Members of Council and Staff: Please keep this agenda and the accompanying material until the City Council meeting dealing with these matters has ended. The City Clerk’s Office will not provide additional copies.

Special Assistance for Members of the Public: City staff can arrange for special assistance with some advance notice. If you need special assistance, please call (416-392-8021), TTY 416-338-0889 or e-mail rmacken@toronto.ca.

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.

Communications/Reports

City Council receive for information, the 2009 Financial Statements and related documents of the following agencies, boards, commissions and corporations:

-  Exhibition Place

-  The North York Performing Arts Centre Corporation (operating as The Toronto Centre for the Arts)

-  The Sony Centre for the Performing Arts

-  The St. Lawrence Centre for the Arts

-  Toronto Atmospheric Fund

-  Toronto Public Library

-  Toronto Transit Commission

-  Yonge-Dundas Square

The following agencies, boards, commissions and corporations have submitted 2009 Financial Statements to the Audit Committee for consideration:

-  Exhibition Place

-  The North York Performing Arts Centre Corporation (operating as The Toronto Centre for the Arts)

-  The Sony Centre for the Performing Arts

-  The St. Lawrence Centre for the Arts

-  Toronto Atmospheric Fund

-  Toronto Public Library

-  Toronto Transit Commission

-  Yonge-Dundas Square

The Treasurer and the Director, Business Services, Economic Development and Culture recommend that:

1.         The Audit Committee approve the 2009 audited financial statements and management letters of the thirty-four (34) Business Improvement Areas' financial statements, attached as Appendices A-1 to AI-1 of this report, and forward these to City Council for its approval.

The Auditor General recommends that:

1.         The City Manager direct all staff to prepare reports which contain accurate and complete financial impact statements.  Such reports to address all financial implications both capital and operating.  Reports relating to capital acquisitions contain information on required future state of good repair budgetary requirements.

2.         The City Manager direct all staff that under no circumstances should capital lease agreements be negotiated prior to consultation with the Deputy City Manager and Chief Financial Officer.  The City Manager further advise all staff that potential lease agreements only be consummated after compliance with City policy.

3.         The Deputy City Manager and Chief Financial Officer propose amendments to the Financial Control By-law requiring that final total capital project costs for all major capital projects are reported to the appropriate Standing Committee.  Such reporting include a comparison of costs to budget as well as a comparison of actual completion date to projected completion date.

4.         The City Manager direct staff, when requesting Council approvals for additional financing, to include complete project costs, including management fees and direct salary costs, and budget information as well as estimated project completion dates in all reports.

5.         The City Manager direct that the Design, Construction and Asset Preservation section of the Facilities Management Division be designated as the lead project manager for all renovation projects.  The role of client divisions be clearly defined.

6.         The City Manager, in consultation with the Executive Director, Facilities Management, require that project charters be prepared for all capital projects.  Project charters should define the scope of work, objectives, key deliverables, and project timelines and be approved in writing by both the Design, Construction and Asset Preservation section and the client division.

7.         The City Manager, in consultation with the City Clerk, give consideration to the development of a process or a protocol which would enable Councillors, when considering Motions, to be advised of the financial implications of such Motions.  If this is not possible prior to decisions being made then consideration be given to providing this information at a subsequent meeting.

8.         The Executive Director, Facilities Management, in consultation with the Director, Purchasing and Materials Management, project managers and external consultants, ensure that project design documents are complete and as accurate as possible prior to tender issue.

9.         The Executive Director, Facilities Management, be given sole authority to make decisions on the method by which accessibility requirements be incorporated in all relevant tender documents.  The design of construction and renovation projects be required to comply with the City’s Accessibility Design Guidelines and any new requirements under the Accessibility for Ontarians with Disabilities Act, 2005.

10.       The Director, Design, Construction and Asset Preservation, comply with the City’s asbestos management policy that requires tender documents include a building asbestos assessment report and building asbestos record.  In addition, if necessary and practical, an intrusive asbestos survey should be completed prior to commencing renovations or construction work to confirm the presence of asbestos in the building.

11.       The City Manager direct all staff involved in the design of major construction and renovation projects to ensure that all tender and design documents are complete and signed off by the Facilities Management Division and incorporate the scope of work as agreed with the client division.

12.       The Executive Director, Facilities Management, on a case by case basis, evaluate the need to conduct detailed building condition assessments prior to tendering major construction and renovation projects.  The results of assessments be adequately documented and conveyed to project management staff.

13.       The City Manager direct that Design, Construction and Asset Preservation staff consult with Divisions at the design stage of all projects.  Appropriate sign off of all drawings be standard practice by Design, Construction and Asset Preservation staff in consultation with Division staff.  Such a process be incorporated into the Project Charter.

14.       The Executive Director, Facilities Management, ensure that contractor invoices and change orders are calculated in accordance with the terms of the relevant contract.  Further, the Executive Director, Facilities Management, take action as warranted after consultation with the City Solicitor to recover any excess change order amounts paid to the 129 Peter Street contractor.

The Auditor General recommends that:

1.         The Chief Building Official, in consultation with the General Manager of Parks, Forestry and Recreation, implement controls to prevent the issuance of a building permit until parkland dedication fees have been paid.

2.         The Deputy City Manager and Chief Financial Officer review the infrastructure construction price index currently used by the City of Ottawa in order to determine whether or not a similar index should be used to adjust annual development charge rates at the City of Toronto.

3.         The Chief Building Official, in consultation with the City Solicitor, review the feasibility of including in conditional permit agreements, additional fees payable when terms are not met.

4.         The Director of the Affordable Housing Office, in consultation with the Chief Building Official, review procedures to ensure that information provided in regard to exemptions from development charges for non-profit housing projects is accurate and complete.

5.         The Chief Building Official and the Deputy City Manager and Chief Financial Officer review those areas of the by-law which are the subject of staff misinterpretation and ensure that such areas are addressed either through amendments to the by-law, policies and procedures manual or through additional staff training.

6.         The Chief Building Official evaluate the current audit process to ensure development charge calculations are verified to supporting documentation.  Consideration be given to an audit process prior to the issuance of a building permit.

7.         The General Manager, Parks, Forestry and Recreation, in consultation with the City Solicitor, develop a corporate policy which formalizes the parameters that should be applied when determining the parkland dedication requirement for developments covered by the Etobicoke Motel Strip Secondary Plan.

8.         The General Manager, Parks, Forestry and Recreation ensure that in the future, where parkland dedication fees are set out in negotiated agreements that amounts calculated and collected are in accordance with such agreements and appropriate documentation is maintained for all agreements.

9.         The General Manager, Parks, Forestry and Recreation review negotiated parkland dedication fees for projects where the developer still owns the building.  This review should ensure the correct amounts were collected and assess the feasibility of recovering any uncollected funds.

10.       The General Manager, Parks, Forestry and Recreation in establishing cash payments in lieu of parkland, set up a process to ensure that land appraisals are current and in compliance with the requirements of the applicable by-law.

11.       The Deputy City Manager and Chief Financial Officer, in consultation with the Chief Building Official, enter into discussions with the Toronto Catholic District School Board with a view to implement, where feasible, consistent definitions and policies affecting development charge calculations.

12.       The City Treasurer and the Chief Building Official ensure there is a regular reconciliation of development charges financial information in IBMS and SAP.  An interface between the two systems should be considered.

13.       The Deputy City Manager and Chief Financial Officer review those development charge reserve funds which have been in existence since prior to amalgamation to determine how these funds can best be used.

The Auditor General recommends that:

1.         The Deputy City Manager and Chief Financial Officer:

a.         review with the Province the potential of coordinating audit resources in order to conduct a joint audit of Teranet Enterprises Inc.’s systems

b.         Canadian Institute of Chartered Accountants Handbook Section 5970 report).  

2.         The Deputy City Manager and Chief Financial Officer formalize policies and procedures designed to mitigate the risk of errors in the services rendered by Teranet Enterprises Inc.

3.         The Deputy City Manager and Chief Financial Officer request from Teranet Enterprises Inc. its Compliance Monitoring Report.  The Compliance Monitoring Report be reviewed to ensure it is independent, can be relied upon and any areas of concern are adequately addressed.

4.         The Deputy City Manager and Chief Financial Officer request Teranet Enterprises Inc. to ensure that only those fees approved by City Council are charged on municipal land transfer tax transactions.  Further, Revenue Services Division establish a process to ensure Teranet complies with the provisions contained in the Municipal Land Transfer Tax By-law No. 1423-2007.

5.         The Deputy City Manager and Chief Financial Officer complete a sample review of municipal land transfer tax rebates granted by Teranet Enterprises Inc. during the seven-month period ending August 31, 2008 to ensure that the City’s rebate eligibility criteria were met.

6.         The Deputy City Manager and Chief Financial Officer review the level of ongoing resources required in order to effectively audit the various documentation provided by third parties to support the payment and rebate of municipal land transfer tax.  Such a process be conducted in collaboration with the Province in order to leverage the current provincial audit program.

7.         The Deputy City Manager and Chief Financial Officer consider the possibility of recovering staff costs relating to the processing of manual rebate and refund applications on electronically registered conveyances.

8.         The Deputy City Manager and Chief Financial Officer encourage prompt payment by developing policies to implement interest, financial penalties and other enforcement measures permitted by the Municipal Land Transfer Tax By-law No. 1423-2007.

9.         The Deputy City Manager and Chief Financial Officer:

a.         in consultation with the City Solicitor, review the Municipal Land Transfer Tax By-law No. 1423-2007 to identify any provisions requiring clarification or amendment, and report to City Council, if necessary, on any revisions identified

b.         develop clear written guidelines to ensure consistent application of provisions in the Toronto Municipal Land Transfer Tax By-law No. 1423-2007 by staff of the Revenue Services Division.

The Auditor General recommends that:

1.         The City Manager, in consultation with the Chief Information Officer, review the current reporting structure and relationships between divisional SAP representatives and the Competency Centre with a view to:

a.         minimizing delays in the completion of SAP projects;

b.         ensuring that the ownership of certain SAP modules is clarified and workable; and

c.         ensuring that there is an appropriate segregation of duties between SAP divisional staff and the SAP Competency Centre.

2.         The City Manager in consultation with the Chief Information Officer formalize a policy to require adherence to SAP best practices for all City-wide SAP projects, and implement quality assurance measures to ensure such practices are followed.

3.         The Chief Information Officer establish a formal process for the SAP Competency Centre to develop and maintain the Integrated SAP Work Plan as part of the existing SAP governance model.

4.         The City Manager in consultation with the Chief Information Officer establish a formal process for ensuring those assigned accountability for overseeing SAP projects understand the City SAP environment and have sufficient knowledge and expertise in SAP best practice and methodology.

5.         The Chief Information Officer include SAP Competency Centre service level expectations in formal service level agreements currently being prepared between operating divisions and the Information and Technology Division.

6.         The City Manager establish a process for maintaining a single repository for SAP related issues and risks, and the Chief Information Officer establish a formal process for collecting, addressing and reporting on such risks.

7.         The Chief Information Officer develop SAP Competency Centre performance measures and standards.  Such measures and standards should monitor ongoing performance.

The Auditor General recommends that:

1.         City Council receive this report for information

The Auditor General recommends that:

1.         City Council receive this report for information.

The Auditor General recommends that:

1.         City Council receive this report for information.