Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
APRIL 19, 2023
Subject
SUBJECT: BASIC FINANCIAL STATEMENTS AND COMPONENT AUDITS
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE the Los Angeles County Metropolitan Transportation Authority’s (Metro) basic financial statements and component financial statement audits completed by Crowe LLP (Crowe) as of and for the fiscal year ended June 30, 2022.
Issue
ISSUE
Metro is required to be audited annually by independent certified public accountants. The resulting reports include Metro’s basic financial statements and the following component audits for the fiscal year ended June 30, 2022 (FY22):
Ø Annual Comprehensive Financial Report for the Los Angeles County Metropolitan Transportation Authority;
Ø Independent Auditor’s SAS 114 letter covering required communications related to the financial statement audit;
Ø Single Audit Report;
Ø Independent Accountant’s Report on Applying Agreed-Upon Procedures on Federal Funding Allocation Data for the Transportation Operating Agency (ID# 90154);
Ø Independent Auditor’s Report on Compliance with the California Code of Regulations (Section 6667); Report on Internal Control over Compliance; and Report on 50% Expenditure Limitation Schedule for Transportation Development Act Operations Agency;
Ø Independent Auditor’s Report on Compliance with the California Code of Regulations (Sections 6640-6662); Report on Internal Control over Compliance; and Report on Schedule of Revenues, Expenditures, and Changes in Fund Balances for Transportation Development Act;
Ø Independent Auditor’s Report on the Los Angeles County Metropolitan Transportation Authority State Transit Assistance Special Revenue Fund’s basic financial statements for the fiscal years ended June 30, 2022, and 2021.
Ø Independent Auditor’s Report on the Service Authority for Freeway Emergencies (A Component Unit of the Los Angeles County Metropolitan Transportation Authority) financial statements; and
Ø Independent Auditor’s Report on Compliance with Rules and Regulations of the Low Carbon Transit Operations Program (LCTOP) and Report on Internal Control over Compliance for the Los Angeles County Metropolitan Transportation Authority’s compliance with the LCTOP Guidelines.
Discussion
DISCUSSION
Metro’s basic financial statements include its audited financial statements, supplemental information, and unmodified audit opinion from the independent external auditor. The independent auditor issued unmodified opinions on all audit reports for FY22. Receiving an unmodified opinion indicates that all financial statements for FY22 were fairly presented and that Metro complied in all material respects with the applicable financial reporting framework and compliance requirements. Crowe identified two findings in the Single Audit Report related to internal controls over procurements and compliance with federal wage rate requirements. Management concurred with the recommendations and has implemented corrective action plans to address the findings.
Due to the considerable size of the document, the Annual Comprehensive Financial Report is accessible on Metro’s website at https://www.dropbox.com/s/crl8j8kma214p84/FY22%20-%20LA%20Metro%20ACFR.pdf?dl=0.
Equity_Platform
EQUITY PLATFORM
There are no anticipated equity impacts or concerns from audit services conducted to complete the Annual Financial Comprehensive Report.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
Approval of this item supports Metro Vision 2028 Goal #5: Provide responsive, accountable, and trustworthy governance within the Metro organization.
Alternatives Considered
ALTERNATIVES CONSIDERED
Audited annual financial audit financial statements are required for compliance state, federal, and local funds. This audit was conducted by an independent certified public accounting firm, and as such, it is not recommended that the Board reject the audits. Rejection of the audit would delay documentation of compliance with Metro’s sales tax provisions as well as state and federal grantee requirements.
Next_Steps
NEXT STEPS
Management Audit Services will continue reporting audit activities on the basic financial statements and component financial statements in the next fiscal year.
Attachments
ATTACHMENTS
Attachment A - SAS 114 Letter Covering Required Communications
Attachment B - Single Audit Report for FY22
Attachment C - Federal Funding Allocation Data for the Transportation Operating Agency (ID# 90154) for FY22
Attachment D - Transportation Development Act Operations Agency for FY22
Attachment E - Transportation Development Act Schedule of Revenues, Expenditures, and Changes in Fund Balances for FY22
Attachment F - State Transit Assistance Special Revenue Fund’s Financial Statements as of FY22 and FY21
Attachment G - Service Authority for Freeway Emergencies (A Component Unit of the Los Angeles County Metropolitan Transportation Authority) Financial Statements for FY22
Attachment H - Low Carbon Transit Operations Program (LCTOP) and Report on Internal Control over Compliance for FY22
Prepared_by
Prepared by: Lauren Choi, Deputy Executive Officer, Administration (Interim), (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
