Contra Costa County Grand Jury
• 2025-2026
BART at a Crossroads: Structural Deficit, Governance Accountability, and the Choices Ahead
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⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 44 findings
F1
In FY2019, passenger fares generated $520 million in revenue, covering 66.7% of the Bay Area Rapid Transit District’s (BART) total operating expenses, nearly double the national heavy rail average of 32%, according to Federal Transit Administration National Transit Database data.
No recommendations for this finding
F2
BART’s financial model depends on passenger fares for approximately two-thirds of its operating revenue, making the agency vulnerable to sustained declines in ridership.
Related Recommendations (1)
R1
By March 1, 2027, the BART Board of Directors (Board) should consider directing management to incorporate into the Long-Range Financial Plan measurable targets for non-fare revenue as a percentage of total operating revenue, with annual reporting to the Board on progress against those targets, as a structural strategy to reduce the agency’s dependence on fare revenue.
F3
BART’s annual ridership peaked at approximately 132 million trips in FY2016 and declined 5.2% to 128.2 million trips by FY2019, according to BART’s National Transit Database reporting.
No recommendations for this finding
F4
Ridership had begun declining prior to the pandemic due to factors including lower gas prices, more dispersed job locations, and increased ride-hailing.
No recommendations for this finding
F5
In FY2025, passenger miles traveled amounted to 44.6% of the FY2019 figure, with year- over-year improvement slowing from 9.0% between FY2022 and FY2023 to 2.3% between FY2024 and FY2025.
No recommendations for this finding
F6
In Fiscal Year (FY) 2025, BART operated 18.5% more service hours than in FY2019 while recording 44.6% of FY2019 passenger miles.
Related Recommendations (1)
R2
By March 1, 2027, the BART Board should consider directing management to incorporate into the annual Rail Service Plan a formal service-to-ridership alignment framework that defines target service levels relative to ridership demand, establishes measurable utilization thresholds, and requires annual Board reporting on whether actual service hours are appropriately aligned with passenger miles traveled.
F7
The gap between BART's service hours index and passenger miles index widened from 55.5% in FY2021 to 73.9% in FY2025, with no trend toward closure based on data through FY2025.
Related Recommendations (1)
R2
By March 1, 2027, the BART Board should consider directing management to incorporate into the annual Rail Service Plan a formal service-to-ridership alignment framework that defines target service levels relative to ridership demand, establishes measurable utilization thresholds, and requires annual Board reporting on whether actual service hours are appropriately aligned with passenger miles traveled.
F8
Approximately 63% of BART’s FY2025 operating costs are fixed or semi-fixed and do not decline proportionally with service reductions.
Related Recommendations (1)
R3
By March 1, 2027, the BART Board should consider incorporating its existing fixed/semi- variable/variable cost model into regular Board reporting and budget presentations and requiring that any proposed service reduction be accompanied by a written analysis applying that model to demonstrate projected cost savings, estimated effects on ridership and fare revenue, and net impact on the structural deficit.
F9
Between FY2019 and FY2021, BART reduced service by approximately 40% while operating costs declined by only approximately 12%, demonstrating that large service reductions produce limited cost savings due to the fixed-cost nature of heavy rail operations.
Related Recommendations (1)
R3
By March 1, 2027, the BART Board should consider incorporating its existing fixed/semi- variable/variable cost model into regular Board reporting and budget presentations and requiring that any proposed service reduction be accompanied by a written analysis applying that model to demonstrate projected cost savings, estimated effects on ridership and fare revenue, and net impact on the structural deficit.
F10
BART’s FY2027 Preliminary Operating Budget, presented to the BART Board of Directors (Board) on March 31, 2026, projects a $375 million structural operating deficit beginning in FY2027.
No recommendations for this finding
F11
BART’s operating cost model, as documented in the FY2027 Preliminary Operating Budget, indicates that service reductions alone cannot close the $375 million structural deficit.
Related Recommendations (1)
R4
By March 1, 2027, the BART Board should consider directing management to develop structural cost reductions in future budgets.
F12
BART’s cost-reduction strategies include both permanent savings and temporary cost deferrals, including $197 million in deferred capital contributions through FY2027 and a retirement incentive program that generated $18.5 million in net FY2022 savings but increased long-term retiree medical and pension obligations projected to begin in FY2028.
No recommendations for this finding
F13
BART has pursued revenue enhancement initiatives including new faregate installation ($8–$10 million), Clipper BayPass ($7 million), fiber and cellular leases ($7.8 million), parking lot leases (approximately $1 million), Transit-Oriented Development ground leases (approximately $2 million), and Low Carbon Fuel Standard credits ($16 million).
No recommendations for this finding
F14
BART estimates its planned revenue enhancement initiatives will generate approximately $43–$45 million in annualized recurring revenue above the FY2025 baseline, addressing approximately 11% of the projected $375 million structural deficit, according to BART’s FY2027 Preliminary Operating Budget.
Related Recommendations (1)
R5
By March 1, 2027, the BART Board should consider directing management to expand revenue initiatives.
F15
The Connect Bay Area Measure is a regional sales tax authorized by Senate Bill 63 for the November 3, 2026 ballot, proposing a 0.5% tax in Alameda, Contra Costa, San Mateo, and Santa Clara counties and a 1% tax in San Francisco, projected to generate approximately $975 million annually across the five-county area for a period of 14 years.
No recommendations for this finding
F16
BART has identified the Connect Bay Area Measure as the primary mechanism to address its projected structural deficit, with BART’s projected annual allocation of approximately $310 million.
No recommendations for this finding
F17
BART’s FY2027 Preliminary Operating Budget projects that the Connect Bay Area Measure’s $310 million annual allocation to BART is less than the $375 million FY2027 structural deficit, and that the Measure alone will not achieve structural balance in FY2027.
No recommendations for this finding
F18
BART’s five-year financial forecast (FY2027-2031) projects cumulative net deficits of approximately $192 million through FY2031 even with Connect Bay Area Measure revenues beginning in FY2028, and projects that additional cost reduction or revenue measures will be required to achieve structural balance.
No recommendations for this finding
F19
BART has not developed an integrated financial strategy combining Connect Bay Area Measure revenues with identified cost reduction measures sufficient to achieve structural balance across the FY2028-FY2031 forecast horizon.
Related Recommendations (1)
R9
By March 1, 2027, the BART Board should consider directing management to develop a plan to integrate projected Measure revenues with long-term cost reduction strategies in the event the Measure passes as part of a comprehensive financial plan to achieve structural balance across the forecast horizon.
F20
BART’s five collective bargaining agreements have provisions that require minimum staffing levels tied to physical locations rather than service levels, and workforce protections that establish terms that can be expanded through bargaining but require further negotiation to modify.
Related Recommendations (1)
R6
By March 1, 2027, the BART Board should consider directing management, during collective bargaining, to evaluate whether minimum staffing provisions tied to physical locations rather than service levels can be modified to provide greater operational flexibility in response to changing ridership demand.
F21
BART’s overtime represented between 9.4% and 12.4% of regular Full-Time equivalent (FTE) staffing in every fiscal year from FY2015 through FY2025, with the exception of FY2021, when COVID-related service reductions and an early retirement program temporarily depressed the ratio.
Related Recommendations (1)
R8
By March 1, 2027, the BART Board should consider directing management to develop and implement a comprehensive workforce strategy informed by the analytical tools directed under
F22
The FY2024 and FY2025 Quarterly Financial Reports did not identify overtime expenditure drivers by cause or category or establish a management target for overtime.
Related Recommendations (1)
R7
By March 1, 2027, the BART Board should consider directing management to implement analytical tools to identify, categorize, and manage the underlying drivers of overtime costs.
F23
All five recommendations from the OIG’s 2024 span of control audit remain unimplemented.
Related Recommendations (1)
R10
By March 1, 2027, the BART Board should consider directing management to fully implement the outstanding Office of the Inspector General (OIG) recommendations from the 2024 span of control audit and 2025 overtime management audit.
F24
Four of the five recommendations from the OIG’s 2025 overtime management audit remain unimplemented at the time of this report.
Related Recommendations (1)
R10
By March 1, 2027, the BART Board should consider directing management to fully implement the outstanding Office of the Inspector General (OIG) recommendations from the 2024 span of control audit and 2025 overtime management audit.
F25
BART’s organizational chart places Internal Audit within the executive management hierarchy, reporting through the Director of Performance and Audit and Chief Financial Officer (CFO) to the General Manager, with no direct reporting line to the Audit Committee depicted.
Related Recommendations (1)
R11
By April 1, 2027, the BART Board should consider restructuring Internal Audit’s reporting to establish a direct reporting relationship between Internal Audit and the Audit Committee— meaning the Committee approves the audit plan, receives engagement results, and exercises oversight of the internal audit function—consistent with IIA Standards 6.1 and 7.1 and GAGAS Section 3.56.
F26
Internal Audit’s engagements include audits of financial reporting and other functions within the CFO’s organizational span of control.
No recommendations for this finding
F27
Generally Accepted Government Auditing Standards (GAGAS) Section 3.44 and 3.52 and Institute of Internal Auditors (IIA) Standard 7.1 identify the placement of an audit function within the reporting line of the areas it audits as a structural threat to independence.
No recommendations for this finding
F28
BART’s Internal Audit Charter and Audit Committee Charter both reflect that final approval authority over the Internal Audit Charter and annual audit plan rests with executive management rather than the Audit Committee, while IIA Standards 6.2 and 6.3 require that the governing body hold this approval authority.
Related Recommendations (1)
R12
By April 1, 2027, the BART Board should consider amending the Audit Committee Charter to grant the Audit Committee authority to approve the Internal Audit Charter, the annual risk-based audit plan, and audit resources consistent with IIA Standards 6.1 (Organizational Positioning), 6.2 (Internal Audit Charter), and 7.1 (Organizational Independence).
F29
Management’s approval of the Internal Audit Charter and annual audit plan does not comply with IIA Standards 6.2 and 6.3, which require the governing body to approve these documents.
Related Recommendations (1)
R12
By April 1, 2027, the BART Board should consider amending the Audit Committee Charter to grant the Audit Committee authority to approve the Internal Audit Charter, the annual risk-based audit plan, and audit resources consistent with IIA Standards 6.1 (Organizational Positioning), 6.2 (Internal Audit Charter), and 7.1 (Organizational Independence).
F30
The Audit Committee Charter is inconsistent with IIA Standards 6.2 and 6.3 because it requires only a review, rather than formal approval, of the Internal Audit Charter and the annual risk-based audit plan.
Related Recommendations (1)
R12
By April 1, 2027, the BART Board should consider amending the Audit Committee Charter to grant the Audit Committee authority to approve the Internal Audit Charter, the annual risk-based audit plan, and audit resources consistent with IIA Standards 6.1 (Organizational Positioning), 6.2 (Internal Audit Charter), and 7.1 (Organizational Independence).
F31
BART’s Internal Audit Charter states that Internal Audit functionally reports to the Audit Committee—meaning the Committee is responsible for overseeing Internal Audit’s work, approving its plans, and receiving its findings.
No recommendations for this finding
F32
BART’s organizational chart places Internal Audit within the executive management hierarchy with no direct reporting to the Audit Committee.
Related Recommendations (1)
R11
By April 1, 2027, the BART Board should consider restructuring Internal Audit’s reporting to establish a direct reporting relationship between Internal Audit and the Audit Committee— meaning the Committee approves the audit plan, receives engagement results, and exercises oversight of the internal audit function—consistent with IIA Standards 6.1 and 7.1 and GAGAS Section 3.56.
F33
There is no documented policy governing the form, content, or timing of Internal Audit’s communications to the Audit Committee, as IIA Standard 15.1 requires. The Grand Jury’s review of Audit Committee meeting materials found that the topics the Charter requires Internal Audit to address periodically were not always covered in Internal Audit’s appearances.
Related Recommendations (1)
R14
By April 1, 2027, the BART Board should consider requiring Internal Audit to develop and implement a documented policy governing the form, content, and timing of its communications to the Audit Committee, consistent with IIA Standard 15.1, and to report to the Audit Committee on the topics defined in the Internal Audit Charter at each scheduled Committee meeting.
F34
Complete Internal Audit reports were not provided to the Audit Committee on a consistent basis in connection with Internal Audit’s appearances. Activity summaries were provided instead.
Related Recommendations (1)
R15
By April 1, 2027, the BART Board should consider requiring that full Internal Audit reports be provided on a timely basis to the Audit Committee, OIG, and Board without restriction consistent with GAGAS Section 9.57.
F35
There is no documented policy establishing how Internal Audit reports are to be distributed to the Audit Committee following completion of an engagement, as required by GAGAS Section 9.57 and IIA Standard 15.1.
Related Recommendations (1)
R15
By April 1, 2027, the BART Board should consider requiring that full Internal Audit reports be provided on a timely basis to the Audit Committee, OIG, and Board without restriction consistent with GAGAS Section 9.57.
F36
Internal Audit’s public webpage includes the Internal Audit Charter and annual activity reports containing summarized audit findings but does not include the annual audit plan, completed audit reports, or the status of audit recommendation implementation.
Related Recommendations (1)
R16
By April 1, 2027, the BART Board should consider directing Internal Audit to expand the Internal Audit webpage to include the annual audit plan, completed audit reports, and the status of recommendation implementation, consistent with the public availability requirements of GAGAS Section 9.56.
F37
There are no documented restrictions precluding public availability of Internal Audit’s completed audit reports, indicating that BART’s Internal Audit function does not comply with the public distribution requirements of GAGAS Section 9.56.
Related Recommendations (1)
R16
By April 1, 2027, the BART Board should consider directing Internal Audit to expand the Internal Audit webpage to include the annual audit plan, completed audit reports, and the status of recommendation implementation, consistent with the public availability requirements of GAGAS Section 9.56.
F38
Internal Audit’s risk assessment methodology does not comply with IIA Standards 9.3 and 9.4 because it does not include documented scoring criteria, risk-weighting factors, a defined process for gathering risk information, or evidence of management input.
Related Recommendations (1)
R17
By April 1, 2027, the BART Board should consider requiring Internal Audit to formalize and document its risk assessment methodology, including scoring, weighting, and prioritization criteria.
F39
The 2025 annual audit plan presented to the Audit Committee relied on internal surveys to identify risks and did not include documented input from the Audit Committee or Board of Directors, contrary to IIA Standard 9.4, which requires that the risk assessment be informed by input from the board and senior management.
Related Recommendations (1)
R18
By April 1, 2027, the BART Board should consider directing Internal Audit to implement a formal, documented process to obtain and incorporate input from the Audit Committee and Board into the annual risk assessment process, ensuring alignment with the IIA Standards and GAGAS.
F40
During the 2020 and 2025 external auditor procurement cycles, BART staff issued the Request for Proposals in both cycles without prior Audit Committee review, and in the 2025 cycle the Committee was not provided the RFP or the responses received from prospective auditors.
Related Recommendations (1)
R19
By April 1, 2027, the BART Board should consider clarifying and formalizing the Audit Committee’s authority and role in external auditor procurement within the Audit Committee Charter, including defined responsibilities for participation in request for proposal development, evaluation criteria, and selection.
F41
The Employee Code of Conduct was adopted in 2013.
No recommendations for this finding
F42
The Audit Committee Charter requires the Audit Committee to conduct biennial reviews of the Employee Code of Conduct.
Related Recommendations (1)
R20
By April 1, 2027, the BART Board should consider requiring the Audit Committee to conduct and document biennial reviews of the Employee Code of Conduct as required by the Audit Committee’s Charter.
F43
The Employee Code of Conduct has not been reviewed by the Audit Committee since the Committee’s inception in 2021.
Related Recommendations (1)
R20
By April 1, 2027, the BART Board should consider requiring the Audit Committee to conduct and document biennial reviews of the Employee Code of Conduct as required by the Audit Committee’s Charter.
F44
BART’s Internal Audit Charter, Audit Committee Charter, and organizational chart are inconsistent with one another regarding Internal Audit’s reporting relationships and the Audit Committee’s authority, creating ambiguity about where authority over Internal Audit actually resides. These conditions are inconsistent with IIA Standards 6.1 and 7.1, which require that internal audit authority, positioning, and reporting relationships be clearly defined and consistently reflected across governance frameworks.
Related Recommendations (1)
R13
By April 1, 2027, the BART Board should consider directing management to align the Internal Audit Charter, Audit Committee Charter, and organizational chart to consistently reflect Internal Audit’s reporting relationships and the Audit Committee’s authority, as required by IIA Standards 6.1 and 7.1.
In the News 1
News coverage of this report, automatically tracked.
Contra Costa Civil Grand Jury: BART Facing $375 Million Deficit, Governance Problems Raise Concerns
CLAYCORD
· June 15, 2026