. Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
MAY 19, 2021
Subject
SUBJECT: CONSOLIDATED AUDIT FOR FISCAL YEARS 2021-25
Action
ACTION: APPROVE CONTRACT AWARD
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer to:
A. AWARD a five-year, firm fixed price Contract No. PS71091000, to Vasquez and Company, LLP (Vasquez) to perform Consolidated Financial and Compliance Audit of the programs, jurisdictions and agencies listed in Attachment C (Package A) for fiscal years (FY) 2021 - 2025 in the amount of $2,506,618.26, effective July 1, 2021, subject to resolution of protest(s) if any; and
B. AWARD a five-year, firm fixed price Contract No. PS71091001, to Simpson and Simpson, LLP (Simpson) to perform Consolidated Financial and Compliance Audit of the programs, jurisdictions and agencies listed in Attachment D (Package B) for fiscal years (FY) 2021 -2025 in the amount of $2,955,150, effective July 1, 2021, subject to resolution of protest(s), if any.
Issue
ISSUE
As the Regional Transportation Planner for Los Angeles County, the Los Angeles County Metropolitan Transportation Authority (Metro) is responsible for planning, programming, and allocating transportation funding to Los Angeles County jurisdictions, transit operators, and other transportation programs. Metro has the fiduciary responsibility to provide assurance that recipients of funds included in the Consolidated Audit adhere to the statutes, program guidelines, and/or agreements with each applicable funding source and that operations data used to allocate funds are fair and are in accordance with Federal Transit Administration (FTA) guidelines.
The consolidated audit process includes financial and compliance audits of the following programs:
1. Local Funding Program to the 88 cities and Unincorporated Los Angeles County.
a) Proposition A Local Return
b) Proposition C Local Return
c) Measure R Local Return
d) Measure M Local Return
e) Transit Development Act (TDA) Article 3
f) Transit Development Act (TDA) Article 8
g) Proposition A Discretionary Incentive Program
2. Transit System Funds to Commerce, Redondo Beach, and Torrance
a) Transit Development Act (TDA) Article 4
b) State Transit Assistance (STA)
c) Proposition A 95% of 40% Discretionary
d) Proposition C 5% Security
e) Proposition C 40% Discretionary
f) Measure R 20% Bus Operations
g) Measure M 20% Transit Operations
3. Proposition A 40% Discretionary - Growth Over Inflation (GOI) Funds to the transit system operators of LADOT, Glendale, Pasadena, and Burbank
4. Fare Subsidies Programs
a) Low Income Fare is Easy (LIFE)
b) Support for Homeless Re-Entry (SHORE) Program
5. SCRRA Metrolink Program
6. Access Services
7. EZ Transit Pass Program
8. LADOT Operating Data (Proposition A Incentive Programs)
Metro allocates over $650 million annually to the stated programs and distributes to the 88 cities (Cities) in Los Angeles County including the County of Los Angeles (County), and other agencies. Annual audits of the programs ensure that the agencies comply with the applicable rules, regulations, policies, guidelines and executed memorandums of understanding (MOU). The audits also serve as a program management tool for effectively managing and administering the programs.
Vasquez and Simpson will perform the financial and compliance audits to provide reasonable assurance to management whether recipients of subsidies included in the Consolidated Audit are adhering to the statutes of each applicable funding source. The audits will be conducted in accordance with generally accepted government auditing standards and will meet the American Institute of Certified Public Accountants' Standards. In performing these audits, Vasquez and Simpson will report on management deficiencies where noted, and report on findings that may result in funds being returned to Metro based on trades or exchange of funds, unused and lapsed funds, and disallowable expenditures.
Discussion
DISCUSSION
The Consolidated Audit Project is divided into two separate packages (Package A and Package B) based primarily on the district geographic location, which creates a more efficient audit process by streamlining the number of audits performed by one firm.
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 $1,079,728 for the audit services was requested in Management Audit Services’ FY2022 budget in cost center 2510 under project numbers 100055, 100058 and 405510. Management Audit Services Department will be accountable for budgeting the costs in future years recognizing this a multi-year contract.
.
IMPACT TO BUDGET
The source of funds for Project 100055 is Measure R administration. The fund is not eligible for bus/rail operating or capital expense. The source of funds for Project 100058 is Measure M administration. The fund is not eligible for bus/rail operating or capital expense. The source of funds for Project 405510 is Other P&P Planning. The fund is 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 state laws and federal provisions require that audits be conducted on the allocated funds. The Consolidated Audit process addresses the requirements and plays a major role in the continued implementation, management, and administration of the funding programs.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Contract No. PS71091000 with Vasquez and Company, LLP, and Contract No. PS71091001 with Simpson and Simpson, LLP, for the Consolidated Financial and Compliance Audits for Fiscal Years 2021 - 2025, effective July 1, 2021.
Attachments
ATTACHMENT
Attachment A - Package A
Attachment B - Package B
Attachment C - Procurement Summary
Attachment D - DEOD Summary
Prepared_by
Prepared by: Lauren Choi, Sr. Director, Audit (Interim), (213) 922-3926
Monica Del Toro, Audit Support Manager, (213) 922-7494
Reviewed_By
Reviewed by: Shalonda Baldwin, Executive Officer, Administration
(213) 418-3265
Debra Avila, Chief Vendor/Contract Management Officer
(213) 418-3051
