring the licenses of the contractors and subcontractors on a regular basis. Developing guidance and procedures to aid Metro project managers in the review of licenses and certifications will be helpful.
• Except for one contract we reviewed, there is no provision requiring that Metro verify the professional licenses of the contractor’s and subcontractors’ key personnel after the contract is awarded. Contracts for major Metro construction projects should be enhanced by including the requirement of verification of professional licenses of the contractor’s and subcontractors’ key personnel on a regular basis (e.g. once or twice a year) after the contract is awarded.
RECOMMENDATIONS
We recommend the following:
Risk Management and Corporate Safety
1. Encourage their employees to obtain the preferred licenses for their respective positions, contributing to an industry-recognized level of competency and professionalism that may strengthen their job performance with added knowledge in their respective fields.
2. Review the department’s job description and qualifications, and determine if the preferred licenses and certifications are tied to the employee’s duties and should now be required since the last job description review and update.
Human Capital & Development:
3. Survey specific positions that are recommended by Risk Management and Corporate Safety, and compare the qualifications with those of other transportation agencies to ensure that Metro hires candidates with the appropriate knowledge, skills, abilities, and professional licenses.
4. Consider designing/adding a field in the HR training system for employees to input their certifications and licenses.
5. Consider maintaining a central repository of employees whose position requires a license and certification so it may be easily reviewed for compliance with their position’s requirements.
Program Management
6. Develop guidance and procedures to aid Metro project teams in the review of license and certification requirements for the contractor, subcontractors, and their key personnel for the duration of the contract.
Licenses of Contractors/Subcontractors
7. Require the contractor to submit their license(s) and registration annually and a list of the licenses of the subcontracting firms to ensure that they possess and maintain their licenses throughout the duration of the work. Compare their list with Metro’s B2GNOW system.
8. Require the contractor to show they will monitor, verify, and communicate to Metro their subcontractors and their respective required licenses.
9. Consider implementing a systematic program to annually review contractor and subcontractor licenses, registrations, and certifications, as required by the contract.
Licenses of Key Personnel and Professional Staff - For Contracts with Provision on Licenses of Key Personnel
10. Require the contractor and subcontracting firms to submit an updated list of their key personnel with their corresponding license numbers and expiration dates for the duration of the contract work.
11. Verify and monitor the validity of the California professional license of these key personnel annually.
12. Monitor and verify bills submitted by the prime contractor for the services provided by personnel approved by Metro.
Licenses of Key Personnel and Professional Staff - For Contracts without Provision on Licenses of Key Personnel
13. Enhance the contract language by adding a contract provision requiring the prime contractor to submit a list and proof of licenses, license numbers and expiration dates of their key personnel, and those of the subcontracting firms for the duration of the contract work.
14. Coordinate with the Legal Department and Vendor/Contract Management about enhancing this contract provision in all future capital projects.
15. If the above contract provision is added, verify and monitor the validity of the California professional license of these key personnel annually.
Vendor/Contract Management
16. Consider maintaining a list or file of the Request to Add Subcontractor forms and update it to include Program Management as one of the recipients of the completed form upon approval so they will have information on the subcontractors for their respective projects.
Equity_Platform
EQUITY PLATFORM
It is the OIG’s opinion that there are no equity considerations or impacts resulting from this audit.
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
ATTACHMENTS
Attachment A - Final Report on the Audit of Licenses and Certifications for Metro Employees, Consultants, Contractors, and Subcontractors (Report No. 25-AUD-02)
Prepared_by
Prepared by: Asuncion Dimaculangan, Senior Auditor, (213) 244-7311
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