Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
APRIL 15, 2020
Subject
SUBJECT: ANNUAL FINANCIAL AND COMPLIANCE AUDITS OF METRO AND ITS COMPONENT UNITS
Action
ACTION: AWARD CONTRACT
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to award a five-year, firm fixed-price Contract No. PS64807000 to Crowe LLP to provide Annual Financial and Compliance Audit Services in the amount of $1,836,135 effective April 24, 2020, subject to resolution of protest(s), if any.
Issue
ISSUE
Metro is required to have an independent Certified Public Accountant firm perform annual financial and compliance audits. The audit reports are submitted to funding partners and to financing institutions relative to Metro bond issues. The recommended contractor shall begin with the audit of Metro’s financial statements and component units starting fiscal year ending June 30, 2020.
Discussion
DISCUSSION
The scope of services includes the financial and compliance audit requirements of Metro and the component units including:
• Comprehensive Annual Financial Report (CAFR);
• Single Audit Report on Federal grant activities;
• Transportation Development Act (TDA);
• Proposition 1B Public Transportation, Modernization, Improvement, and Service Enhancement Account Program (PTMISEA);
• State Transit Assistance (STA);
• Service Authority for Freeway Emergencies (SAFE),
• Low Carbon Transit Operations Program (LCTOP);
• Crenshaw Project Corporation (CPC); and
• National Transit Database (NTD).
The firm is also required to provide a management report which addresses any material weaknesses and/or significant deficiencies in Metro’s accounting system and internal controls noted in the auditor’s examination of Metro’s books and records.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of this item will not impact the safety of Metro’s patrons or employees.
Financial_Impact
FINANCIAL IMPACT
Funding of $342,410 for the contracted services will be appropriated in the FY2021 budget in cost center 2510 under project number 405510. Since this is a multi-year contract, Management Audit Services will be accountable for budgeting the cost in future years.
IMPACT TO BUDGET
The source of funds for Project 405510 is Propositions A, C & TDA Administration funds. These funds are not eligible for bus/rail operating or capital expense.
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
No alternatives were considered, as laws and regulations require Metro to have financial and compliance audits performed annually by an independent Certified Public Accountant.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract No. PS64807000 to Crowe LLP for annual financial and compliance audits, effective April 10, 2020.
Attachments
ATTACHMENT
Attachment A - Procurement Summary
Attachment B - DEOD Summary
Prepared_by
Prepared by: Lauren Choi, Interim Sr. Director, Audit, (213) 922-3926
Reviewed_By
Reviewed by: Shalonda Baldwin, Interim Chief Auditor, (213) 418-3265
Debra Avila, Chief Vendor/Contract Management Officer
(213) 418-3051
