FAC Explorer

Audit 37845

FY End
2022-06-30
Total Expended
$2.44B
Findings
4
Programs
13
Organization: Los Angeles County Metropolitan Transportation Authority (CA)
Year: 2022 Accepted: 2023-03-12
Auditor: Crowe LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
30021 2022-002 Significant Deficiency - N
30022 2022-002 Significant Deficiency - N
606463 2022-002 Significant Deficiency - N
606464 2022-002 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
20.507 Covid-19_federal Transit_formula Grants $1.24B Yes 0
20.500 Federal Transit_capital Investment Grants $60.10M Yes 0
20.507 Federal Transit_formula Grants $13.03M Yes 0
20.525 State of Good Repair Grants Program $6.90M Yes 0
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $5.46M Yes 0
20.933 National Infrastructure Investments $3.68M Yes 1
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $1.59M - 0
97.036 Covid-19_disaster Grants - Public Assistance (presidentially Declared Disasters) $627,768 - 0
97.075 Rail and Transit Security Grant Program $431,072 - 0
20.521 New Freedom Program $317,730 - 0
20.205 Highway Planning and Construction $295,604 - 0
20.516 Job Access and Reverse Commute Program $119,592 - 0
20.514 Public Transportation Research $110,082 - 0

Contacts

Name Title Type
C2BXZ6YF52A5 Jesse Soto Auditee
2139226108 Brad Schelle Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3 STATE AND LOCAL FUNDS REIMBURSEMENT Accounting Policies: NOTE 1 GENERAL The accompanying schedule of expenditures of federal and state awards (the Schedule) presents the grant activity of all expenditures of federal and state award programs of the Los Angeles County Metropolitan Transportation Authority (LACMTA) in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the Schedule. The Schedule also includes state grants that do not participate in the federal awards. LACMTA is the reporting entity as defined in Note 1 to the financial statements of LACMTAs basic financial statements. De Minimis Rate Used: N Rate Explanation: NOTE 2 BASIS OF PRESENTATION Expenditures reported on the Schedule are reported on the accrual basis of accounting. Expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. LACMTA has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. LACMTA utilizes state and local funds when federal funds are not received in a timely manner. Upon receipt of federal funds, LACMTA reimburses state and local funds that were utilized for expenditures for federal programs. Reimbursements are shown as credit balances in the Schedule. Expenditures incurred during the current fiscal year, but before a federal grant is executed are included as state or local on the Schedule in the year the expenditures are incurred and are reported as federal on the Schedule in the year the grant was executed.
Title: NOTE 4 FEDERAL FINANCIAL ASSISTANCE Accounting Policies: NOTE 1 GENERAL The accompanying schedule of expenditures of federal and state awards (the Schedule) presents the grant activity of all expenditures of federal and state award programs of the Los Angeles County Metropolitan Transportation Authority (LACMTA) in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the Schedule. The Schedule also includes state grants that do not participate in the federal awards. LACMTA is the reporting entity as defined in Note 1 to the financial statements of LACMTAs basic financial statements. De Minimis Rate Used: N Rate Explanation: NOTE 2 BASIS OF PRESENTATION Expenditures reported on the Schedule are reported on the accrual basis of accounting. Expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. LACMTA has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Pursuant to the Single Audit Act and Uniform Guidance Compliance Supplement, the federal financial assistance is defined as assistance provided by a federal agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance, or direct appropriations. Accordingly, nonmonetary federal assistance is included in federal financial assistance and, therefore, is reported on the Schedule, if applicable. Federal financial assistance does not include direct federal cash assistance to individuals. Solicited contracts between the state and federal government for which the federal government procures tangible goods or services are not considered to be federal financial assistance.
Title: NOTE 5 MAJOR PROGRAMS Accounting Policies: NOTE 1 GENERAL The accompanying schedule of expenditures of federal and state awards (the Schedule) presents the grant activity of all expenditures of federal and state award programs of the Los Angeles County Metropolitan Transportation Authority (LACMTA) in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the Schedule. The Schedule also includes state grants that do not participate in the federal awards. LACMTA is the reporting entity as defined in Note 1 to the financial statements of LACMTAs basic financial statements. De Minimis Rate Used: N Rate Explanation: NOTE 2 BASIS OF PRESENTATION Expenditures reported on the Schedule are reported on the accrual basis of accounting. Expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. LACMTA has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The Single Audit Act and Uniform Guidance establish criteria to be used in defining major federal financial assistance programs. Major programs for LACMTA are those programs selected for testing by the auditor using a risk assessment model, as well as certain minimum expenditure requirements, as outlined in Uniform Guidance. Programs with similar requirements may be grouped into a cluster for testing purposes.
Title: NOTE 6 PRIOR YEAR EXPENDITURES Accounting Policies: NOTE 1 GENERAL The accompanying schedule of expenditures of federal and state awards (the Schedule) presents the grant activity of all expenditures of federal and state award programs of the Los Angeles County Metropolitan Transportation Authority (LACMTA) in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies, are included in the Schedule. The Schedule also includes state grants that do not participate in the federal awards. LACMTA is the reporting entity as defined in Note 1 to the financial statements of LACMTAs basic financial statements. De Minimis Rate Used: N Rate Explanation: NOTE 2 BASIS OF PRESENTATION Expenditures reported on the Schedule are reported on the accrual basis of accounting. Expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments or the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. LACMTA has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. In accordance with Government Accounting Standards Board (GASB) guidance, expenditure-driven grant provisions are determined to be a stipulation that is considered to be an eligibility requirement and as such, revenue cannot be recognized until the agreement has been executed and eligible expenditures have been incurred. As a result, $771,248,282 of expenditures reported on the Schedule were incurred in fiscal year 2021, as the related grant agreement was executed in fiscal year 2022.

Finding Details

Finding 2022-002
Finding 2022-002 ? Monitoring Controls Related to Compliance with Wage Rate Requirements(Significant Deficiency)Information on the Federal Program: ALN 20. 933 - National Infrastructure Investments ? Special Tests and Provisions Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . ." Federal wage rate requirements included in subchapter IV of chapter 31 of title 40, U.S.C., apply to all projects receiving funds under this program, and apply to all parts of the project. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The non-Federal entity should also have internal controls in place to ensure that the contractor or subcontractor is submitting payrolls for any week that contract work is performed. Condition: Staff was unable to provide evidence of controls in place to ensure contracts subject to wage rate requirements are appropriately monitored for compliance. There is no evidence of a review performed over certified payroll records and compliance documents performed in fiscal year 2022. Additionally, there is no evidence of communications with contractors available that demonstrate monitoring wage rate requirements. Cause: Metro experienced staffing turnover and was not able to timely complete a review for all contracts subject to wage rate requirements. Additionally, evidence of a review performed and communications with contractors is not retained outside of email, resulting in lost documentation when there is staffing turnover. Effect: The failure to establish an effective internal control system could have enabled noncompliance to go undetected. Questioned Costs: NoneContext: During our documentation and corroboration of internal controls over monitoring of wage rate requirements, there was no evidence of an effective monitoring control. Identification as a repeat finding: No, this is not a repeat finding. Recommendation: We recommend LACMTA assess the timing and frequency of reviews performed over compliance with wage rate requirements to ensure they are occurring at a frequency that establishes an effective internal control. Additionally, we recommend that documentation of monitoring related communications be retained in accordance with LACMTA?s retention policy. Views of responsible officials and planned corrective actions: We concur with the recommendation and add that the Labor Wage & Retention Programs (LWRP) currently has the required controls to ensure that the certified payrolls are reviewed in a timely manner and reviews are formally documented and evidence of the reviews are retained in accordance with LACMTA?s retention policy. The staff turnover issue that LWRP experienced has been addressed.
Finding 2022-002
Finding 2022-002 ? Monitoring Controls Related to Compliance with Wage Rate Requirements(Significant Deficiency)Information on the Federal Program: ALN 20. 933 - National Infrastructure Investments ? Special Tests and Provisions Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . ." Federal wage rate requirements included in subchapter IV of chapter 31 of title 40, U.S.C., apply to all projects receiving funds under this program, and apply to all parts of the project. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The non-Federal entity should also have internal controls in place to ensure that the contractor or subcontractor is submitting payrolls for any week that contract work is performed. Condition: Staff was unable to provide evidence of controls in place to ensure contracts subject to wage rate requirements are appropriately monitored for compliance. There is no evidence of a review performed over certified payroll records and compliance documents performed in fiscal year 2022. Additionally, there is no evidence of communications with contractors available that demonstrate monitoring wage rate requirements. Cause: Metro experienced staffing turnover and was not able to timely complete a review for all contracts subject to wage rate requirements. Additionally, evidence of a review performed and communications with contractors is not retained outside of email, resulting in lost documentation when there is staffing turnover. Effect: The failure to establish an effective internal control system could have enabled noncompliance to go undetected. Questioned Costs: NoneContext: During our documentation and corroboration of internal controls over monitoring of wage rate requirements, there was no evidence of an effective monitoring control. Identification as a repeat finding: No, this is not a repeat finding. Recommendation: We recommend LACMTA assess the timing and frequency of reviews performed over compliance with wage rate requirements to ensure they are occurring at a frequency that establishes an effective internal control. Additionally, we recommend that documentation of monitoring related communications be retained in accordance with LACMTA?s retention policy. Views of responsible officials and planned corrective actions: We concur with the recommendation and add that the Labor Wage & Retention Programs (LWRP) currently has the required controls to ensure that the certified payrolls are reviewed in a timely manner and reviews are formally documented and evidence of the reviews are retained in accordance with LACMTA?s retention policy. The staff turnover issue that LWRP experienced has been addressed.
Finding 2022-002
Finding 2022-002 ? Monitoring Controls Related to Compliance with Wage Rate Requirements(Significant Deficiency)Information on the Federal Program: ALN 20. 933 - National Infrastructure Investments ? Special Tests and Provisions Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . ." Federal wage rate requirements included in subchapter IV of chapter 31 of title 40, U.S.C., apply to all projects receiving funds under this program, and apply to all parts of the project. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The non-Federal entity should also have internal controls in place to ensure that the contractor or subcontractor is submitting payrolls for any week that contract work is performed. Condition: Staff was unable to provide evidence of controls in place to ensure contracts subject to wage rate requirements are appropriately monitored for compliance. There is no evidence of a review performed over certified payroll records and compliance documents performed in fiscal year 2022. Additionally, there is no evidence of communications with contractors available that demonstrate monitoring wage rate requirements. Cause: Metro experienced staffing turnover and was not able to timely complete a review for all contracts subject to wage rate requirements. Additionally, evidence of a review performed and communications with contractors is not retained outside of email, resulting in lost documentation when there is staffing turnover. Effect: The failure to establish an effective internal control system could have enabled noncompliance to go undetected. Questioned Costs: NoneContext: During our documentation and corroboration of internal controls over monitoring of wage rate requirements, there was no evidence of an effective monitoring control. Identification as a repeat finding: No, this is not a repeat finding. Recommendation: We recommend LACMTA assess the timing and frequency of reviews performed over compliance with wage rate requirements to ensure they are occurring at a frequency that establishes an effective internal control. Additionally, we recommend that documentation of monitoring related communications be retained in accordance with LACMTA?s retention policy. Views of responsible officials and planned corrective actions: We concur with the recommendation and add that the Labor Wage & Retention Programs (LWRP) currently has the required controls to ensure that the certified payrolls are reviewed in a timely manner and reviews are formally documented and evidence of the reviews are retained in accordance with LACMTA?s retention policy. The staff turnover issue that LWRP experienced has been addressed.
Finding 2022-002
Finding 2022-002 ? Monitoring Controls Related to Compliance with Wage Rate Requirements(Significant Deficiency)Information on the Federal Program: ALN 20. 933 - National Infrastructure Investments ? Special Tests and Provisions Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . ." Federal wage rate requirements included in subchapter IV of chapter 31 of title 40, U.S.C., apply to all projects receiving funds under this program, and apply to all parts of the project. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements, a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The non-Federal entity should also have internal controls in place to ensure that the contractor or subcontractor is submitting payrolls for any week that contract work is performed. Condition: Staff was unable to provide evidence of controls in place to ensure contracts subject to wage rate requirements are appropriately monitored for compliance. There is no evidence of a review performed over certified payroll records and compliance documents performed in fiscal year 2022. Additionally, there is no evidence of communications with contractors available that demonstrate monitoring wage rate requirements. Cause: Metro experienced staffing turnover and was not able to timely complete a review for all contracts subject to wage rate requirements. Additionally, evidence of a review performed and communications with contractors is not retained outside of email, resulting in lost documentation when there is staffing turnover. Effect: The failure to establish an effective internal control system could have enabled noncompliance to go undetected. Questioned Costs: NoneContext: During our documentation and corroboration of internal controls over monitoring of wage rate requirements, there was no evidence of an effective monitoring control. Identification as a repeat finding: No, this is not a repeat finding. Recommendation: We recommend LACMTA assess the timing and frequency of reviews performed over compliance with wage rate requirements to ensure they are occurring at a frequency that establishes an effective internal control. Additionally, we recommend that documentation of monitoring related communications be retained in accordance with LACMTA?s retention policy. Views of responsible officials and planned corrective actions: We concur with the recommendation and add that the Labor Wage & Retention Programs (LWRP) currently has the required controls to ensure that the certified payrolls are reviewed in a timely manner and reviews are formally documented and evidence of the reviews are retained in accordance with LACMTA?s retention policy. The staff turnover issue that LWRP experienced has been addressed.