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Closed Meeting Requirements: If the Audit Committee wants to meet in closed session (privately), a Member of the Committee must make a motion to do so and give the reason why the Committee has to meet privately. (City of Toronto Act, 2006)

Notice to people writing or making presentations to the Audit Committee: The City of Toronto Act, 2006 and the City of Toronto Municipal Code authorize the City of Toronto to collect any personal information in your communication or presentation to City Council or its committees.

The City collects this information to enable it to make informed decisions on the relevant issue(s). If you are submitting letters, faxes, e-mails, presentations or other communications to the City, you should be aware that your name and the fact that you communicated with the City will become part of the public record and will appear on the City’s website. The City will also make your communication and any personal information in it – such as your postal address, telephone number or e-mail address – available to the public, unless you expressly request the City to remove it.

The City videotapes committee and community council meetings. If you make a presentation to a committee or community council, the City will be videotaping you and City staff may make the video tapes available to the public.

If you want to learn more about why and how the City collects your information, write to the City Clerk's Office, City Hall, 100 Queen Street West, Toronto ON M5H 2N2 or by calling 416-392-8021.

Declarations of Interest under the Municipal Conflict of Interest Act.

Confirmation of Minutes - February 12, 2010, Meeting 15

Communications/Reports

That the Audit Committee give consideration to the following:

1.         City Council referred the following recommendation of the Audit Committee, back to the Audit Committee for consideration at its next meeting on May 14, 2010:

-           City Council request the Treasurer to review the parking enforcement process as it relates to the issue and cancellation of parking tags for delivery and courier vehicles. Such a review include an evaluation of best practices in other Canadian and US jurisdictions.  If required, amendments to provincial legislation be requested.

2.         City Council also referred the following motion to the Audit Committee for consideration at its next meeting on May 14, 2010:

             Moved by Councillor Moscoe:

             That the Treasurer be requested to:

1.         report annually to the Government Management Committee on the number of tickets cancelled in each category with a view to using the data to evaluate our cancellation protocol; and

2.          revise data collection procedures so as to generate data for the Toronto Police Service that would enable Police supervisory staff to evaluate the job performance of parking control officers on the basis of:

a.         number of cancelled tickets.

b.         number of convictions.

This letter has been prepared at the request of the Audit Committee of the City of Toronto to obtain assurance that expenditures as incurred by the Auditor General's Office of the City of Toronto (AGO) are in compliance with the applicable policies as set by the City of Toronto.

The Chair of the Audit Committee recommends that the Audit Committee:

1.         Authorize the City Clerk to accept regular business Items for the July 5, 2010 meeting of the Audit Committee in addition to the Financial Statements from the City's ABCs.

In July 2008, the Audit Committee adopted a motion which directed that in future years, the annual schedule of meetings for the Audit Committee include:

-           one meeting to review the City’s audited consolidated financial statements; and

-           a separate meeting to review the financial statements of agencies, boards and commissions (ABCs) including business improvement areas (BIAs), arenas and community centres.

Accordingly, the meeting of the Audit Committee scheduled for June 30, 2010 is to consider the City's financial statements, and the meeting on July 5, 2010 is to consider financial statements of the City's ABCs, BIAs, Arenas and Community Centres.

Due to the upcoming election, these are the last meetings scheduled for this year.  The Auditor General has advised that there will be several other matters that will require consideration by the Audit Committee.  I am recommending that the Audit Committee permit other Items at the July 5, 2010 meeting, in addition to the financial statements.

The Auditor General recommends that:

1.         The Deputy City Manager and Chief Financial Officer review the draft Risk Management Policies and Procedures Manual and ensure that it is current, revised to take into account emerging or changed circumstances, reviewed by all stakeholder groups, finalized and widely circulated to all relevant staff.

2.         The Director, Corporate Finance, in consultation with the City’s insurance advisors, evaluate the risks and benefits of increasing the City’s level of self insurance.  The results of the evaluation be reported to City Council.

3.         The Director, Corporate Finance, review the possibilities of changing the current insurance fronting arrangement.  Such a review include consultation with staff of the Toronto Transit Commission. 

4.         The Deputy City Manager and Chief Financial Officer review and, if appropriate, recommend to Council revisions to the delegated financial authority limits for the settlement of insurance claims.

5.         The Director, Corporate Finance, establish a process to monitor City divisional response time to insurance adjuster requests for information and report results to Divisions where significant delays occur.  The City Manager take appropriate action if response times are not appropriately addressed.

6.         The Director, Corporate Finance perform regular reviews of the time spent on adjusting services for the same category of claims.  Any files which result in an inordinate amount of time and as a result incur excessive costs be discussed with the third party adjuster.

7.         The Director, Corporate Finance, review the financial thresholds for reporting insurance claims to the Claims Review Group.

8.         The Director, Corporate Finance, review the Loss Control Notice process to ensure all Notices are issued when required, divisional responses are received and progress on corrective action is monitored by Insurance and Risk Management staff.

9.         The Director, Corporate Finance, ensure appropriate action is taken on loss prevention recommendations identified by the insurer.  For recommendations not addressed, specific reasons for not doing so be documented and approved in writing.

10.       The City Solicitor in consultation with the Director, Corporate Finance, prepare a cost-benefit analysis to determine if it would be advantageous to transfer a certain level of legal services currently provided by external private sector legal firms to internal solicitors.  Such an exercise be conducted prior to the next City budget cycle.

11.       The Director, Corporate Finance, consider the development of a process whereby all legal bills are analyzed and scrutinized on a performance review basis.  Such a process include evaluations of time spent on specific legal files, the level of lawyer expertise assigned to each file along with review of hourly rates.  The review process be documented along with evidence of any follow up on apparent irregularities.

12.       The Director, Corporate Finance, review the current fee structure arrangement with the adjuster in order to determine whether or not there would be cost savings in minimizing flat fee charges.

13.       The Director, Corporate Finance, complete the implementation of the Insurance and Risk Management staffing changes approved in the 2009 City budget.

14.       The Director, Corporate Finance, in consultation with the Chief Information Officer, interface the Risk Management Information System operated by the City with the claims database managed by the adjuster.

15.       The Director, Corporate Finance, complete the implementation of an automated process to update the Risk Management Information System quarterly for the cost of all legal services.

16.       The Director, Corporate Finance, consider the need to record, in the claim files, costs related to adjusting services provided by City staff.

17.       The Director, Corporate Finance ensure that user division staff are included in at least an advisory role with the Claims Working Group.

18.       The Director, Corporate Finance complete a comprehensive listing of properties and insured values for the 2011 insurance renewal process.

19.       The Deputy City Manager and Chief Financial Officer report at least once each term of Council on appropriate relevant information relating to significant uninsured risks.

20.       The Director, Corporate Finance, in consultation with appropriate senior management, consider the cost-effectiveness of consolidating the current City of Toronto insurance program to include certain other City Agencies, Boards, Commissions and Corporations.

The Auditor General recommends that:

1.         The General Manager, Parks, Forestry and Recreation, in consultation with the Chief Information Officer, evaluate options for alternative payment methods including the use of debit and credit cards at sales counters and vending machines, as well as Web-based sales.

2.         The General Manager, Parks, Forestry and Recreation, develop an automated cash reconciliation process.  The process should include daily variance tracking of cash shortages and overages, and should report accumulated variances by month, year and cashier.  The process should also provide for investigation and reconciliation of unusual variances.  Mandatory supervisory review should include sign-off on all reconciliations and variances.  Variance reports should be retained in accordance with required record retention time frames.

3.         The General Manager, Parks, Forestry and Recreation in consultation with the Chief Information Officer, conduct a business process review of the Ferry Service/Marine Operations and evaluate options to upgrade or replace the existing information technology system for submission to the 2011 information technology capital process.  The review should include:

a.         integration of the point of sale system with other related City systems, such as the debit and credit card system and the SAP financial system; and

b.         an evaluation of the CLASS management information system as it relates to meeting the needs of Marine Operations.

4.         The General Manager, Parks, Forestry and Recreation, implement an interim process to independently reconcile point of sale revenues with bank deposits.

5.         The General Manager, Parks, Forestry and Recreation, ensure staff are appropriately trained on computer systems routinely used and user manuals are available to staff for training and ready reference.  Further, the General Manager, Parks, Forestry and Recreation, in consultation with the Chief Information Officer, determine corporate requirements for future computer system support and maintenance in the event of system failure.

6.         The General Manager, Parks, Forestry and Recreation, in consultation with the Chief Information Officer, evaluate options for automating the ferry service ticket inventory.

7.         The General Manager, Parks, Forestry and Recreation, in consultation with the Chief Information Officer, evaluate options for:

a.         automating ticket cancellation and refund processes; and

b.         implementing a process to analytically review cancelled tickets and refunds.

Further, the General Manager, Parks, Forestry and Recreation, implement a process to ensure reasons for ticket and ferry pass cancellations and refunds are appropriately documented and are subject to supervisory approval.

8.          The General Manager, Parks, Forestry and Recreation, review current ticket and dock procedures.  Periodic comparisons between tickets sold and the number of patrons recorded as ferry passengers should be conducted, and unusual deviations investigated.

9.         The General Manager, Parks, Forestry and Recreation, develop a process to review and monitor vendor contracts and ensure contracts are renewed on a timely basis.

In addition, the General Manager, Parks, Forestry and Recreation, develop a process to periodically bill and follow-up on outstanding revenues on a timely basis.

10.       The General Manager, Parks, Forestry and Recreation, in consultation with the Chief Information Officer, evaluate controls on system data and change management processes, and ensure corporate requirements are followed for current and future computer systems.

The Auditor General recommends that:

1.          The following recommendations in the attached Auditor General’s report entitled “Governance and Management of City Wireless Technology Needs Improvement” be adopted:

“1.       The Chief Information Officer ensure current and future wireless projects undertaken by City divisions are administered under the Information Technology Governance Framework.

2.         The Chief Information Officer ensure measures to provide a consultative and collaborative role on wireless projects undertaken by City Agencies, Boards and Commissions are implemented.

3.         The Chief Information Officer prepare a comprehensive City-wide IT Wireless Plan and periodically review the plan to ensure that it is current and relevant.

4.         The Chief Information Officer complete a review of City-wide information technology policies to ensure policies are prepared, approved and reviewed on a regular basis.

5.         The Chief Information Officer implement City-wide wireless standards and develop procedures to provide for periodic review to ensure the accuracy and relevancy of wireless standards.

6.         The Chief Information Officer develop a comprehensive IT Security Manual as a ready reference for City staff.

7.         The Chief Information Officer implement additional measures to further reduce the risk of unauthorized access to City wireless technology.

8.         The Chief Information Officer ensure information technology inventory records are complete and controls are working as intended.”

2.         This report be forwarded to the City’s Agencies, Boards and Commissions for information.

The Auditor General recommends that:

1.         The General Manager of Parks, Forestry and Recreation, evaluate the City’s ongoing role in the management of facilities such as the East York Curling Club.  The evaluation determine the most effective operating model taking into account community involvement in the facility as well as the management of core programs and other ancillary services.

2.         The General Manager of Parks, Forestry and Recreation, develop an accountability framework which includes formal operating agreements for groups operating programs at any City owned curling facility.

3.         The General Manager of Parks, Forestry and Recreation, until such time as a different operating model is implemented, request that the members of the Club’s volunteer Executive Board:

a.         provide a financial report on a periodic basis, regarding funds held in the Board’s bank accounts and the expenditures made using these funds; and

b.         provide access, upon request, to review documents and records to substantiate the completeness of receipts and the appropriateness of expenditures.

4.         The General Manager of Parks, Forestry and Recreation review the internal control deficiencies identified at the East York Curling Facility and establish a process whereby such control deficiencies are reviewed and addressed by the Parks, Forestry and Recreation Compliance Unit.

5.         The General Manager of Parks, Forestry and Recreation review the recommendations contained in this report for applicability to the other two Parks, Forestry and Recreation curling facilities, and where appropriate, such recommendations be implemented.