Audit Committee
The full agenda, as filed
All 8 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.
AU2.1adopted
This report presents the results of the Auditor General's audit of the redevelopment and revitalization activities of the Toronto Community Housing Corporation (TCHC). The objective of this audit was to evaluate the extent to which TCHC's revitalization program addresses the challenges of providing public social housing and contributes to city-building priorities. TCHC revitalization initiatives are a significant undertaking. They offer the chance to plan and build a community starting from the ground up. The City and TCHC need to strategically align their priorities and desired outcomes for revitalizations and support their achievement with an adequate funding plan. This will not only ensure that existing social housing is replaced, but can also more effectively address other city-building priorities, such as increasing the supply of affordable housing. The issues and recommendations discussed in this report can be categorized into three broad themes: 1. The City has an opportunity to address its key priorities within TCHC revitalizations, such as increasing the supply of affordable housing. Successfully addressing multiple city-building objectives through site redevelopment requires the City to coordinate key priorities, raise the visibility of the funding issues and ensure there is a plan to achieve overall desired outcomes. To do this, a broader, more integrated approach for the City as a whole - not for TCHC alone - is needed. 2. In recommending revitalization priorities and establishing funding strategies, TCHC and the City should work together to create a formal development strategy. They should also establish ways to measure the outcome-focused goals to be set out in the strategy and evaluate and report on outcomes achieved for each revitalization phase. Given the significant financial pressures it is facing, TCHC can support ongoing oversight and raise the visibility of the funding required from City Council and others by enhancing the transparency and timeliness of reporting throughout the span of revitalizations. 3. TCHC can further enhance processes and controls related to selecting its development partners. Our audit makes 23 recommendations that will help the City and TCHC work together to achieve broader city-building objectives and will improve accountability for the outcomes of revitalizations. It will also help TCHC to enhance its procurement practices related to real estate transactions. Management has agreed to all our recommendations and has already taken steps to start implementing them. Although other agencies and corporations were not within the scope of our audit, this report contains a number of findings and recommendations that may be relevant to them. This report should be forwarded to these agencies and corporations so that they may consider it and take any actions they deem necessary.
The Audit Committee recommends that: 1. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to make recommendations to City Council regarding city-building objectives that will be addressed through TCHC revitalizations, and the related funding requirements to achieve those objectives, prior to proceeding with future revitalizations and/or phases that have yet to obtain planning approvals and Shareholder consent. 2. City Council request the City Manager, in consultation with the Director, Affordable Housing Office, and the General Manager, Shelter, Support & Housing Administration, as part of the City's strategy for addressing housing affordability, to: a. evaluate efficient and cost-effective ways to increase the supply of affordable housing units with adequate consideration of broader social factors and public policy objectives; b. make recommendations to City Council, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), on whether more affordable housing units should be required in future TCHC revitalizations based on a site-by-site evaluation of financial and social implications. 3. City Council request the Chief Planner and Executive Director, City Planning, to: a. review the Official Plan Policy 3.2.1.9(b) for appropriateness and practicality, and make recommendations to Council on any necessary amendments; and b. ensure that the Official Plan Policy 3.2.1.9(b) (or any subsequent amendment) is applied consistently on all future large site development applications. Where applicants seek amendments from this policy, City Planning should clearly explain the rationale and analysis for the amendments, and provide alternatives for achieving new affordable housing in its reports. 4. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation and other relevant stakeholders, to evaluate the impacts of requiring that new affordable housing be provided by developers in any real estate development transactions. Such evaluation should consider the financial implications and/or trade-offs to the City as a whole, as well as potential incentives and strategies that can make providing affordable housing more attractive to potential developers. 5. City Council request the Executive Director, Social Development, Finance & Administration, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to ensure that TCHC's long-term development capital and operating needs for revitalizations are considered as part of developing a long-term permanent funding model. 6. City Council request the City Manager to ask the Boards of CreateTO and Toronto Community Housing Corporation to ensure these organizations increase collaboration and consultation with a view to improving the function of each organization independently in the short-term. Such work should commence as soon as possible. 7. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation, to bring forth recommendations to clarify the Shareholder Direction to Toronto Community Housing Corporation with respect to the City's approval and ongoing oversight of revitalizations, specifically: a. the timing and scope of approvals, including objectives and priorities for the revitalization; and b. the level of detailed reporting required annually on project progress, capital budget variances, updated forecasts and adherence with the Council-approved strategic direction and principles, including barriers and challenges. 8. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation, to report the outcomes (short, medium, and long-term) achieved at the completion of each phase of revitalization projects in order to demonstrate the overall financial and non-financial stakeholder impacts. Such reports be completed as soon as practicable following the completion of each phase of a project. 9. City Council request the Toronto Community Housing Corporation Board to report annually to City Council through the City Manager and the City's Chief Financial Officer on the long-term building repair and development capital plans, including funding sources and any unfunded amounts the City needs to include in its Capital Plan. 10. City Council request the City's Chief Financial Officer to ensure the City's 10-Year Capital Plan includes Toronto Community Housing Corporation's building capital repair and revitalization projects and identify shortfalls to be included in the overall city unfunded projects list. In addition, the City needs to identify any associated debt that needs to be included in the City's debt service targets. 11. City Council request the City Manager to forward the report (March 28, 2019) from the Auditor General to other major agencies and corporations for their review and consideration of the relevance of the recommendations to their respective organizations.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to make recommendations to City Council regarding city-building objectives that will be addressed through TCHC revitalizations, and the related funding requirements to achieve those objectives, prior to proceeding with future revitalizations and/or phases that have yet to obtain planning approvals and Shareholder consent. 2. City Council request the City Manager, in consultation with the Director, Affordable Housing Office, and the General Manager, Shelter, Support & Housing Administration Division, as part of the City's strategy for addressing housing affordability, to: a. evaluate efficient and cost-effective ways to increase the supply of affordable housing units with adequate consideration of broader social factors and public policy objectives; b. make recommendations to City Council, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), on whether more affordable housing units should be required in future TCHC revitalizations based on a site-by-site evaluation of financial and social implications. 3. City Council request the Chief Planner and Executive Director, City Planning, to: a. review the Official Plan Policy 3.2.1.9(b) for appropriateness and practicality, and make recommendations to Council on any necessary amendments; and b. ensure that the Official Plan Policy 3.2.1.9(b) (or any subsequent amendment) is applied consistently on all future large site development applications. Where applicants seek amendments from this policy, City Planning should clearly explain the rationale and analysis for the amendments, and provide alternatives for achieving new affordable housing in its reports. 4. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation and other relevant stakeholders, to evaluate the impacts of requiring that new affordable housing be provided by developers in any real estate development transactions. Such evaluation should consider the financial implications and/or trade-offs to the City as a whole, as well as potential incentives and strategies that can make providing affordable housing more attractive to potential developers. 5. City Council request the Executive Director, Social Development, Finance & Administration, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to ensure that TCHC's long-term development capital and operating needs for revitalizations are considered as part of developing a long-term permanent funding model. 6. City Council request the City Manager to ask the Boards of CreateTO and Toronto Community Housing Corporation to ensure these organizations increase collaboration and consultation with a view to improving the function of each organization independently in the short-term. Such work should commence as soon as possible. 7. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to periodically review and benchmark its risk tolerance for development transactions with other relevant organizations including the City and CreateTO; and, recommend criteria for evaluating risk / return trade-off to ensure that future real estate transactions align with the City's risk appetite. 8. The Board request the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), in consultation with the City Manager, to formalize TCHC's Development Strategy and report to City Council through the City Manager to seek input and endorsement thereof. The Strategy should: a. include clear revitalization program objectives and performance measures for future developments; b. include short-, medium-, and long-term goals that are outcome-oriented; and c. support overall city-building priorities, where possible. 9. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation, to bring forth recommendations to clarify the Shareholder Direction to Toronto Community Housing Corporation with respect to the City's approval and ongoing oversight of revitalizations, specifically: a. the timing and scope of approvals, including objectives and priorities for the revitalization; and b. the level of detailed reporting required annually on project progress, capital budget variances, updated forecasts and adherence with the Council-approved strategic direction and principles, including barriers and challenges. 10. City Council request the City Manager, in consultation with the Chief Executive Officer, Toronto Community Housing Corporation, to report the outcomes (short, medium, and long-term) achieved at the completion of each phase of revitalization projects in order to demonstrate the overall financial and non-financial stakeholder impacts. Such reports be completed as soon as practicable following the completion of each phase of a project. 11. City Council request the Toronto Community Housing Corporation Board to report annually to City Council through the City Manager and the City's Chief Financial Officer on the long-term building repair and development capital plans, including funding sources and any unfunded amounts the City needs to include in its Capital Plan. 12. City Council request the City's Chief Financial Officer to ensure the City's 10-Year Capital Plan includes Toronto Community Housing Corporation's building capital repair and revitalization projects and identify shortfalls to be included in the overall city unfunded projects list. In addition, the City needs to identify any associated debt that needs to be included in the City's debt service targets. 13. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to ensure that all likely capital and operating costs and cost avoidances, be reasonably estimated and reported all together when recommending the business case and anchor business plans (including amendments if there are significant changes) for new revitalizations. Where costs cannot be estimated, but the budget may be impacted, then at minimum, such costs should be discussed qualitatively. 14. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to implement regular status reporting for each revitalization project. At minimum, the frequency and extent of such reporting should be based on thresholds developed for the following elements: a. total cost; b. spending to date; c. total committed funding; d. total unfunded requirements; and e. timeline projections. 15. The Board request the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to: a. implement negotiation protocols for soliciting and evaluating clarifications and improvements to terms in development partner proposals in order to ensure TCHC is obtaining proponents' best and final offers during the final round of negotiations; and b. ensure protocols describe the documentation that needs to be prepared and retained. 16. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to ensure that the significant negotiated terms, and the financial impacts, are fully described and compared when recommending a development partner for future projects. 17. The Board request the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to: a. ensure the financial terms of both initial and final offers are analyzed and evaluated on a discounted cash flow basis to reflect the timing of cash flows and TCHC's cost of capital; and b. ensure key assumptions and underlying estimates are documented and retained. 18. The Board request the Chief Executive Officer, Toronto Community Housing Corporation (TCHC), to ensure that TCHC's final profit share reflects any necessary adjustments for construction costs of the retail space purchased by the development partner. 19. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to use certified appraisals to determine the fair market value of the land prior to marketing revitalization opportunities to potential proponents. 20. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to ensure that terms of reference for market analyses and/or appraisals is documented and retained. 21. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to enhance the Procurement Policy to address the specific processes and procedures relevant to real estate transactions. Such policy enhancements should be implemented as soon as possible. 22. The Board request the Chief Executive Officer, Toronto Community Housing Corporation, to retain sufficient and appropriate documentation in order to adequately support development related decisions. 23. City Council request the City Manager to forward this report to other major agencies and corporations for their review and consideration of the relevance of the recommendations to their respective organizations.
AU2.2amended
Fleet Services Operational Review - Phase One: Lengthy Downtime Requires Immediate Attention
The Auditor General has completed Phase One of its audit of the Fleet Services Division. Its findings are presented in two reports. This report focuses on vehicle service downtime and how it affects the City's day to day operations. A separate report addresses vehicle utilization and whether the City's fleet is being effectively utilized. The key findings from the audit are: Downtime is the amount of time a vehicle is out of service due to maintenance or repair. From 2015 to 2018, the City fleet's downtime remained lengthy and far from Fleet Services' own targets. In particular, one-fifth of the medium and one-third of the heavy duty vehicles were out of service daily in January and February 2019. Delays in receiving parts is a major reason causing prolonged downtime. Fleet Services buys approximately $6 million per year in parts from its parts supplier. Only 21 per cent of parts requested were supplied at the point of purchase - significantly lower than the 85 per cent stipulated in the contract. Fleet staff sometimes needed to wait for more than a week to receive parts. We recognize that the M5 Parts Request Module was implemented in July 2018, and there could be fine-tuning of data in subsequent months. However, in our view, the extent of the discrepancy observed is so significant that it points to issues beyond system fine-tuning. The process to acquire maintenance services from external vendors is cumbersome due to delays in scheduling service, approving estimates by Fleet staff, vehicle pickup and drop-off, and invoice payment. These delays and inefficiencies add to vehicle downtime. Of the $680,000 worth of parts that failed within their warranty terms, only 10 per cent were claimed for warranty by Fleet Services. If it had claimed warranties for 80 per cent of the parts and a portion of its labour costs, it could have potentially saved $400,000 per year. This report provides 14 recommendations to help reduce vehicle downtime, strengthen warranty administration, and improve the efficiency and effectiveness of the City's overall fleet maintenance operations.
The Audit Committee recommends that: 1. City Council request the General Manager, Fleet Services Division, to take the necessary steps to shorten vehicle and equipment downtime and achieve the downtime target set out in the Division's 2016 Alternate Service Delivery model report. 2. City Council request the General Manager, Fleet Services Division, to take steps to improve its preventive maintenance ratio to reduce overall fleet maintenance cost. 3. City Council request the General Manager, Fleet Services Division, to take the necessary steps to improve the fill rates by the parts supplier to help reduce vehicle downtime. Steps to be taken should include, but not be limited to: a. ensuring the supplier's calculation of fill rate is consistent with requirements specified in the contract b. periodically reviewing the part inventory to ensure that frequently used parts are stocked to shorten vehicle turnaround time c. regularly monitoring the part supplier's inventory fill rate and enforce the incentive/disincentive clause of the part contract d. making sure future contracts for parts procurement incorporate an effective penalty clause to encourage contract compliance. 4. City Council request the General Manager, Fleet Services Division, to explore ways that can help reduce vehicle downtime including an assessment of: a. internal staffing capacity to meet work demands b. options that will help expedite service times for minor repairs, particularly for City yards with a large number of concentrated vehicles. 5. City Council request the General Manager, Fleet Services Division, to implement processes to identify and monitor repair quality issues, to reduce repeated repairs and downtime. 6. City Council request the General Manager, Fleet Services Division, to review and address the logistics issues in procuring and approving contracted maintenance and repair services to reduce vehicle downtime. Steps to be taken should include: a. setting customer turnaround time target for responding to service request b. clarifying vehicle delivery and return procedures, and providing additional guidance or communication to the divisions and garage staff c. negotiating with vendors to expand shuttle service to designated City yards to facilitate direct transportation of vehicles to / from vendors where feasible d. expediting the estimate approval process by Fleet staff e. improving the ease of providing vehicle maintenance history to external vendors. 7. City Council request the General Manager, Fleet Services Division, to consider running a pilot program to assess the feasibility and merits of realigning Contract Coordinator and Research Analyst shift schedules with external vendor and internal user group operating hours. 8. City Council request the General Manager, Fleet Services Division, to expedite clearing of the Division's backlog of outstanding invoice payments. 9. City Council request the General Manager, Fleet Services Division, to work with Corporate Accounts Payable to design and implement a process that balances control risks with the City's need to pay invoices in a timely manner. 10. City Council request the General Manager, Fleet Services Division, to review its contracted capacity and work demand with a goal to retain a sufficient number of qualified vendors to effectively meet its vehicle service needs. 11. City Council request the General Manager, Fleet Services Division, to monitor its external vendor spending and where opportunities are identified, initiate tendering processes to obtain more competitive rates. 12. City Council request the General Manager, Fleet Services Division, to provide additional guidance on the vendor audit process including target coverage, selection method, audit process, and results tracking, to ensure the consistency and effectiveness of the process. 13. City Council request the General Manager, Fleet Services Division, to take steps to maximize warranty claims for parts and labour costs. Steps to be taken should include, but not be limited to: a. setting a performance target for warranty claims and periodically measuring warranty effort against the target b. allocating appropriate staff resources to adequately review and monitor the parts supplier's administration of aftermarket part and labour warranty claims c. making sure the warranty data in M5 are accurate and complete d. providing training to Fleet maintenance staff on policies and procedures pertaining to warranty claims. 14. City Council request the City Manager to forward the report (April 26, 2019) from the Auditor General to Division Heads and Chief Executive Officers of City agencies and corporations with fleet management operations, and request them to review and consider implementing the recommendations that are relevant to their respective operations and take steps to improve vehicle retrieval times following service.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the General Manager, Fleet Services Division, to take the necessary steps to shorten vehicle and equipment downtime and achieve the downtime target set out in the Division's 2016 Alternate Service Delivery model report. 2. City Council request the General Manager, Fleet Services Division, to take steps to improve its preventive maintenance ratio to reduce overall fleet maintenance cost. 3. City Council request the General Manager, Fleet Services Division, to take the necessary steps to improve the fill rates by the parts supplier to help reduce vehicle downtime. Steps to be taken should include, but not be limited to: a. ensuring the supplier's calculation of fill rate is consistent with requirements specified in the contract b. periodically reviewing the part inventory to ensure that frequently used parts are stocked to shorten vehicle turnaround time c. regularly monitoring the part supplier's inventory fill rate and enforce the incentive/disincentive clause of the part contract d. making sure future contracts for parts procurement incorporate an effective penalty clause to encourage contract compliance. 4. City Council request the General Manager, Fleet Services Division, to explore ways that can help reduce vehicle downtime including an assessment of: a. internal staffing capacity to meet work demands b. options that will help expedite service times for minor repairs, particularly for City yards with a large number of concentrated vehicles. 5. City Council request the General Manager, Fleet Services Division, to implement processes to identify and monitor repair quality issues, to reduce repeated repairs and downtime. 6. City Council request the General Manager, Fleet Services Division, to review and address the logistics issues in procuring and approving contracted maintenance and repair services to reduce vehicle downtime. Steps to be taken should include: a. setting customer turnaround time target for responding to service request b. clarifying vehicle delivery and return procedures, and providing additional guidance or communication to the divisions and garage staff c. negotiating with vendors to expand shuttle service to designated City yards to facilitate direct transportation of vehicles to / from vendors where feasible d. expediting the estimate approval process by Fleet staff e. improving the ease of providing vehicle maintenance history to external vendors. 7. City Council request the General Manager, Fleet Services Division, to consider running a pilot program to assess the feasibility and merits of realigning Contract Coordinator and Research Analyst shift schedules with external vendor and internal user group operating hours. 8. City Council request the General Manager, Fleet Services Division, to expedite clearing of the Division's backlog of outstanding invoice payments. 9. City Council request the General Manager, Fleet Services Division, to work with Corporate Accounts Payable to design and implement a process that balances control risks with the City's need to pay invoices in a timely manner. 10. City Council request the General Manager, Fleet Services Division, to review its contracted capacity and work demand with a goal to retain a sufficient number of qualified vendors to effectively meet its vehicle service needs. 11. City Council request the General Manager, Fleet Services Division, to monitor its external vendor spending and where opportunities are identified, initiate tendering processes to obtain more competitive rates. 12. City Council request the General Manager, Fleet Services Division, to provide additional guidance on the vendor audit process including target coverage, selection method, audit process, and results tracking, to ensure the consistency and effectiveness of the process. 13. City Council request the General Manager, Fleet Services Division, to take steps to maximize warranty claims for parts and labour costs. Steps to be taken should include, but not be limited to: a. setting a performance target for warranty claims and periodically measuring warranty effort against the target b. allocating appropriate staff resources to adequately review and monitor the parts supplier's administration of aftermarket part and labour warranty claims c. making sure the warranty data in M5 are accurate and complete d. providing training to Fleet maintenance staff on policies and procedures pertaining to warranty claims. 14. City Council request the City Manager to forward this report to Division Heads and Chief Executive Officers of City agencies and corporations with fleet management operations, and request them to review and consider implementing the recommendations that are relevant to their respective operations.
AU2.3amended
The Auditor General has completed Phase One of its audit of the Fleet Services Division. Its findings are presented in two reports. This report addresses vehicle utilization and whether the City's fleet is being effectively utilized. A separate report focuses on vehicle service downtime and how it affects the City's day to day operations. The key findings from the audit are: Using an annual threshold of 5,000 km or 125 engine hours, we identified 230 underutilized vehicles in 2018 from 15 City divisions and one corporation. This represents 18 per cent of the light duty vehicles, up from 15 per cent in 2017. The City paid approximately $10 million to purchase these vehicles, in addition to $314,000 in 2018 to maintain them. The City reimburses staff who use their personal vehicles for work. We found that the divisions and corporation with large numbers of underutilized vehicles also paid a substantial amount of km reimbursement costs. In 2018, this totalled $1.5 million for six divisions and one corporation. Ninety-two (92) staff were reimbursed for over 5,000 km, averaging $3,600 each. The issue of underutilized vehicles is not new, and has been raised by the Auditor General on multiple occasions since 2004. While Fleet Services Division has taken action to analyze and identify underutilized vehicles, decision making has remained with individual user divisions. There is a need for stronger corporate oversight to ensure the most cost-effective fleet options are used across the City, and to maximize the use of car sharing and pooling opportunities, where feasible.
The Audit Committee recommends that: 1. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to: a. review and minimize the number of underutilized vehicles, including implementing car share and pooling programs using City owned vehicles where cost and operationally effective; and b. maximize the use of the City's available fleet. 2. City Council request the General Manager, Fleet Services Division, to amend its policy to include Class 2 light duty vehicles in its annual analysis and list of underutilized vehicles for user divisions to review and comment. 3. City Council request the City Manager to forward the report (April 16, 2019) from the Auditor General to Division Heads and Chief Executive Officers of City agencies and corporations with fleet management operations, and request them to review and consider implementing the recommendation relevant to their respective operations. 4. City Council request the City Manager to report to the General Government and Licensing Committee on the feasibility and cost benefits of options that can minimize reimbursements to staff for personal vehicle use to achieve the best overall value for the City.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to: a. review and minimize the number of underutilized vehicles, including implementing car share and pooling programs using City owned vehicles where cost and operationally effective; and b. maximize the use of the City's available fleet. 2. City Council request the General Manager, Fleet Services Division, to amend its policy to include Class 2 light duty vehicles in its annual analysis and list of underutilized vehicles for user divisions to review and comment. 3. City Council request the City Manager to forward this report to Division Heads and Chief Executive Officers of City agencies and corporations with fleet management operations, and request them to review and consider implementing the recommendation relevant to their respective operations.
AU2.4amended
Review of Urban Forestry - Ensuring Value for Money for Tree Maintenance Services
The Auditor General has completed her audit of Urban Forestry and provided two audit reports. The first audit report was issued in June 2018 relating to the permit issuance and tree by-law enforcement function. This second audit report focuses on the tree planting and maintenance services. The key findings from the audit report are: Urban Forestry requires each contractor and City crew to complete a daily log detailing the maintenance work performed and all other work-related activities within their eight-hour shift. The daily logs serve as the proof of work performed by the crews, and Urban Forestry pays the contractors according to work hours reported in their daily logs. Part of our audit included a comparison of the daily logs with the contractor crews' vehicle Global Positioning System (GPS) reports. We could not conduct the same comparative analysis for City crews because Urban Forestry's vehicles are not equipped with a GPS system. We compared a sample of 45 contractor crews' daily logs with their vehicle GPS records and noted 28 of them contain one or both of the following issues: Crews' vehicles did not stop near the tree service locations. Vehicles went to locations that were not related to the assigned tree service locations (e.g., coffee shops, plazas, residential houses, streets with no trees), and these locations were not noted in their daily logs. The total time spent at these locations far exceeded the allowable 60 minutes for lunch and breaks. This could mean that part of the 8-hour work paid by the City was not spent on City work related activities. The estimated potential loss in productivity is approximately $2.6 million per year. Also, if an inaccurate maintenance record is created for a tree in Urban Forestry's system, this could have adverse long-term effects because it may be at least another seven years before the tree receives the next scheduled maintenance. After deducting the average time spent on supporting activities, the on-site tree maintenance time for the 28 contractor crews' daily logs averaged 4.5 hours, of which 1.7 reported work hours were not supported by the GPS reports, leaving only 2.8 hours for tree maintenance work for the City. We reviewed a sample of 139 daily logs from the City and contractor crews and noted 57 logs (41 per cent) have missing data or contain entries that should have been questioned. While some of these entries might be valid, none of them were identified by the Foreperson's review. This report provides 10 recommendations to help Urban Forestry improve its contract management, customer service and operational efficiency for its tree planting and maintenance programs.
The Audit Committee recommends that: 1. City Council request the General Manager, Parks, Forestry and Recreation Division, to take the necessary steps to ensure the City only pays for legitimate tree maintenance work that has been performed by contractor crews in accordance with the contractual terms. Such steps should include, but not be limited to, a regular review of a sample of contractor crews' Daily Work Activity Reports (daily logs) with the Global Positioning System (GPS) reports to: a. identify questionable records b. follow up on the discrepancies c. identify high-risk crews for further review and follow-up. 2. City Council request the General Manager, Parks, Forestry and Recreation Division, to consider installing a Global Positioning System (GPS) tracking system on the vehicles used by Urban Forestry staff for tree maintenance activities. 3. City Council request the General Manager, Parks, Forestry and Recreation Division, to require supervisory staff to conduct thorough reviews of Daily Work Activity Report (daily logs) from both City crews and contractor crews to identify duplicated and questionable tree maintenance activities. 4. City Council request the General Manager, Parks, Forestry and Recreation Division, to improve the effectiveness of on-site and quality control inspections for monitoring daily tree maintenance work by City and contractor crews by: a. ensuring compliance with the required minimum inspection numbers in all regional offices b. ensuring inspections are conducted by staff on a surprise basis c. performing random on-site inspections at different times of a work day. 5. City Council request the General Manager, Parks, Forestry and Recreation Division, to review the time spent by tree maintenance crews on supporting activities with a view to maximizing the actual onsite tree maintenance time. Consideration should be given to: a. undertaking steps to reduce time spent on moving or towing parked vehicles on streets obstructing the scheduled tree maintenance activities b. assessing the feasibility of installing a woodchip compound in more City yards to reduce driving time for wood disposal c. assessing ways to reduce wait time for crews at the City yards, particularly at the end of each shift. 6. City Council request the General Manager, Parks, Forestry and Recreation Division, to assess whether the new system procedure is effective in minimizing unnecessary maintenance work performed by City and contractor crews on trees that are still under warranty. 7. City Council request the General Manager, Parks, Forestry and Recreation Division, to further improve the compliance levels with tree planting and maintenance service standards. Steps to be taken should include regular review of exception reports by management to identify the outstanding service requests and requests that remain open near the end of the service standard period. 8. City Council request the General Manager, Parks, Forestry and Recreation Division, to systematically and accurately track all necessary service request data for the arterial road and park tree planting programs, including recording of all incoming requests and request dates, and analyze the data to accurately assess compliance with the service standards. 9. City Council request the General Manager, Parks, Forestry and Recreation Division, to take the necessary steps to ensure City trees removed by Urban Forestry are replanted where suitable. Such steps should include, but not be limited to: a. periodic reviews of tree removal records in conjunction with tree planting records to identify missed tree replacements b. ensuring that the new Work Management System has the ability to automatically generate a planting service request or at least flag a planting opportunity when a City tree has been removed. 10. City Council request the General Manager, Parks, Forestry and Recreation Division, to further expand its efforts to coordinate and consolidate tree planting activities and contracts with other divisions and agencies and corporations, where feasible. 11. City Council direct the General Manager, Parks, Forestry and Recreation, in consultation with the City Solicitor and the Chief Purchasing Officer, to conduct a review of the tree maintenance contracts referenced in the report (April 26, 2019) from the Auditor General, in order to determine if the City can pursue legal action against the vendors to recover any money, or to consider suspending any of the vendors from future work. The review should include, but not limited to, a review of the vendor's work logs and associated GPS records to review the accuracy of work logs, confirm work completed and identify discrepancies. 12. City Council direct the General Manager, Parks, Forestry and Recreation, to investigate and report to the Audit Committee on the feasibility of coordinating tree maintenance with Toronto Hydro and leveraging their best practices. 13. City Council direct the General Manager, Parks, Forestry and Recreation, to report to the Audit Committee in Q4 of 2019 with a status update, and again in one year to provide a further update on results of the review of City vendor work logs and associated GPS records.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the General Manager, Parks, Forestry and Recreation Division, to take the necessary steps to ensure the City only pays for legitimate tree maintenance work that has been performed by contractor crews in accordance with the contractual terms. Such steps should include, but not be limited to, a regular review of a sample of contractor crews' Daily Work Activity Reports (daily logs) with the Global Positioning System (GPS) reports to: a. identify questionable records b. follow up on the discrepancies c. identify high-risk crews for further review and follow-up. 2. City Council request the General Manager, Parks, Forestry and Recreation Division, to consider installing a Global Positioning System (GPS) tracking system on the vehicles used by Urban Forestry staff for tree maintenance activities. 3. City Council request the General Manager, Parks, Forestry and Recreation Division, to require supervisory staff to conduct thorough reviews of Daily Work Activity Report (daily logs) from both City crews and contractor crews to identify duplicated and questionable tree maintenance activities. 4. City Council request the General Manager, Parks, Forestry and Recreation Division, to improve the effectiveness of on-site and quality control inspections for monitoring daily tree maintenance work by City and contractor crews by: a. ensuring compliance with the required minimum inspection numbers in all regional offices b. ensuring inspections are conducted by staff on a surprise basis c. performing random on-site inspections at different times of a work day. 5. City Council request the General Manager, Parks, Forestry and Recreation Division, to review the time spent by tree maintenance crews on supporting activities with a view to maximizing the actual onsite tree maintenance time. Consideration should be given to: a. undertaking steps to reduce time spent on moving or towing parked vehicles on streets obstructing the scheduled tree maintenance activities b. assessing the feasibility of installing a woodchip compound in more City yards to reduce driving time for wood disposal c. assessing ways to reduce wait time for crews at the City yards, particularly at the end of each shift. 6. City Council request the General Manager, Parks, Forestry and Recreation Division, to assess whether the new system procedure is effective in minimizing unnecessary maintenance work performed by City and contractor crews on trees that are still under warranty. 7. City Council request the General Manager, Parks, Forestry and Recreation Division, to further improve the compliance levels with tree planting and maintenance service standards. Steps to be taken should include regular review of exception reports by management to identify the outstanding service requests and requests that remain open near the end of the service standard period. 8. City Council request the General Manager, Parks, Forestry and Recreation Division, to systematically and accurately track all necessary service request data for the arterial road and park tree planting programs, including recording of all incoming requests and request dates, and analyze the data to accurately assess compliance with the service standards. 9. City Council request the General Manager, Parks, Forestry and Recreation Division, to take the necessary steps to ensure City trees removed by Urban Forestry are replanted where suitable. Such steps should include, but not be limited to: a. periodic reviews of tree removal records in conjunction with tree planting records to identify missed tree replacements b. ensuring that the new Work Management System has the ability to automatically generate a planting service request or at least flag a planting opportunity when a City tree has been removed. 10. City Council request the General Manager, Parks, Forestry and Recreation Division, to further expand its efforts to coordinate and consolidate tree planting activities and contracts with other divisions and agencies and corporations, where feasible.
AU2.5amended
At its meeting on February 27, 2019 the Toronto Transit Commission Board considered a report (February 21, 2019) from the Auditor General, titled "Review of Toronto Transit Commission's Revenue Operations: Phase One - Fare Evasion and Fare Inspection". The Board adopted the recommendations in the Auditor General's report, as follows: The Auditor General recommends that: 1. The Board request the Chief Executive Officer, Toronto Transit Commission, to set acceptable targets for its fare evasion rates (by mode and overall) and to develop short and long-term strategies to reduce the fare evasion rates and the resulting revenue loss, while ensuring good customer service. 2. The Board request the Chief Executive Officer, Toronto Transit Commission, to raise customer awareness and understanding of the importance of paying the appropriate fare, as well as the PRESTO card payment process, Proof-of-Payment system, and consequences if found evading fare. 3. The Board request the Chief Executive Officer, Toronto Transit Commission, to: a. Accurately measure and publicly report on the fare evasion rate every year; and b. Reports from Internal Audit on fare evasion study should be made public. 4. The Board request the Chief Executive Officer, Toronto Transit Commission, to further improve the fare inspection program by ensuring: a. Adequate training to Fare Inspectors on data collection and why this work is important to Toronto Transit Commission; b. Development of realistic and clear performance expectations; and c. Implementation of ongoing monitoring of staff performance and regular review of inspection data. 5. The Board request the Chief Executive Officer, Toronto Transit Commission, to explore system wide options that can help prevent and reduce fare evasion on streetcars with multiple doors and Proof-of-Payment policy. 6. The Board request the Chief Executive Officer, Toronto Transit Commission, to expand its fare inspection program to include buses and develop effective fare inspection methods for buses. 7. The Board request the Chief Executive Officer, Toronto Transit Commission, to ensure that bus operators and streetcar operators are instructed and trained to press the fare dispute key whenever the appropriate fare is not paid. Data from the fare dispute keys should be routinely analyzed and used to aid in the strategic allocation of fare enforcement resources. 8. The Board request the Chief Executive Officer, Toronto Transit Commission, to expand its fare inspection program to include coverage of subway station entrances. 9. The Board request the Chief Executive Officer, Toronto Transit Commission, to take the necessary actions to reduce the number of illegal entries, particularly at automatic subway entrances, including: a. Perform a cost-benefit analysis of continuing to keep the automatic entrances open, whether to install high gates in high-risk entrances at subway stations, and whether to station Toronto Transit Commission staff at some of these entrances; b. Complete work on the fare gate sensors and fare gate event data reporting, so that information can be used to determine the rate of illegal entries at subway stations and to strategically allocate fare inspection resources; and c. Ensure security camera video is monitored on a regular basis. 10. The Board request the Chief Executive Officer, Toronto Transit Commission, to ensure the contracted service requirements are upheld regarding functionality of Metrolinx Single Ride Vending Machines and PRESTO Card Readers, and recover from Metrolinx lost passenger revenue. 11. The Board request the Chief Executive Officer, Toronto Transit Commission, to review current TTC fare gate functionality issues, and develop and implement short and long-term strategies to improve fare gate functionality to reduce revenue loss. 12. The Board request the Chief Executive Officer, Toronto Transit Commission, to instruct and train crash gate staff on Toronto Transit Commission (TTC) policy, to request the fare collector to close the TTC fare gate when unattended by TTC staff, and to ensure fare collectors are trained in this task. 13. The Board request the Chief Executive Officer, Toronto Transit Commission, to re-assess whether there is a critical need to issue Child PRESTO cards, balancing provision of good customer service with the risk of fraudulent use of the Child Cards. 14. The Board request the Chief Executive Officer, Toronto Transit Commission, to NOT distribute the Toronto Transit Commission's promotional Child PRESTO cards until appropriate controls are in place. 15. The Board request the Chief Executive Officer, Toronto Transit Commission, to explore ways to provide a Child PRESTO Card that is visually different from an Adult PRESTO card, including further negotiation with Metrolinx to issue visually different PRESTO cards for adults and children aged 12 and under. 16. The Board request the Chief Executive Officer, Toronto Transit Commission, to make the necessary changes to the Child PRESTO cards so that bus and streetcar operators can spot inappropriate use of PRESTO concession cards including: a. Negotiate with Metrolinx to provide a different light and sound on PRESTO card readers for Child PRESTO cards from other concession types; and b. Perform cost benefit analysis and consider making change to Toronto Transit Commission revenue vehicles to include display of the PRESTO concession type for bus and streetcar operators. 17. The Board request the Chief Executive Officer, Toronto Transit Commission, to ensure adequate controls are in place and consistently applied in the issuance of Child PRESTO cards by Distributors. 18. The Board request the Chief Executive Officer, Toronto Transit Commission, to find ways with Metrolinx to either seize or obtain confirmation of deactivation for Child PRESTO cards found to be fraudulently used. 19. The Board request the Chief Executive Officer, Toronto Transit Commission, to work with Metrolinx to determine the feasibility of temporarily suspending the Child PRESTO cards on the Toronto Transit Commission until appropriate controls are in place. 20. The Board request the Chief Executive Officer, Toronto Transit Commission, to conduct a cost-benefit analysis of Transit Fare Inspectors vs. Transit Enforcement Officers with a view to improving the effectiveness and efficiency of the fare inspection program. 21. The Board request the Chief Executive Officer, Toronto Transit Commission, to review the level of authority, tools and uniform provided to Transit Fare Inspectors to ensure they can carry out their duties in a safe and effective manner. 22. The Board request the Chief Executive Officer, Toronto Transit Commission, to take steps to improve the speed, reliability, and functionality of PRESTO hand-held devices for fare inspections. Such steps should include, but not be limited to: a. Improving tracking and reporting of the functionality and repairs of the hand-held devices; b. Finalizing the Service Level Agreement with Metrolinx, which should specify a level of speed and functionality for the hand-held devices that meets Toronto Transit Commission's business requirements; and c. Holding Metrolinx accountable for its contracted service requirements on the speed, reliability and functionality of the hand-held devices supplied to the Toronto Transit Commission. 23. The Board request the Chief Executive Officer, Toronto Transit Commission, to improve the effectiveness of the off-boarding inspection process to minimize the number of passengers walking away from fare inspection, including measures such as installation of temporary or permanent physical barriers where feasible, and assigning a sufficient number of Transit Fare Inspectors and Transit Enforcement Officers for the off-boarding inspection. 24. The Board request the Chief Executive Officer, Toronto Transit Commission, to provide Transit Fare Inspectors with efficient access to the previous fare evader database during inspections. 25. The Board request the Chief Executive Officer, Toronto Transit Commission, to improve the effectiveness and consistency of the scheduling practices of its fare inspection program to: a. Ensure the route and timing coverage is risk-based and strategic; and b Increase the use of plain clothed Transit Fare Inspectors as it enables a more accurate assessment of fare evasion rates and a more effective inspection program. 26. The Board request the Chief Executive Officer, Toronto Transit Commission, to explore ways to increase actual inspection time by Transit Fare Inspectors including: a. Automating the manual ticketing process and the recording and reporting of fare inspection results; b. Assessing the feasibility of establishing an internal fare evasion ticket appeal process, similar to Metrolinx (GO Transit); and c. Exploring ways to reduce travel time by Transit Fare Inspectors between their reporting and lunch locations and assigned routes. 27. The Board request the Chief Executive Officer, Toronto Transit Commission, to finalize updating the TTC By-law No.1 and enhance the Fare Inspection Policies and Procedures manual to ensure they are up to date and include sufficient details to facilitate consistent fare inspections. 28. The Board forward this report to City Council for information through the City's Audit Committee. Decision Advice and Other Information: The TTC Board also adopted the following member motions: i. The TTC Board direct the TTC Chief Executive Officer to use all tools and means available to him to ensure Metrolinx addresses the operational and policy issues identified by the TTC and the Auditor General, and resolved to the satisfaction of the TTC in the interests of its customers. ii. That the service level agreement with Metrolinx be assessed against a standard expected of a supplier and owner of a payment card system, such as a debit or credit payment system. iii. That the TTC Chair request that the Chair of Metrolinx agree to co-sponsor an initiative to raise PRESTO performance standards to contracted levels; and iv. That the President & Chief Executive Officer of Metrolinx and the Chief Executive Officer of the Toronto Transit Commission report back to the TTC Board on this initiative no later than Q3 2019. v. That the TTC Board direct the Chief Executive Officer, Toronto Transit Commission, to conduct a cost-benefit analysis of the TTC's major fare categories, utilizing new PRESTO data, as a part of the Fare Pricing Strategy report expected in Q4 2019. vi. That the TTC Board direct the Chief Executive Officer, Toronto Transit Commission, to initiate a review of the Child PRESTO card fare category data, including the following, and report back to the TTC Board in Q3 2019. a. Overall PRESTO card usage by children under the age of twelve. b. Station by station usage of the Child PRESTO card. c. A specific, costed action plan to reduce Child PRESTO card fraud and evasion. vii. That the TTC Board Chair, Toronto Transit Commission write a letter to the Chair, Metrolinx reaffirming the Board's commitment to ensuring that Metrolinx equipment meets the contractually-required service levels and establishing a final Service Level Agreement to ensure future service standards. viii. That the TTC Board direct the Chief Executive Officer, Toronto Transit Commission, to advise the President & Chief Executive Officer, Metrolinx that the TTC intends to be involved in meaningful consultations as a key customer as PRESTO develops and implements its plans for an account-based fare collection system. ix. That the TTC Board direct TTC staff to review the status of all service level agreements for PRESTO equipment and report back to the TTC Board in Q2 2019. x. That the TTC Board direct TTC staff to work with Metrolinx to implement controls for all concession cards similar to the controls recommended by the Auditor General with respect to child cards. xi. That the TTC Board request a response from Metrolinx on the timeline for re-introducing debit/credit payments on PRESTO fare and transfer machines. xii. That the response be brought to the April 11, 2019 TTC Board meeting. The recommendations of the Toronto Transit Commission Board as set out above are submitted to City Council for information through the Audit Committee.
The Audit Committee recommends that: 1. City Council direct the City Manager to write to the Metrolinx Chief Executive Officer, to request that Metrolinx, as the owner of PRESTO, support the Toronto Transit Commission with all reasonable measures possible to detect and control fare evasion and to implement the City Auditor General's Fare Evasion Report recommendations. 2. City Council receive for information, the following: a. The transmittal letter (March 1, 2019) from the Head of Commission Services, Toronto Transit Commission. b. The report (February 21, 2019) from the Auditor General, headed "Review of Toronto Transit Commission's Revenue Operations: Phase One - Fare Evasion and Fare Inspection".
Staff recommendation as filed
That: 1. City Council receive for information, the following: a. The transmittal letter (March 1, 2019) from the Head of Commission Services, Toronto Transit Commission. b. The report (February 21, 2019) from the Auditor General, headed "Review of Toronto Transit Commission's Revenue Operations: Phase One - Fare Evasion and Fare Inspection".
AU2.6amended
At its February 22, 2019 meeting, a motion was adopted by the Audit Committee requesting the Auditor General to report to the May 3, 2019 Audit Committee meeting on the outstanding audit recommendations which are of greatest concern to the Auditor General. This report provides the requested information. Among the 227 outstanding audit recommendations, 30 were identified as high priority using the following criteria: - Significant amount of potential savings - Significant health and safety risk - Significant reputation risk In addition, 60 recommendations from 25 audit reports have remained outstanding for five years or longer since the related report was issued. The high-priority and long-outstanding recommendations are listed in Attachments 1 and 2, and in Confidential Attachment 1 by the Service Group under each Deputy City Manager and the Chief Financial Officer and Treasurer.
The Audit Committee recommends that: 1. City Council receive the report (April 16, 2019) from the Auditor General for information. 2. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (April 16, 2019) from the Auditor General, remain confidential in its entirety, as it involves the security of property belonging to the City of Toronto.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive this report for information. 2. City Council direct that the confidential information contained in Confidential Attachment 1 remain confidential in its entirety, as it involves the security of property belonging to the City of Toronto.
AU2.7adopted
The Auditor General's Office conducts an annual follow-up review to determine the implementation status of recommendations in previously issued audit reports. The results of the review are reported to City Council through the Audit Committee. This report provides information regarding the implementation status of audit recommendations issued to City divisions in Community and Social Services and the City Manager's Office. In response to a motion adopted by the Audit Committee at its July 4, 2016 meeting, we also include information on the potential cost savings from the outstanding audit recommendations. Our 2019 follow-up review included 38 outstanding recommendations in audit reports for the following six City divisions: - City Manager's Office - Parks, Forestry and Recreation - People, Equity and Human Rights - Shelter, Support and Housing Administration - Social Development, Finance and Administration - Toronto Paramedic Services As of December 31, 2017, there were 12 audit reports to divisions in Community and Social Services and the City Manager's Office with 38 outstanding recommendations. Among the 38 recommendations, our review verified that nine recommendations (24 per cent) have been fully implemented, 28 recommendations (74 per cent) have been partially implemented and one recommendation (2 per cent) is no longer applicable. Continued efforts to implement outstanding recommendations will provide additional benefits to the City such as cost savings, improved controls, and enhanced service delivery. We express our appreciation for the co-operation and assistance we received from management and staff during this year's follow-up review process.
The Audit Committee recommends that: 1. City Council receive the report (April 12, 2019) from the Auditor General for information. 2. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (April 12, 2019) from the Auditor General, remain confidential in its entirety.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive this report for information. 2. City Council direct that the confidential information contained in Confidential Attachment 1 remain confidential in its entirety.
AU2.8received
Toronto Transit Commission - PricewaterhouseCoopers 2017 Management Letter, Follow-Up Report
At its meeting on February 27, 2019 the Toronto Transit Commission Board considered a report (February 26, 2019), entitled "PricewaterhouseCoopers LLP 2017 Management Letter Follow-Up Report". The Toronto Transit Commission Board: 1. Received the report. 2. Approved forwarding a copy of the report to the City Clerk for appropriate handling. This matter is submitted to the City of Toronto Audit Committee for information.
The Audit Committee received this Item for information.