Chief Auditor outlines 2026 audit plan; Chair requests board-governance review

Paula Rivera, chief auditor for the California High-Speed Rail Authority, told the Finance and Audit Committee on June 24 that her office completed portions of last year's plan and proposed a risk-based audit program for the coming fiscal year that emphasizes contract management, procurement schedule management, governance and workforce planning.

Rivera described the audit office structure (three teams reporting functionally to the board, administratively to the CEO) and said the office will carry out performance audits, pre-award reviews to evaluate proposed rates on qualifications-based solicitations, and contract compliance audits to check billed costs against contract terms and federal rules. She noted two pre-award reviews for right-of-way engineering services were completed and that contract-compliance work remains in progress for multiple construction packages.

Why it matters: the audit plan targets areas the office and board have identified as higher risk — notably long-duration contracts where contract-management continuity has varied — and includes follow-up procedures to improve remedial action tracking.

Rivera told the committee the office follows two audit standards (the Global Internal Audit Standards, known as the "Red Book," and the Generally Accepted Government Audit Standards, the "Yellow Book") and that both were revised in early 2024; the audit office has revised internal documentation over the last year to align with those updates. She also reported that an internal quality assessment found sampled audits complied with the audit manual and applicable standards.

Chair Steve Kawa asked that the governance review be expanded to include the board's own governance practices. "I would like to ask the board to consider that we add to your governance audit an audit of ourselves, the board of directors," Kawa said. Rivera responded, "We can, um, easily accommodate that," noting the 2020 review included elements of board governance and that adding it is within scope.

Rivera described changes to the office's follow-up process to improve consistency: quarterly requests to auditees, semi-annual and annual reporting of follow-up status, and an offer to present follow-up progress to the Finance and Audit Committee on a six-month cadence or on request. She said the office will bring proposed scheduling and reporting formats back to the committee for coordination.

The committee did not take a formal vote on the audit plan at this meeting; the discussion concluded with agreement to incorporate the board-governance element into the planned work and to coordinate follow-up reporting cadence.