Audit Committee
The full agenda, as filed
All 11 items in the clerk’s order. Each carries the city’s own words: the staff recommendation, what the body decided, and its status. Nothing below is written by us.
AU10.1amended
Auditor General’s Office 2026 Work Plan and Budget Highlights
The purpose of this report is to provide City Council with the Auditor General's 2026 Work Plan, which contains projects that are in progress or will begin in 2026, new projects on the horizon that may commence in either late 2026 or 2027, and a backlog list of potential future audit projects for the longer term. These audit projects are identified through our City-wide risk and opportunities assessment process that is conducted every five years and updated annually for changes in emerging issues, priorities, and trends in allegations made to the Fraud and Waste Hotline. The Auditor General also considers input received from City Councillors and City management. The Auditor General may amend the Annual Work Plan if new priorities arise. This report also provides the 2026 Budget Highlights for information only, as the Audit Committee considers the Auditor General's 2026 Work Plan. The Auditor General is requesting $9.119 million and this 2026 budget request will be presented directly to the Budget Committee at its meeting on January 14 - 16, 2026 for consideration. The Auditor General's budget request reflects resources needed to address her 2026 Work Plan. The Auditor General would like to thank the Audit Committee and City Council for their continued support of this Accountability Office, and of the important work we do. We look forward to continuing to add value to the City and its agencies and corporations, make a positive difference in the lives of Torontonians through improved outcomes from our report recommendations, while taking an approach that helps to build relationships with auditees and stakeholders in a respectful manner.
The Audit Committee recommends that: 1. City Council receive the Auditor General's Office 2026 Work Plan and Budget Highlights as Attachment 1 to the report (October 21, 2025) from the Auditor General for information. 2. City Council request the Auditor General to give consideration to including in a future work plan, an investigation into SmartTrack implementation and to report back to the February 12, 2026 Audit Committee meeting on any required changes to the timeline of future work plan investigations. 3. City Council request the Auditor General consider moving the Toronto Transit Commission Subway Maintenance from the 2027 Project Horizon and to consider including it in the 2026 Work Plan.
Staff recommendation as filed
The Auditor General recommends: 1. City Council receive the Auditor General's Office 2026 Work Plan and Budget Highlights for information.
AU10.2adopted
At its meeting held on July 17, 2025, the Toronto Police Service Board (Board): 1. receive the public report and Confidential Attachment 1 from the Auditor General. 2. direct that all information contained in Confidential Attachment1 to this report remain confidential. 3. forward this public report to City Council through the City's Audit Committee for information. Accordingly, we are forwarding a copy of the Board minute P2025-0717-2.0 and the pubic report from Auditor General to City Council through the City's Audit Committee for information.
The Audit Committee recommend that: 1. City Council receive the report (June 26, 2025) from the Auditor General for information.
Staff recommendation as filed
The Toronto Police Service Board recommend that: 1. City Council receive the report (June 26, 2025) from the Auditor General for information.
AU10.3amended
Audit of Toronto Water: Stormwater and Wastewater Contract Management
Sewer systems play a critical role in the City's stormwater and wastewater infrastructure. Maintaining the City's sewer systems in a state of good repair is essential for providing reliable sewer services to Toronto residents and businesses, and maximizing a return on assets. Aging infrastructure and lack of maintenance can lead to public health risks, harmful environmental impacts, property damage, and costly repairs. Toronto Water manages City sewer systems, and its Capital Works Delivery unit engages construction contractors and professional consulting firms to carry out sewer, forcemain, and pump station state-of-good-repair projects. The contractor is responsible for all construction-related tasks while the consultant is responsible for overall project and contractor management. The Auditor General's 2025 Work Plan included an audit to assess the effectiveness and efficiency of Toronto Water's stormwater asset management program, including examining sewer system inspections, maintenance, and repairs. Our audit identified opportunities for improvement in the following areas: A. Ensuring Projects Remain on Schedule and All Time Extensions and Liquidated Damages Are Properly Supported and Documented B. Improving Adherence to Change Directives Process and Ensuring Change Orders Are Properly Documented, Analyzed, and Tracked C. Implementing Better Performance Management for Consultants and Contractors
The Audit Committee recommends that: 1. City Council request the General Manager, Toronto Water, to minimize project delays by actively monitoring, analyzing, and documenting the root causes and trends of delays. 2. City Council request the General Manager, Toronto Water, to: a. clarify consultants' scope of work and deliverables in the contract, and City policies and procedures to provide clearer guidance on evaluating time extension requests, including requiring contractors to submit substantiating documentation, and requiring consultants to fully review and validate these requests through delay analysis before consideration by the Capital Works Delivery project manager; and b. ensure that contractors attach all required documentation and consultants sufficiently document rationale to approve time extensions in accordance with the updated contract terms, City policies and procedures. 3. City Council request the General Manager, Toronto Water, to: a. ensure Capital Works Delivery project managers and external consultants follow City contract terms, policies, and procedures, relating to documenting the rationale for assessing or not assessing liquidated damages or delay claims; and b. improve the tracking and reconciling of delay days, clearly identifying who is responsible for the delays, to support the enforcement of liquidated damages. 4. City Council request the General Manager, Toronto Water, to: a. require consultants to use the City's standard change directive form before extra work begins, as required by the City's policies and procedures; and b. provide annual training or refreshers to project managers on Capital Works Delivery's Standard Operating Procedures and the manual. 5. City Council request the General Manager, Toronto Water, to: a. ensure consultants include all supporting documentation as required for review when submitting change order packages; b. ensure consultants follow up with contractors when the contractual deadline to submit change order request is exceeded; c. set an appropriate timeline for consultants to review and prepare change order packages for approval and ensure Capital Works Delivery project managers follow up with consultants when the timeline is exceeded; and d. review consultants' work more thoroughly on a sample basis to ensure quality of consultants' review and communicate the results in consultants' performance evaluations. 6. City Council request the City Manager to require all City Divisions to keep appropriate capital project information up-to-date in the City's T.O.INview database, and request relevant City Agencies and Corporations to reinforce or develop processes, to provide the City with timely and accurate capital project information to improve coordination among stakeholders. 7. City Council request the General Manager, Toronto Water, to: a. explore opportunities, in consultation with the City's Chief Technology Officer, to accelerate the implementation of Trimble Unity Construct, a new project management information system, to analyze change order categories and incorporate them into lessons learned to better monitor current and future projects; and b. enhance inter-divisional coordination, in consultation with the General Manager, Transportation Services Division, and implement improvements to the Road Disruption Activity Reporting System to support improved capital planning and delivery outcomes, including reducing delays of awarded construction contracts, through mechanisms such as multi-site permitting. 8. City Council request the General Manager, Toronto Water, to: a. ensure that the mark-up requirements are clearly communicated in the contract and clarified with the contractor and consultant at the start of the project; b. assess whether mark-ups were correctly charged in accordance with contract terms for other change orders and identify any other projects that may be affected; and c. strengthen the consultants and Capital Works Delivery project managers' review of mark-up on change orders to ensure compliance with the contract terms. 9. City Council request the General Manager, Toronto Water, in consultation with Legal Services, Purchasing and Materials Management Division, and Engineering and Construction Services, to review and assess the need to update City policies and procedures and training to provide guidance to project managers on when to consider adding a price adjustment mechanism in contracts for the projects they manage. 10. City Council request the General Manager, Toronto Water, to. a. clearly and consistently communicate inspection reporting requirements in the contracts and ensure they align with the manual; b. ensure consultants document their inspection in accordance with the manual; c. establish routine spot checks to ensure projects managed by the Capital Works Delivery unit are receiving adequate on-site inspection services from consultants, and that inspection records are complete, accurate, and regularly retained by City staff; d. strengthen Capital Works Delivery project manager oversight of consultant responses to Request for Information and other submissions to ensure timely responses to contractors; and e. ensure contractors and consultants provide all required documentation with their progress payment applications, in compliance with the contract requirements. 11. City Council request the General Manager, Toronto Water, to: a. ensure the project managers complete contractors' and consultants' performance evaluations in accordance with the contract and City policies and procedures; b. clarify with consultants the number and frequency of contractors' performance evaluations required; c. explore opportunities to incorporate the evaluation scores of consultants and contractors into future bid evaluations, in consultation with the Chief Procurement Officer and Legal Services; and d. conduct a cost and benefit analysis to assess the optimal balance between using consultants and in-house staff for certain site inspection and contract administrative activities. 12. City Council request the General Manager, Toronto Water, to: a. consider developing additional key performance indicators and incorporating them into contracts to establish performance standards for both consultants and contractors to encourage their performance, in consultation with Purchasing and Materials Management Division, Strategic Capital Coordination Office, and Engineering and Construction Services; and b. develop and monitor key performance indicators at the program level for the Capital Works Delivery unit, including key performance indicators that focus on change order and schedule management, and client unit satisfaction. 13. City Council request the City Manager to forward this report to all City divisions, agencies, and corporations for review. 14. City Council request the heads of City Divisions, Agencies and Corporations review the issues and recommendations included in this report and consider the relevance to their respective organizations for implementation. 15. City Council request the Deputy City Manager, Infrastructure Services, to report to the February 12, 2026 Audit Committee on: a. the basis of requests for Paid-duty Officers for Toronto Water, TTC and Transportation Services projects and provide examples of common instructions provided to Paid-duty Officers; and b. alternative options for the use of Paid-duty Officers.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the General Manager, Toronto Water, to minimize project delays by actively monitoring, analyzing, and documenting the root causes and trends of delays. 2. City Council request the General Manager, Toronto Water, to: a. clarify consultants' scope of work and deliverables in the contract, and City policies and procedures to provide clearer guidance on evaluating time extension requests, including requiring contractors to submit substantiating documentation, and requiring consultants to fully review and validate these requests through delay analysis before consideration by the Capital Works Delivery project manager; and b. ensure that contractors attach all required documentation and consultants sufficiently document rationale to approve time extensions in accordance with the updated contract terms, City policies and procedures. 3. City Council request the General Manager, Toronto Water, to: a. ensure Capital Works Delivery project managers and external consultants follow City contract terms, policies, and procedures, relating to documenting the rationale for assessing or not assessing liquidated damages or delay claims; and b. improve the tracking and reconciling of delay days, clearly identifying who is responsible for the delays, to support the enforcement of liquidated damages. 4. City Council request the General Manager, Toronto Water, to: a. require consultants to use the City's standard change directive form before extra work begins, as required by the City's policies and procedures; and b. provide annual training or refreshers to project managers on Capital Works Delivery's Standard Operating Procedures and the manual. 5. City Council request the General Manager, Toronto Water, to: a. ensure consultants include all supporting documentation as required for review when submitting change order packages; b. ensure consultants follow up with contractors when the contractual deadline to submit change order request is exceeded; c. set an appropriate timeline for consultants to review and prepare change order packages for approval and ensure Capital Works Delivery project managers follow up with consultants when the timeline is exceeded; and d. review consultants' work more thoroughly on a sample basis to ensure quality of consultants' review and communicate the results in consultants' performance evaluations. 6. City Council request the City Manager to require all City Divisions to keep appropriate capital project information up-to-date in the City's T.O.INview database, and request relevant City Agencies and Corporations to reinforce or develop processes, to provide the City with timely and accurate capital project information to improve coordination among stakeholders. 7. City Council request the General Manager, Toronto Water, to: a. explore opportunities, in consultation with the City's Chief Technology Officer, to accelerate the implementation of Trimble Unity Construct, a new project management information system, to analyze change order categories and incorporate them into lessons learned to better monitor current and future projects; and b. enhance inter-divisional coordination, in consultation with the General Manager, Transportation Services Division, and implement improvements to the Road Disruption Activity Reporting System to support improved capital planning and delivery outcomes, including reducing delays of awarded construction contracts, through mechanisms such as multi-site permitting. 8. City Council request the General Manager, Toronto Water, to: a. ensure that the mark-up requirements are clearly communicated in the contract and clarified with the contractor and consultant at the start of the project; b. assess whether mark-ups were correctly charged in accordance with contract terms for other change orders and identify any other projects that may be affected; and c. strengthen the consultants and Capital Works Delivery project managers' review of mark-up on change orders to ensure compliance with the contract terms. 9. City Council request the General Manager, Toronto Water, in consultation with Legal Services, Purchasing and Materials Management Division, and Engineering and Construction Services, to review and assess the need to update City policies and procedures and training to provide guidance to project managers on when to consider adding a price adjustment mechanism in contracts for the projects they manage. 10. City Council request the General Manager, Toronto Water, to. a. clearly and consistently communicate inspection reporting requirements in the contracts and ensure they align with the manual; b. ensure consultants document their inspection in accordance with the manual; c. establish routine spot checks to ensure projects managed by the Capital Works Delivery unit are receiving adequate on-site inspection services from consultants, and that inspection records are complete, accurate, and regularly retained by City staff; d. strengthen Capital Works Delivery project manager oversight of consultant responses to Request for Information and other submissions to ensure timely responses to contractors; and e. ensure contractors and consultants provide all required documentation with their progress payment applications, in compliance with the contract requirements. 11. City Council request the General Manager, Toronto Water, to: a. ensure the project managers complete contractors' and consultants' performance evaluations in accordance with the contract and City policies and procedures; b. clarify with consultants the number and frequency of contractors' performance evaluations required; c. explore opportunities to incorporate the evaluation scores of consultants and contractors into future bid evaluations, in consultation with the Chief Procurement Officer and Legal Services; and d. conduct a cost and benefit analysis to assess the optimal balance between using consultants and in-house staff for certain site inspection and contract administrative activities. 12. City Council request the General Manager, Toronto Water, to: a. consider developing additional key performance indicators and incorporating them into contracts to establish performance standards for both consultants and contractors to encourage their performance, in consultation with Purchasing and Materials Management Division, Strategic Capital Coordination Office, and Engineering and Construction Services; and b. develop and monitor key performance indicators at the program level for the Capital Works Delivery unit, including key performance indicators that focus on change order and schedule management, and client unit satisfaction.
AU10.4received
At its meeting of June 29, 2020, in item 2020.AU5.7, City Council appointed KPMG LLP as the auditor licensed under the Public Accounting Act, 2004 responsible for annually auditing the accounts and transactions of the City and certain of its local boards and expressing an opinion on the financial statements of these bodies based on the audit. KPMG LLP submits this Management Letter for the City of Toronto with management responses for period ended December 31, 2024.
The Audit Committee: 1. Received the KPMG Management Letter including Management Responses - for the year 2024 ending December 31, 2024 (October 22, 2025) from KPMG LLP for information.
AU10.5adopted
This report responds to the direction from Council and Audit Committee arising from Item AU13.2 and AU1.8. AU 13.2 - The City of Toronto Audit Findings Report for the Year Ended December 31, 2021, as adopted by City Council at its meeting on July 19, 20, 21 and 22, 2022, for the Chief Financial Officer and Treasurer to report to Council on the status of the 55 recommendations in the Management Letter (December 15, 2021) from KPMG LLP. AU 1.8 - Update from the Controller on Action Plans and implementation of recommendations arising from the KPMG Audit for the Year 2020, as adopted at Audit Committee at its meeting on Feb 13, 2023, for the Controller to provide an update on each of outstanding KPMG letters recommendations.
The Audit Committee: 1. Received the report (October 22, 2025) from the Director, Internal Audit, for information.
Staff recommendation as filed
The Chief Financial Officer and the Internal Audit Division recommend that Audit Committee receive this report for information.
AU10.6adopted
Audit of Parks Branch Operations - Phase 1 and 2: November 2025 Status Update
On October 7, 2024, the Auditor General released a report entitled "Audit of Parks Branch Operations - Phase 1: Improving Oversight of Day-to-Day Maintenance Helps to Ensure City Parks are Beautiful, Clean and Safe", which was considered by the Audit Committee on October 15, 2024, and City Council at its meeting on November 13 and 14, 2024. Thereafter, on February 5, 2025, the Auditor General released a report entitled "Audit of Parks Branch Operations - Phase 2: Supporting Vibrant Parks by Improving Park Asset Management and Repair Processes", which was considered by the Audit Committee on February 12, 2025, and City Council at its meeting on March 26 and 27, 2025. City Council subsequently adopted various recommendations aimed at improving how the parks branch performs maintenance operations and repairs to keep parks clean, safe and beautiful. One such recommendation directed Parks and Recreation to report to the Audit Committee in December 2024, as well as July and November 2025 with a status update. This report provides a summary of activities undertaken to date aligned to the Auditor General's recommendations. Since the most recent management update in July 2025, work has advanced including park service request integration with the Customer Experience Division, finalization of Quality Assurance processes related to Daily Activity Sheet accuracy as well as tracking of repair related deficiencies. Upcoming work focusses on the initial rollout of digitization of daily work for crews (fourth quarter). While longer term technological improvements are in development, interim quality assurance processes will provide accountability and compliance aligned to audit recommendations.
The Audit Committee recommends that: 1. City Council receive the report (October 21, 2025) from the Interim General Manager, Parks and Recreation, for information.
Staff recommendation as filed
The General Manager, Parks and Recreation, recommends that: 1. City Council receive this report for information.
AU10.7adopted
Community Centre 55 - 2024 Audited Financial Statements
The purpose of this report is to provide the Audit Committee and City Council with the 2024 audited financial statements of Community Centres. The 2024 audited financial statements for the 10 Community Centres are presented to Audit Committee after approval by their respective Boards of Management. The financial statements for nine Community Centres were previously presented at the July 11, 2025 Audit Committee. This report presents City Council with the Independent Auditor's Report, accompanying financial statements and management control letter for the one remaining Community Centre.
The Audit Committee recommends that: 1. City Council receive the 2024 audited financial statements and management letter, for Community Centre 55 in Attachment 1 to the report (October 20, 2025) from the Auditor General for information.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the 2024 audited financial statements and management letter, for the Community Centre in Attachment 1 to this report for information.
AU10.8amended
The purpose of this report is to provide the Audit Committee and City Council with a status update on the 2024 audited financial statements of Arenas. The 2024 audited financial statements for the eight City Arenas are presented to the Audit Committee after approval by their respective Boards or Committees of Management. The financial statements for two Arenas were previously presented at the July 11, 2025 Audit Committee. At the time of preparation of this report, there were four 2024 audited financial statements available for Arenas. The audits for one entity was awaiting board approval and the remaining one was in progress. Depending on when the audits are completed, the Independent Auditor's Reports, accompanying financial statements and management control letters (if applicable) will be presented at a subsequent meeting of the Audit Committee.
The Audit Committee recommends that: 1. City Council receive the 2024 audited financial statements and management letters, where applicable, for the Arenas in attachments 1 to 4 to the report (October 20, 2025) from the Auditor General for information, as follows: a. Financial Statements and Report to the Board of Management - George Bell Arena b. Financial Statements and Report to the Board of Management - Larry Grossman Forest Hill Memorial Arena c. Financial Statements and Report to the Board of Management - Leaside Memorial Community Gardens Arena d. Financial Statements and Report to the Board of Management - William H. Bolton Arena 2. City Council request the City Manager and appropriate staff to continue engaging with the City's Arena Boards and arena managers to identify opportunities that assist the Arena Boards in addressing the control deficiencies identified by the external auditor, Doane Grant Thornton LLP, in their letter to management (dated October 20, 2025 and Item AU9.15) and report back to Audit Committee with any persistent issues, as appropriate.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the 2024 audited financial statements and management letters, where applicable, for the Arenas in attachments 1 to 4 to this report for information.
AU10.9amended
Utility Construction Photo Documentation
Transportation Services maintains City roads and sidewalks to ensure they remain safe and accessible for all users. Integral to this, the Division must also manage the impacts of utility work, an essential service that supports the daily lives of residents and businesses across Toronto. Each year, Transportation Services issues approximately 35,000 utility cut permits. While utility work is essential to delivering vital services, it can also disrupt traffic and generate public complaints related to noise, dust, and uneven surfaces. As such, effective oversight of the utility cut process is critical to protecting City infrastructure and minimizing public impact. This report provides an update, as requested by City Council (2024.AU9.7), on the recent enhancements to the City's Road Disruption Allowance Control System, which now requires utility companies to submit before-and-after photos of their work and includes photos showcasing utility work completed by contractors in Wards 1, 2, 5, 14 and 23. Having utility companies submit photos of completed work through the online form enhances transparency and supports more efficient compliance monitoring, ultimately improving accountability.
The Audit Committee recommends that: 1. City Council reiterate the request made in Part 15 of its decision on item AU9.7, from July 23 and 24, 2025, to request the General Manager, Transportation Services to provide a list of permits, timing, and sequencing for all of the utility work for the following streets in Ward 14, Toronto - Danforth: a. Woodfield Road, from Dundas Street East to Fairford Avenue; b. Riverdale Avenue, from Broadview Avenue to Carlaw Avenue; c. Grant Street, from Queen Street East to Kintyre Avenue; and d. Danforth Avenue, from Jones Avenue to Ladysmith Avenue, and that City Council direct the General Manager, Transportation Services to report to the February 12, 2026 meeting of Audit Committee with the requested information above. 2. City Council request the General Manager, Transportation Services to report on the removal of pylons following construction, at the February 12, 2026 Audit Committee meeting.
Staff recommendation as filed
The Acting General Manager, Transportation Services recommends that: 1. The Audit Committee receive this report for information.
AU10.10adopted
Business Improvement Areas - Update on the 2024 Audited Financial Statements
The purpose of this report is to present the Audit Committee and City Council with the audited financial statements and management letters of Business Improvement Areas as outlined below: Number of BIAs: Fiscal 2024 Included in this report 50 Approved previously (see Decision History) 13 To be included in future reports 20 Total number of active BIAs 83 All of the audited financial statements included in this report received unqualified audit opinions and have been approved by the Business Improvement Areas' respective Boards of Management (Board). 10 Business Improvement Areas (Cabbagetown, Corso Italia, Downtown Yonge, Hillcrest Village, Weston Village, Liberty Village, Bloor by the Park, Mount Pleasant Village, St. Clair Gardens and Mirvish Village) received recommendations to strengthen internal controls and operations for fiscal 2024. These recommendations are minor in nature and have been accepted by the Business Improvement Areas' management and Board. The remaining 20 audited financial statements for the 2024 fiscal year are in the process of being finalized and will be presented to the Audit Committee and City Council at a future date. During 2025, the Historic Queen Street East Business Improvement Area became active again, and Cedarbrae Markham Lawrence Business Improvement Area and Upper Avenue Business Improvement Area were established. This brings the total number of active Business Improvement Areas in 2025 to 86.
The Audit Committee recommends that: 1. City Council approve the 2024 audited financial statements and management letters of the Business Improvement Areas as attached in Appendices A to BA to the report (October 1, 2025) from the Chief Financial Officer and Treasurer.
Staff recommendation as filed
The Chief Financial Officer and Treasurer recommends that: 1. City Council approve the 2024 audited financial statements and management letters of the Business Improvement Areas as attached in Appendices A to BA to this report.
AU10.11amended
At its meeting on July 18, 2025, the Toronto Community Housing Corporation Board of Directors considered the attached report entitled, "Toronto Community Housing Corporation - 2025 Follow up - Status of Previous Auditor General's Recommendations." The Board adopted the following recommendations, as made in the report: 1. Toronto Community Housing Corporation Building Investment, Finance and Audit Committee and Board of Directors receive this report for information. 2. Toronto Community Housing Corporation Board of Directors forward this report, together with the Auditor General's (June 23, 2021) report, Toronto Community Housing Corporation - Results of 2021 Follow-up of Previous Audit Recommendations, that was received by the Board of Directors at its December 9, 2021 meeting, to City Council to receive the report for information, through the City's Audit Committee.
The Audit Committee recommends that: 1. City Council receive the Report (June 19, 2025) from the Auditor General on Toronto Community Housing Corporation - 2025 Follow-up - Status of Previous Auditor General's Recommendations, and the Report (June 23, 2021) from the Auditor General on Toronto Community Housing Corporation - Results of 2021 Follow-up of Previous Audit Recommendations, for information.
Staff recommendation as filed
Toronto Community Housing Corporation Board of Directors recommends that: 1. City Council receive the report (June 19, 2025) from the Auditor General for information.