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File #: 2017-0590   
Type: Informational Report Status: Filed
File created: 8/25/2017 In control: Finance, Budget and Audit Committee
On agenda: 9/20/2017 Final action: 9/28/2017
Title: RECEIVE AND FILE report on streamlining audits for small businesses.
Sponsors: Finance, Budget and Audit Committee
Indexes: Audit, Contractors, Contracts, Databases, Disadvantaged business enterprises, Informational Report, Labor, Procurement, Request For Proposal, Small Business Enterprise, Subcontractors
Attachments: 1. Attachment A - VCM Audit Requirements, 2. Attachment B - MAS Audit Practices
Related files: 2019-0880, 2018-0686
Meeting_Body

EXECUTIVE MANAGEMENT COMMITTEE
SEPTEMBER 21, 2017


Subject
SUBJECT: STREAMLINING AUDITS FOR SMALL BUSINESSES

Action
ACTION: RECEIVE AND FILE


Heading
RECOMMENDATION

Title
RECEIVE AND FILE report on streamlining audits for small businesses.

Issue
ISSUE

Audits are necessary to provide accountability and transparency on the utilization of Metro's financial resources. However, at the June 2017 Board meeting Director Dupont-Walker, it was noted that the audit of small businesses should not be too burdensome to the point of negatively impacting small business operations and Metro's Management Audit Services (MAS) Department was requested to report back on the policies and practices for auditing small businesses.

Discussion
DISCUSSION

As stewards of taxpayers' money, Metro's MAS department completed a total of 222 contract audits in the last five fiscal years covering FY 2013 to FY 2017. The audits identified questioned costs of $76,261,508. Audit costs for these 222 audits is estimated at $4.4 million. Eighty-eight of the 222 audits were audits of small business enterprise (SBE) or disadvantaged business enterprise (DBE) contracts. Below is a summary of the contract audits completed and resulting questioned costs:


Completed Audits*
Amount Questioned**
SBE/DBE
88
$14,497,894
Other Contractors
134
$61,763,614
Total*
222
$76,261,508

*Completed Audits include the following types of audits: Pre-Award, Incurred Cost, Change Orders, Buy America Compliance, Indirect Cost Rates and Labor Rates.
**The amount questioned excludes the amounts for indirect cost rates, labor rates, and Buy America Compliance because these audits only report questioned rates or compliance.


MAS completed these 222 audits in response to requests made by Vendor/Contract Management (V/CM) department based on V/CM's policy requirements. The V/CM's policy requirements are designed to comply with the audits required by funders, such as Federal Transit Administrat...

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