Metro - File #: 2025-0427

• File #: 2025-0427
• Type: Plan
• Status: Agenda Ready
• File created: 5/13/2025
• In control: Finance, Budget and Audit Committee
• On agenda: 7/17/2025
• Title: ADOPT the Fiscal Year 2026 (FY26) Proposed Annual Audit Plan (Attachment A).
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Audit, Budgeting, Capital Project, City of Los Angeles, Construction, Evaluation and assessment, Financial Audit, Governance, Heating, cooling and ventilation equipment, Metro Vision 2028 Plan, Plan, Research, Safety, Security, Strategic planning, Transit Community Public Safety Department, Transit safety

Meeting_Body
FINANCE, BUDGET, AND AUDIT COMMITTEE
JULY 18, 2025

Subject
SUBJECT: FISCAL YEAR 2026 AUDIT PLAN

Action
ACTION: APPROVE RECOMMENDATION

Heading
RECOMMENDATION

Title
ADOPT the Fiscal Year 2026 (FY26) Proposed Annual Audit Plan (Attachment A).

Issue
ISSUE

Management Audit Services (MAS) is required to complete an annual agency-wide risk assessment and submit an annual audit plan to the Board of Directors for approval.

Background
BACKGROUND

The Financial Stability Policy, approved in 2007 and last amended in 2022, requires MAS to develop a risk assessment and an annual audit plan (AAP) each year and present it to the Board. It also requires the Finance, Budget, and Audit Committee to provide input and approve the audit plan.

Some projects included in the FY26 AAP are identified as carryovers, meaning they were initiated in FY25 but are expected to be completed in FY26. These projects were not initiated due to resource constraints and additional special review projects requested during FY25.

Discussion
DISCUSSION

The FY26 AAP was developed with consideration of the current state of the agency and results of the agency-wide risk assessment. The agency-wide risk assessment incorporated research as well as input received from Metro's leadership teams across the agency. MAS leveraged the risk assessment results to prepare an Audit Plan that is flexible, relevant, and risk-based. The Audit Plan includes audit projects that add value, provide actionable information to support agency risk management efforts, and will lead to the achievement of organizational goals aligned with Metro's Vision 2028 Strategic Plan and the CEO 2023 strategic aspiration placemat.

Risk Assessment
MAS staff performed an agency-wide risk assessment between January and April 2025. This assessment is a structured, systematic process that combines research and stakeholder engagement, serving as the primary basis for selecting internal audit projects that add value ...