2010-02-22 Committee Report

City Council on February 22 and 23, 2010, adopted the following:

1. City Council request the City Manager to review the recommendations contained in the Bellamy Report on the Toronto Computer Leasing and Toronto External Contracts Inquiries in order to ensure that all recommendations pertaining to ethics training are addressed. Further, training required as a result of the Bellamy recommendations be required to specifically address conflict of interest issues, and be made mandatory for all City staff.

The Audit Committee recommends that:

The Audit Committee requested the Executive Director, Human Resources, to report to the first meeting of the Audit Committee in 2011, on the final outcome of employee terminations which occurred in 2007 to 2009 as a result of fraud, and whether the terminations were upheld if referred to an arbitrator, where a final decision is available.

The Auditor General and the Director, Forensic Unit, Auditor General's Office, made a presentation to the Audit Committee on the 2009 Annual Report - Fraud and Waste Hotline.

The Audit Committee recessed its public session and met in closed session to consider confidential information on this Item as it relates to:

1. personal matters about identifiable individuals, including municipal or local board employees;

2. labour relations and employee negotiations; and

3. litigation or potential litigation affecting the municipality or local board.

In June 2000, Audit Committee requested that the Auditor General submit an annual report on the status of fraud and related matters. This report represents the Auditor General’s ninth report on the activities of the Fraud and Waste Hotline program for the period of January 1, 2009 to December 31, 2009.

During 2009, the Fraud and Waste Hotline received 677 complaints, an increase of nine per cent from the 619 complaints received in 2008. This amount represents an increase of 184 per cent from the initial 238 complaints received by the Hotline in 2003, its first full year of operation.

In 2009, there were a number of complaints received which related to contraventions or potential contraventions of the City’s Conflict of Interest Policy. There continues to be a less than clear understanding of circumstances which may constitute a real, potential or perceived conflict.

In 2006, the Auditor General’s Office made a recommendation regarding expediting the implementation of formal ethics training to all City staff. While ethics training, including training on conflicts of interest has been introduced, it has not been provided to all management staff. Further, ethics training continues to be outstanding for all non-union staff.

Madame Justice Bellamy in her report relating to the Toronto Computer Leasing Inquiry and the Toronto External Contracts Inquiry made specific recommendations in relation to staff training. This staff training needs to be extended to all staff and at the same time evaluated to ensure that it is effective.

City Council on February 22 and 23, 2010, adopted the following:

1. City Council request the Treasurer to review the practices currently adopted by 407 International Inc. in connection with the collection of out-of-province receivables. Such a review also include the practices of other jurisdictions. Further, the Treasurer review the potential use of collection agencies. If required, requests for amendments to provincial legislation be made in order to facilitate the collection of out-of-province receivables.

2. City Council request the Treasurer to re-evaluate the criteria supporting the discretionary cancellation of parking tags. Policies and procedures concerning the preparation and retention of documentation in support of cancellations be developed. Supporting documentation be randomly reviewed by supervisory staff. In addition, management reports be developed and reviewed on an ongoing basis to identify anomalies and trends.

3. City Council request the Treasurer, in consultation with the Chief Information Officer, to review the potential of automating certain aspects of the documentation requirement process as it pertains to pre-court filing documents and request for trials. Such a process should be conducted in consultation with the City Solicitor in order to ensure that the automation of certain processes is not contrary to legislation and, if required, amendment to the provincial legislation be requested. Further, the Treasurer monitor the requests for cancellation of tickets in batches, with a view to developing policy around this practice including but not limited to possible regulation of court agents.

4. City Council request the Treasurer to direct all staff that parking tag adjustments processed through the Parking Tag Management System are appropriately documented and that each adjustment be accompanied by an appropriate audit trail. Such documentation be reviewed on a random basis by supervisory staff.

5. City Council request the Treasurer to review the current plate denial process. Such a review take place in consultation with the Ministry of Transportation and focus on the reasons why significant receivables continue to be outstanding beyond the two-year licence plate renewal period. Improvements identified be implemented in order to maximize the effectiveness of the plate denial system.

6. City Council request the Treasurer to review the parking tag collection process, prioritise those receivables which relate to individuals and entities who have significant receivables owing on multiple plates and consider conducting corporate searches to identify these entities. Once identified the appropriate follow-up process be conducted including the use of collection agencies specifically directed to these accounts.

7. City Council request the Treasurer to review the possibility of providing collection agencies with specific information including the names and addresses of individuals and companies with outstanding parking tags. Amendments to provincial legislation be requested, if required.

8. City Council request the Treasurer to review the extent of receivables submitted to collection agencies such that collection agencies are provided information on entities who have parking tags owing on more than one vehicle. Finally, the Treasurer consider providing collection agencies with more up to date receivable information.

9. City Council request the Treasurer, in consultation with the Chief Information Officer, to review the current cheque processing system so that payments relating to tags in plate denial status and payments which have previously been made are identified more easily by those staff receiving payment. Such a process would reduce the administrative process of issuing refund cheques.

10. City Council request the Treasurer to review the merits of amending the cheque collection process so that NSF fees are clearly identified and subsequently collected. Amendments to provincial legislation be requested, if required.

11. City Council request the Treasurer to develop a formal change control process. Application development should be separate from system administration, and developers should not install their own programs to the production environment.

12. City Council request the Treasurer to develop and implement a formal access control and review process. A review of user access should occur periodically and unauthorized users deleted from the authorized user list.

13. City Council request the Treasurer to report to the Government Management Committee for its meeting on May 20, 2010, on the protocols/guidelines for parking tag cancellations prior to making the guidelines public.

14. City Council refer 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.

15. City Council refer 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.

The Audit Committee recommends that:

4. 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.

5. City Council request the Treasurer to direct all staff that parking tag adjustments processed through the Parking Tag Management System are appropriately documented and that each adjustment be accompanied by an appropriate audit trail. Such documentation be reviewed on a random basis by supervisory staff.

6. City Council request the Treasurer to review the current plate denial process. Such a review take place in consultation with the Ministry of Transportation and focus on the reasons why significant receivables continue to be outstanding beyond the two-year licence plate renewal period. Improvements identified be implemented in order to maximize the effectiveness of the plate denial system.

7. City Council request the Treasurer to review the parking tag collection process, prioritise those receivables which relate to individuals and entities who have significant receivables owing on multiple plates and consider conducting corporate searches to identify these entities. Once identified the appropriate follow-up process be conducted including the use of collection agencies specifically directed to these accounts.

8. City Council request the Treasurer to review the possibility of providing collection agencies with specific information including the names and addresses of individuals and companies with outstanding parking tags. Amendments to provincial legislation be requested, if required.

9. City Council request the Treasurer to review the extent of receivables submitted to collection agencies such that collection agencies are provided information on entities who have parking tags owing on more than one vehicle. Finally, the Treasurer consider providing collection agencies with more up to date receivable information.

10. City Council request the Treasurer, in consultation with the Chief Information Officer, to review the current cheque processing system so that payments relating to tags in plate denial status and payments which have previously been made are identified more easily by those staff receiving payment. Such a process would reduce the administrative process of issuing refund cheques.

11. City Council request the Treasurer to review the merits of amending the cheque collection process so that NSF fees are clearly identified and subsequently collected. Amendments to provincial legislation be requested, if required.

12. City Council request the Treasurer to develop a formal change control process. Application development should be separate from system administration, and developers should not install their own programs to the production environment.

13. City Council request the Treasurer to develop and implement a formal access control and review process. A review of user access should occur periodically and unauthorized users deleted from the authorized user list.

Our review identified opportunities for strengthening controls in the administration of parking tag revenues. Certain of our recommendations, however, will necessitate negotiation with the Province and will require legislative change. In view of the significant potential revenue opportunities, such negotiations should occur as soon as possible.

City Council on February 22 and 23, 2010, adopted the following:

1. City Council grant authority to enter into an agreement with PriceWaterhouseCoopers LLP for external audit services for fiscal years 2010 through 2014 inclusive for $4,085,000 (net of all applicable taxes) as per the fee schedule outlined in Confidential Attachment 2 to the report (January 25, 2010) from the Auditor General, and under terms satisfactory to the Auditor General and the City Solicitor.

2. City Council authorize the public release of the confidential information in Attachment 2 to the report (January 25, 2010) from the Auditor General, upon Council’s approval of this contract award to PriceWaterhouseCoopers LLP and PriceWaterhouseCoopers LLP signing the contract.

3. City Council direct that the confidential information in Attachment 3 to the report (January 25, 2010) from the Auditor General, remain confidential.

4. City Council authorize and direct the appropriate City officials to take the necessary action to give effect thereto.

Confidential Attachment 2 to the report (January 25, 2010) from the Auditor General remains confidential in its entirety at this time, in accordance with the provisions of the City of Toronto Act, 2006, as it relates to the security of property belonging to the City or one of its agencies, boards and commissions. The information will be released upon Council’s approval of the contract award to PriceWaterhouseCoopers LLP and PriceWaterhouseCoopers LLP signing the contract.

Confidential Attachment 3 to the report (January 25, 2010) from the Auditor General remains confidential in its entirety, in accordance with the provisions of the City of Toronto Act, 2006, as it relates to the security of property belonging to the City or one of its agencies, boards and commissions.

The Audit Committee recommends that:

3. City Council direct that the confidential information in Attachment 3 to the report (January 25, 2010) from the Auditor General, remain confidential.

4. City Council authorize and direct the appropriate City officials to take the necessary action to give effect thereto.

The Audit Committee recessed its public session and met in closed session to consider confidential information on this Item as it relates to the security of the property belonging to the City or one of its agencies, boards and commissions.

The purpose of this report is to advise on the results of Request for Proposal (RFP) 9171-09-7137 for external audit services to perform the financial statement audits for the City of Toronto and its major agencies, boards, and commissions for the years ending 2010 to 2014 inclusive and to request authority to enter into an agreement with the recommended proponent.

City Council on February 22 and 23, 2010, adopted the following:

1. City Council receive for information, the report (January 5, 2010) from the City Manager.

The Audit Committee recommends that:

1. City Council receive for information, the report (January 5, 2010) from the City Manager.

This report outlines the City Manager’s response to Audit Committee’s request of October 20, 2009 as to the status of recommendations made by the Auditor General since January 1, 1999.

City Council on February 22 and 23, 2010, adopted the following:

1. City Council receive the report (January 22, 2010) from the Deputy City Manager and Chief Financial Officer for information.

2. City Council direct that the confidential information contained in Attachment 1 to the report (January 22, 2010) from the Deputy City Manager and Chief Financial Officer, remain confidential and not be released publicly as it involves litigation or potential litigation that affects the City.

Confidential Attachment 1 to the report (January 22, 2010) from the Deputy City Manager and Chief Financial Officer remains confidential in its entirety, in accordance with the provisions of the City of Toronto Act, 2006, as it relates to litigation or potential litigation that affects the City.

The Audit Committee recommends that:

1. City Council receive the report (January 22, 2010) from the Deputy City Manager and Chief Financial Officer for information.

The Audit Committee recessed its public session and met in closed session to consider confidential information on this Item as it relates to litigation or potential litigation affecting the City.

The report provides Audit Committee with the outcome of negotiations with Mercer (Canada) Limited with respect to a refund of certain fees paid for actuarial services.

City Council on February 22 and 23, 2010, adopted the following:

1. City Council approve the 2008 audited financial statements and management letters of the eight Business Improvement Areas attached as Appendices A-1 to M-1 to the report (January 22, 2010) from the Treasurer and the Director, Business Services, Economic Development and Culture.

The Audit Committee recommends that:

The purpose of this report is to present the 2008 audited financial statements and management letters of eight Business Improvement Area’s (BIAs) financial statements to Audit Committee and City Council for approval.

Meeting No.	15	Contact	Rosemary MacKenzie, Council Administrator
Meeting Date	Friday, February 12, 2010	Phone	416-392-8021
Start Time	9:30 AM	E-mail	rmacken@toronto.ca
Location	Committee Room 1, City Hall	Chair	Councillor Doug Holyday

Item

AU15.1	2009 Annual Report – Fraud and Waste Hotline (Ward: All)

AU15.2	Controls Over Parking Tags Need Strengthening (Ward: All)

AU15.3	Results of Request for Proposal 9171-09-7137 - External Audit Services for the City of Toronto and Its Major Agencies, Boards and Commissions (Ward: All)

AU15.5	Auditor General's Outstanding Recommendations on Reports from 1999 - 2005 (Ward: All)

AU15.6	Report on Negotiations with the City's Actuaries (Ward: All)

AU15.8	Business Improvement Areas (BIAs) - 2008 Audited Financial Statements - Report No. 2 (Ward: All)