Audit Committee
The full agenda, as filed
All 22 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.
AU4.1amended
Cyber Safety: A Robust Cybersecurity Program Needed to Mitigate Current and Emerging Threats
Over the past decade, the City of Toronto, like other large organizations, is increasingly conducting business and key operations online and in a networked environment. This makes operations more efficient and citizens are served better. The City stores a vast amount of confidential and sensitive data, such as information about employees and citizens' personal records. It also maintains a large number of systems that are critical to the City's functioning, such as water, fire services, transportation, and emergency response systems. The Canadian Centre for Cyber Security, which is Canada's single unified source of expert advice, guidance and support on cyber security for government, critical infrastructure owners and operations, notes that: "a safe and secure cyber space is important for … security, stability, and prosperity" It also assessed that: "Public institutions are also attractive to cyber threat actors ..."[1] In recent years, many municipalities in Canada and the U.S. have been affected by cyberattacks. Recent attacks on the City of Saskatoon, the City of Ottawa and the City of Burlington are evidence that Canadian cities are targeted. To improve security considerably, the City must change in three key areas: - Human behaviour as it relates with cybersecurity threats - Technical fixes - Culture shift. If the City's cybersecurity program is built on these three pillars, cybersecurity will be strengthened considerably. Auditor General raised concerns in this area before In previous assessments on information technology security, the Auditor General's reports highlighted to City management that insufficient preparation to manage cyber threats is widely considered to be one of the most critical operational risks facing the organization. The reports are available in Confidential Attachment 1, Appendix 2. During the Auditor General's most recent follow-up process, management reported that two of the 10 recommendations from information technology security audits done in 2016 were fully implemented. The Auditor General's validation of the implementation of these recommendations found that they were not fully implemented. These recommendations were considered as not fully implemented because the steps undertaken, or the extent of the improvement did not fully address the issue or the intent of the recommendation. Since 2016 none of the recommendations have been fully implemented, which is concerning to the Auditor General. The purpose of this audit was to assess the City's ability to manage external and internal cybersecurity threats, and to follow-up on previous audit recommendations. We provided the I&T Division with a detailed technical report to help them understand and address these issues. This public report contains two administrative recommendations. The confidential audit findings and recommendations to improve cybersecurity controls are presented separately to this report in Confidential Attachment 1. The confidential report will be made public at the discretion of the Auditor General after discussing with appropriate City Official.
The Audit Committee recommends that: 1. City Council direct the City Manager to request the agencies and corporations to provide a cyber security enterprise risk assessment, approved through their organizational governance, to the City of Toronto Chief Technology Officer by Q3 2020, for validation and compliance to be included in the City's cyber-security baseline analysis. Each agency and corporation to subsequently submit a plan to the City of Toronto Chief Technology Officer on implementation plans to mitigate risks by Q4 2020. 2. City Council direct the Chief Technology Officer to take on an expanded city-wide scope and mandate providing support, oversight and direction on standards, practices and policies to all City divisions, and to those agencies and corporations listed in Appendix A (attached to the motion by Councillor Holyday) with immediate effect with respect to all technology assets, goods, and services and direct, or request, those City divisions, agencies and corporations accordingly. 3. City Council direct the Chief Technology Officer to work with the City divisions, and those agencies and corporations set out in Appendix A (attached to the motion by Councillor Holyday), to assess regulatory and compliance matters and their impact on moving to centralized information technology services. 4. City Council direct the Chief Technology Officer to report on an implementation plan for a centralized model to the appropriate committee, and such report to address the feasibility and mechanisms for the Chief Technology Officer to provide oversight and approval for all technology assets, goods, and services purchased by City divisions, and the agencies and corporations set out in Appendix A (attached to the motion by Councillor Holyday). 5. City Council adopt the confidential recommendations contained in Confidential Attachment 1 to the report (October 8, 2019) from the Auditor General. 6. City Council direct that all information contained in Confidential Attachment 1 to the report (October 8, 2019) from the Auditor General be released publicly at the discretion of the Auditor General after discussing with the appropriate City Official.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council adopt the confidential recommendations contained in Confidential Attachment 1 to the report (October 8, 2019) from the Auditor General. 2. City Council direct that all information contained in Confidential Attachment 1 to the report from the Auditor General be released publicly at the discretion of the Auditor General after discussing with the appropriate City Official.
AU4.2adopted
Investigation into Allegations of Reprisal: Reprisal Not Found, But Lessons Learned
This report provides the results of an extensive investigation into an allegation of reprisal from a former City of Toronto employee whose position was terminated. The former employee alleged their position was terminated because they previously made a wrongdoing complaint and another reprisal complaint. The Auditor General's Office (AGO) has the responsibility to investigate reprisal, in coordination with the City Manager's Office. Reprisal investigations are complex. Termination is one of the most severe types of reprisal, and therefore the Auditor General initiated an investigation into the allegations. The investigation involved the review of hundreds of documents, emails, text messages, and Briefing Notes related to the case. The AGO also interviewed eight current or former staff members, some more than once, who had direct or indirect knowledge and/or involvement in the employee's termination. The employee whose employment was terminated was also interviewed. The Auditor General has concluded that there is not sufficient evidence to support the allegation of reprisal. However, there are lessons learned. This report is being issued to communicate important lessons and to assure City employees, City Council, senior management, and the public know that all reprisal allegations are taken very seriously and are investigated to the fullest extent.
The Audit Committee recommends that: 1. City Council adopt the confidential recommendation contained in Confidential Attachment 1 to the report (October 7, 2019) from the Auditor General. 2. City Council request the City Manager to include in performance appraisals of managers and supervisory staff an evaluation of whether they are giving accurate and timely feedback to staff who are not meeting expectations. 3. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (October 7, 2019) from the Auditor General remain confidential in its entirety, as it contains personal identifiable information.
Staff recommendation as filed
The Auditor General recommends that: 1. This recommendation is included in Confidential Attachment 1. 2. City Council request the City Manager to include in performance appraisals of managers and supervisory staff an evaluation of whether they are giving accurate and timely feedback to staff who are not meeting expectations. 3. City Council direct that the confidential information contained in Confidential Attachment 1 remain confidential in its entirety, as it contains personal identifiable information.
AU4.3amended
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 Corporate Services and Finance and Treasury Services. Our 2019 follow-up review included 206 outstanding recommendations from audit reports issued between 2005 and 2017 for the following City divisions: - Accounting Services - Corporate Real Estate Management - Environment and Energy - Financial Planning - Information and Technology - Pension, Payroll and Employee Benefits - Purchasing and Materials Management - Revenue Services - 311 Toronto Our review verified that 24 recommendations (12 per cent) have been fully implemented, 178 recommendations (86 per cent) have been partially implemented and four recommendations (2 per cent) are no longer applicable. Recommendations reported by management as implemented that the Auditor General determined as not fully implemented During the current follow-up process, management reported that 87 out of 206 outstanding recommendations were fully implemented. However, based on our review we determined that 63 (72 per cent) of those recommendations have not been fully implemented. Management agreed with our assessments and will take additional actions to fully implement these recommendations. Continued efforts to implement outstanding recommendations will provide additional benefits to the City such as cost savings, improved controls, and enhanced service delivery.
The Audit Committee recommends that: 1. City Council request the City Manager to report to City Council, through the Audit Committee, on the following: a. Steps in providing effective mechanisms for management to be held accountable for implementing, within reasonable and identified timelines, measures which they have agreed to take in order to implement recommendations from the Auditor General. b. Ensuring appropriate consequences when information provided to the Auditor General is not fully accurate. 2. City Council receive the report (October 10, 2019) from the Auditor General for information. 3. 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, it is about labour relations or employee negotiations, and it is about litigation or potential litigation that affects 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, it is about labour relations or employee negotiations, it is about litigation or potential litigation that affects the City of Toronto.
AU4.4amended
At its meeting on October 24, 2019, the Toronto Transit Commission Board considered the report (October 21, 2019) from the Auditor General, titled "Review of Toronto Transit Commission's Revenue Operations: Phase Two - PRESTO/TTC Fare Equipment and PRESTO Revenue".
The Audit Committee recommends that: 1. City Council direct the Toronto Transit Commission to include as part of the Joint Executive Committee agenda, resolution of the Auditor General's Recommendations 15 and 16, contained in the report (February 21, 2019) entitled "Review of Toronto Transit Commission's Revenue Operations: Phase One - Fare Evasion and Fare Inspection", concerning the physical differentiation of Child and other concession PRESTO Cards, viz: "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." 2. City Council direct the City Manager to write to Metrolinx to request that a change be made to the physical appearance of Child and other concession cards immediately. 3. City Council receive for information, the following: - the transmittal letter October 24, 2019) from the Head of Commission Services, Toronto Transit Commission; and - the report (October 21, 2019) from the Auditor General, titled "Review of Toronto Transit Commission's Revenue Operations: Phase Two - PRESTO/TTC Fare Equipment and PRESTO Revenue".
Staff recommendation as filed
The Toronto Transit Commission Board recommends that: 1. City Council receive for information the report (October 21, 2019) from the Auditor General, titled "Review of Toronto Transit Commission's Revenue Operations: Phase Two - PRESTO/TTC Fare Equipment and PRESTO Revenue".
AU4.5amended
Safeguarding Rent-Geared-to-Income Assistance: Ensuring Only Eligible People Benefit
The Auditor General's Annual Work Plan includes a series of ongoing and upcoming audits along the housing continuum. The focus of this audit is the administration of rent-geared-to-income (RGI) and the verification of each household's ongoing eligibility for RGI assistance while living in social housing. It is well known that there is a shortage of social housing units to meet the need for deeply affordable housing in Toronto. The findings and recommendations from this audit can assist the City in taking greater responsibility for key aspects of the RGI administration process. In a city with thousands of individuals and families waiting years for subsidized housing, it is vital to ensure that the people living in RGI units are eligible for the assistance they receive; otherwise, people who are in need of financial assistance and on the waiting list will have to wait even longer. We have made recommendations that will help the City meet its legislated responsibilities and provide the tools and support that housing providers need to ensure households benefitting from RGI are eligible. These are categorized into three areas and highlight that the City needs to: 1. Ensure indicators of RGI eligibility issues are identified and resolved, by effectively addressing existing eligibility concerns and empowering providers with adequate guidance, training and tools. 2. Centralize key systems and processes used to administer RGI so that the City can provide more effective oversight, create efficiencies in how eligibility is assessed and better support housing providers in administering RGI. 3. Expand integration of income-based programs, to create efficiencies in eligibility verification and addressing potential fraud through increased information sharing. Our audit provides 13 recommendations that will help will help maintain public confidence in the City's oversight of social housing funding. More importantly, this will help prevent providing assistance to ineligible households and assist more waiting and eligible people to access stable housing.
The Audit Committee recommends that: 1. City Council request the General Manager, Shelter, Support and Housing Administration Division, to ensure all rent-geared-to-income households identified by the Auditor General as having potential eligibility issues are appropriately reviewed. 2. City Council request the General Manager, Shelter, Support and Housing Administration Division, to develop a strategy to ensure housing providers complete comprehensive reviews of all rent-geared-to-income (RGI) households to identify potential eligibility issues including property ownership, indicators of undeclared sources of income or assets and irregular supporting documents. This should include: a. a mechanism for providers to report potential eligibility issues to the City for monitoring purposes b. a centralized process to track reported eligibility concerns and the follow-up action taken c. a secondary review of RGI files by Shelter, Support and Housing Administration staff, selected based on risk, to ensure the quality of reviews being performed by housing providers. Risk identification should be data driven and based on analysis of data from various sources. 3. City Council request the General Manager, Shelter, Support and Housing Administration Division, to develop a training plan to enhance providers' abilities to more effectively identify and act on potential ineligibility and fraud indicators, including fake and forged documents, unauthorized occupants and subletting. 4. City Council request the General Manager, Shelter, Support and Housing Administration Division, to update the RGI Administration Manual to explicitly identify supporting documents to obtain, appropriate analysis of information to be completed and documentation requirements regarding actions taken to address exceptions. The Manual should emphasize the importance of maintaining good documentation of the steps performed when reviewing household eligibility. These requirements should be consistently applied except under circumstances where accommodation is required. 5. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. develop a process for pursuing offence charges against RGI households where eligibility information has been misrepresented b. provide guidance and support for housing providers when potential eligibility issues arise that indicate fraud, to ensure appropriate legal action is taken under the Residential Tenancies Act, Housing Services Act or the Criminal Code of Canada. 6. City Council request the General Manager, Shelter, Support and Housing Administration Division, to designate Eligibility Review Officers (ERO) in order to effectively investigate eligibility concerns and suspected fraud. Protocols should be established and communicated to housing providers on how to refer files to the ERO for further assessment. Appropriate case management processes should be implemented to track referred files and actions taken. 7. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. directly administer the eligibility reviews for households seeking RGI assistance and entering into RGI housing b. work in partnership with housing providers to ensure adequate supports are in place for them to continue to manage the ongoing annual eligibility review process c. consider how resources can be optimized to ensure cost-effectiveness. 8. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. create and maintain a centralized database that can be used by the City and its housing providers for the purposes of administering rent-geared-to-income (RGI) household data, assessing eligibility, and automating calculation of RGI rent b. establish a process for collecting and retaining all supporting documents in electronic format that are accessible by authorized individuals. This process should address retention policies for electronic records and the potential for households to electronically submit documents c. consider how a centralized database can be effectively integrated with other information systems and data sources for the purposes of data analysis and to verify eligibility d. obtain and leverage data from various sources to support the ability to identify any potential issues that require further review by both the provider and the City. 9. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. develop adequate consent and disclosure forms that are understandable and allow for the collection of voluntary, expressed and informed consent to share information to verify rent-geared-to-income (RGI) eligibility. Consideration should be given to whether a common consent process can be used by all income-based assistance programs. These forms should be mandatory and electronic for all housing providers to use b. ensure fully completed annual income and asset review and signed consent forms are retained on file for all RGI household members and that appropriate action is taken where households fail to provide these forms. 10. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. consider both internal and external information sources that can support more efficient eligibility verification b. establish agreements with data owners so that data can be accessed for the purposes of verifying rent-geared-to-income eligibility. 11. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. ensure monitoring controls, including operational reviews, are being performed as per established divisional procedures and in a timely manner b. develop a centralized tracking process to monitor operational review results and provider responses. Strong remediation plans should be implemented for providers that fail to comply. A follow-up process should be developed to ensure that non-compliant providers are acting on recommended improvements in a timely fashion. 12. City Council request the General Manager, Shelter, Support and Housing Administration Division, to establish a centralized divisional investigation and fraud detection function. The City should consider the opportunity for efficiencies of combining this function with the other income-based assistance programs. 13. City Council request the Deputy City Manager, Community and Social Services, to expand the scope of the Human Services Integration to achieve even greater efficiencies from information sharing and a common fraud investigation function to optimize resources and ensure cost-effectiveness. 14. City Council direct the General Manager, Shelter, Support and Housing Administration, to provide monthly updates regarding progress on the recommendations contained in Item AU4.5, to the Auditor General and the Chair of the Audit Committee until these recommendations have been fully implemented. 15. City Council direct the General Manager, Shelter, Support and Housing Administration to report to the Audit Committee in Q1 2020 with an update on the implementation of the Auditor General's recommendations, with the report to include detailed plans and timelines for implementation.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the General Manager, Shelter, Support and Housing Administration Division, to ensure all rent-geared-to-income households identified by the Auditor General as having potential eligibility issues are appropriately reviewed. 2. City Council request the General Manager, Shelter, Support and Housing Administration Division, to develop a strategy to ensure housing providers complete comprehensive reviews of all rent-geared-to-income (RGI) households to identify potential eligibility issues including property ownership, indicators of undeclared sources of income or assets and irregular supporting documents. This should include: a. a mechanism for providers to report potential eligibility issues to the City for monitoring purposes b. a centralized process to track reported eligibility concerns and the follow-up action taken c. a secondary review of RGI files by Shelter, Support and Housing Administration staff, selected based on risk, to ensure the quality of reviews being performed by housing providers. Risk identification should be data driven and based on analysis of data from various sources. 3. City Council request the General Manager, Shelter, Support and Housing Administration Division, to develop a training plan to enhance providers' abilities to more effectively identify and act on potential ineligibility and fraud indicators, including fake and forged documents, unauthorized occupants and subletting. 4. City Council request the General Manager, Shelter, Support and Housing Administration Division, to update the RGI Administration Manual to explicitly identify supporting documents to obtain, appropriate analysis of information to be completed and documentation requirements regarding actions taken to address exceptions. The Manual should emphasize the importance of maintaining good documentation of the steps performed when reviewing household eligibility. These requirements should be consistently applied except under circumstances where accommodation is required. 5. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. develop a process for pursuing offence charges against RGI households where eligibility information has been misrepresented b. provide guidance and support for housing providers when potential eligibility issues arise that indicate fraud, to ensure appropriate legal action is taken under the Residential Tenancies Act, Housing Services Act or the Criminal Code of Canada. 6. City Council request the General Manager, Shelter, Support and Housing Administration Division, to designate Eligibility Review Officers (ERO) in order to effectively investigate eligibility concerns and suspected fraud. Protocols should be established and communicated to housing providers on how to refer files to the ERO for further assessment. Appropriate case management processes should be implemented to track referred files and actions taken. 7. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. directly administer the eligibility reviews for households seeking RGI assistance and entering into RGI housing b. work in partnership with housing providers to ensure adequate supports are in place for them to continue to manage the ongoing annual eligibility review process c. consider how resources can be optimized to ensure cost-effectiveness. 8. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. create and maintain a centralized database that can be used by the City and its housing providers for the purposes of administering rent-geared-to-income (RGI) household data, assessing eligibility, and automating calculation of RGI rent b. establish a process for collecting and retaining all supporting documents in electronic format that are accessible by authorized individuals. This process should address retention policies for electronic records and the potential for households to electronically submit documents c. consider how a centralized database can be effectively integrated with other information systems and data sources for the purposes of data analysis and to verify eligibility d. obtain and leverage data from various sources to support the ability to identify any potential issues that require further review by both the provider and the City. 9. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. develop adequate consent and disclosure forms that are understandable and allow for the collection of voluntary, expressed and informed consent to share information to verify rent-geared-to-income (RGI) eligibility. Consideration should be given to whether a common consent process can be used by all income-based assistance programs. These forms should be mandatory and electronic for all housing providers to use b. ensure fully completed annual income and asset review and signed consent forms are retained on file for all RGI household members and that appropriate action is taken where households fail to provide these forms. 10. City Council request the General Manager, Shelter, Support and Housing Administration Division, in consultation with the City Solicitor, to: a. consider both internal and external information sources that can support more efficient eligibility verification b. establish agreements with data owners so that data can be accessed for the purposes of verifying rent-geared-to-income eligibility. 11. City Council request the General Manager, Shelter, Support and Housing Administration Division, to: a. ensure monitoring controls, including operational reviews, are being performed as per established divisional procedures and in a timely manner b. develop a centralized tracking process to monitor operational review results and provider responses. Strong remediation plans should be implemented for providers that fail to comply. A follow-up process should be developed to ensure that non-compliant providers are acting on recommended improvements in a timely fashion. 12. City Council request the General Manager, Shelter, Support and Housing Administration Division, to establish a centralized divisional investigation and fraud detection function. The City should consider the opportunity for efficiencies of combining this function with the other income-based assistance programs. 13. City Council request the Deputy City Manager, Community and Social Services, to expand the scope of the Human Services Integration to achieve even greater efficiencies from information sharing and a common fraud investigation function to optimize resources and ensure cost-effectiveness.
AU4.6amended
Fleet Services Operational Review, Phase Two - Stronger Asset Management Needed
This report presents the results of Phase Two of the Auditor General's operational review of the Fleet Services Division. The objective of this review was to assess the Division's asset management practices of the City's fleet. A separate Phase One report, titled "Fleet Services Operational Review - Phase One: Lengthy Downtime Requires Immediate Attention", was presented to the Audit Committee on May 3, 2019. The key findings from the audit are: 1. The City's fleet often remains in operation for longer than optimal, which increases the risk of failure and costly repairs. New units should be procured on a timely basis to ensure that replacements arrive when needed. 2. Fleet Services should strengthen its decision-making processes to ensure that vehicles near their end of life remain in operation for only as long as economical to the City. This includes supplementing its analysis to flag units for disposal, improving the quality of vehicle condition assessments, and removing units that have been redeployed for extended periods of time. 3. Improving the logistics for rental vehicles will reduce the delays in pick-up and drop off. These delays are currently costing the City $79,000 per year in rental costs for units that are not in operation. Additionally, the City could have saved an estimated $45,000 per year by purchasing certain units that have been rented for prolonged periods of time. 4. New vehicles usually come with standard manufacturer warranty. This warranty was not always being taken advantage of, resulting in unnecessary costs. Many improvements are needed. Strengthening the processes in this area will help Fleet to realize additional warranty claim opportunities. 5. The City needs a central oversight function in Fleet Services to ensure the most economical decision making for the City as a whole. The City manager should examine Fleet Services' role, responsibilities, and authority in order to enable it to act effectively as a steward of the City's fleet assets. This report provides 20 recommendations to help achieve efficiencies, improve warranty administration, and strengthen oversight of the City's fleet assets.
The Audit Committee recommends that: 1. City Council request the General Manager, Fleet Services Division, to revise the timing for replacement vehicle purchases to take into account the time required to acquire complex and specialized units. 2. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to assess and where needed, address the vehicle replacement backlog to prevent expensive repairs towards the end of a unit's life span. 3. City Council request the General Manager, Fleet Services Division, to assess the tendering needs for heavy duty units and where feasible, streamline the procurement process through the use of multi-year contracts. 4. City Council request the General Manager, Fleet Services Division, to take steps to improve the consistency and reliability of its decision-making process for vehicles at or near the end of life, including: a. Supplementing the lifecycle cost analysis with vehicle condition assessments (PMVs); and b. Revising the PMV form, process, timing and frequency of vehicle condition assessments to better inform asset replacement decisions. 5. City Council request the General Manager, Fleet Services Division, to develop a policy to formalize the process for declaring units beyond economic repair, including the threshold and the criteria to consider, and required level of documentation. 6. City Council request the General Manager, Fleet Services Division, to take steps to review and address the issue of extended redeployment. Steps to be taken should include, but not be limited to: a. Consistently tracking all relevant redeployment information; b. Reviewing business cases to ensure proper justification is provided for redeployments; and c. Regularly monitoring redeployed assets and removing them when it is no longer economical to keep them in service. 7. City Council request the City Manager to forward this report to Division Heads and request them to review their respective use of redeployment assets to ensure they are still operationally effective and economical. 8. City Council request the General Manager, Fleet Services Division, to take steps to improve management of the City's fleet inventory, including: a. Perform inventory reviews on a regular basis moving forward; b. Revise the process to receive ongoing inventory information updates for greater efficiency, and ensure that user groups have a clear understanding of expectations and the process; c. Work with user groups to ensure that Fleet Services is notified of inventory changes as they occur; d. Work with user groups to improve physical inventory management practices, particularly for attachments and other off-road equipment which may have a higher risk of loss; and e. Ensure appropriate document retention practices for vehicle returns and disposals. 9. City Council request the General Manager, Fleet Services Division, to formalize communication channels between Fleet Maintenance and Fleet Asset Management, particularly relating to acquisition and disposal of fleet assets. 10. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to establish formal communication channels to ensure that operating requirements of user groups both at the frontline and leadership level are clearly communicated to Fleet Services Division in a timely manner. 11. City Council request the General Manager, Fleet Services Division, to revise rental vehicle processes with a view to minimizing unnecessary costs, including: a. Streamline pick-up and drop-off logistics to minimize delays and unnecessary costs; b. Explore opportunities to increase coverage of rental duties; c. Analyze and monitor rentals regularly, including length of time rented, to ensure that rental decisions are economical to the City; and d. Explore opportunities to identify and minimize low utilization rental vehicles. 12. City Council request the General Manager, Fleet Services Division, to provide garage staff and vehicle operators with contact information of available free roadside assistance services and guidance on when to use this program. 13. City Council request the General Manager, Fleet Services Division, to take steps to strengthen vehicle warranty administration. Such steps should include but not be limited to: a. Ensuring all warranty information for vehicles, equipment, and related add-ons and attachments are entered into the M5 system in a timely manner; b. Establishing a threshold to guide garage staff on when to pursue warranty claims, considering both downtime and repair costs; and c. Ensuring work order notes contain sufficient details and evidence to allow staff to effectively pursue warranty claims. 14. City Council request the General Manager, Fleet Services Division, to revise the warranty administration reporting structure to allow effective communication of warranty related issues to Asset Management. 15. City Council request the General Manager, Fleet Services Division, to utilize the Warranty Claims Manager module in the M5 system to automate the tracking and reporting of warranty claims. 16. City Council request the General Manager, Fleet Services Division, to track warranty work order statuses and periodically review work orders for missed warranty opportunities. 17. City Council request the General Manager, Fleet Services Division, to establish internal warranty claim submission and success rate targets, and to measure and report actual performance against these targets. 18. City Council request the General Manager, Fleet Services Division, to take steps to establish service agreements with its warranty service providers at the time of procurement, to ensure timely and uninterrupted maintenance for vehicles requiring service above and beyond its warranty coverage. 19. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to effectively identify, report, and deter damages caused from operating without care to avoid unnecessary costs to the City. 20. City Council request the City Manager to consider the appropriate role of Fleet Services in the management and oversight of the City's fleet assets, and provide the Fleet Services Division with authority to act accordingly. 21. City Council direct the General Manager, Fleet Services, to take on an expanded city-wide scope and mandate providing oversight, direction and support to all City divisions, agencies and corporations including Community and Social Services, Infrastructure and Development, Finance and Treasury Services, the City Clerk's Office at the City, and the Toronto Transit Commission, the Toronto Police Service, the Toronto Parking Authority, Toronto Community Housing, CreateTO, Exhibition Place, Toronto Public Health, Toronto Public Library and the Toronto Zoo. 22. City Council direct the General Manager, Fleet Services, to report on an implementation plan for a centralized fleet management model to the General Government and Licensing Committee in Q3 2020, with such report to address the feasibility of the General Manager, Fleet Services, providing oversight and approval for all fleet-related assets, goods, and services purchased and used by City divisions and agencies. 23. City Council direct the General Manager, Fleet Services, to work with the City divisions, agencies and corporations listed in Recommendation 21 above, to assess regulatory, compliance related matters and their impact to moving to a centralized model. 24. City Council direct City divisions and agencies to comply with Fleet Services initiatives and directions on fleet management and direct the General Manager, Fleet Services, to report back annually to the General Government and Licensing Committee on the City of Toronto's fleet damages related to operating without care and any corrective or preventative actions required.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the General Manager, Fleet Services Division, to revise the timing for replacement vehicle purchases to take into account the time required to acquire complex and specialized units. 2. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to assess and where needed, address the vehicle replacement backlog to prevent expensive repairs towards the end of a unit's life span. 3. City Council request the General Manager, Fleet Services Division, to assess the tendering needs for heavy duty units and where feasible, streamline the procurement process through the use of multi-year contracts. 4. City Council request the General Manager, Fleet Services Division, to take steps to improve the consistency and reliability of its decision-making process for vehicles at or near the end of life, including: a. Supplementing the lifecycle cost analysis with vehicle condition assessments (PMVs); and b. Revising the PMV form, process, timing and frequency of vehicle condition assessments to better inform asset replacement decisions. 5. City Council request the General Manager, Fleet Services Division, to develop a policy to formalize the process for declaring units beyond economic repair, including the threshold and the criteria to consider, and required level of documentation. 6. City Council request the General Manager, Fleet Services Division, to take steps to review and address the issue of extended redeployment. Steps to be taken should include, but not be limited to: a. Consistently tracking all relevant redeployment information; b. Reviewing business cases to ensure proper justification is provided for redeployments; and c. Regularly monitoring redeployed assets and removing them when it is no longer economical to keep them in service. 7. City Council request the City Manager to forward this report to Division Heads and request them to review their respective use of redeployment assets to ensure they are still operationally effective and economical. 8. City Council request the General Manager, Fleet Services Division, to take steps to improve management of the City's fleet inventory, including: a. Perform inventory reviews on a regular basis moving forward; b. Revise the process to receive ongoing inventory information updates for greater efficiency, and ensure that user groups have a clear understanding of expectations and the process; c. Work with user groups to ensure that Fleet Services is notified of inventory changes as they occur; d. Work with user groups to improve physical inventory management practices, particularly for attachments and other off-road equipment which may have a higher risk of loss; and e. Ensure appropriate document retention practices for vehicle returns and disposals. 9. City Council request the General Manager, Fleet Services Division, to formalize communication channels between Fleet Maintenance and Fleet Asset Management, particularly relating to acquisition and disposal of fleet assets. 10. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to establish formal communication channels to ensure that operating requirements of user groups both at the frontline and leadership level are clearly communicated to Fleet Services Division in a timely manner. 11. City Council request the General Manager, Fleet Services Division, to revise rental vehicle processes with a view to minimizing unnecessary costs, including: a. Streamline pick-up and drop-off logistics to minimize delays and unnecessary costs; b. Explore opportunities to increase coverage of rental duties; c. Analyze and monitor rentals regularly, including length of time rented, to ensure that rental decisions are economical to the City; and d. Explore opportunities to identify and minimize low utilization rental vehicles. 12. City Council request the General Manager, Fleet Services Division, to provide garage staff and vehicle operators with contact information of available free roadside assistance services and guidance on when to use this program. 13. City Council request the General Manager, Fleet Services Division, to take steps to strengthen vehicle warranty administration. Such steps should include but not be limited to: a. Ensuring all warranty information for vehicles, equipment, and related add-ons and attachments are entered into the M5 system in a timely manner; b. Establishing a threshold to guide garage staff on when to pursue warranty claims, considering both downtime and repair costs; and c. Ensuring work order notes contain sufficient details and evidence to allow staff to effectively pursue warranty claims. 14. City Council request the General Manager, Fleet Services Division, to revise the warranty administration reporting structure to allow effective communication of warranty related issues to Asset Management. 15. City Council request the General Manager, Fleet Services Division, to utilize the Warranty Claims Manager module in the M5 system to automate the tracking and reporting of warranty claims. 16. City Council request the General Manager, Fleet Services Division, to track warranty work order statuses and periodically review work orders for missed warranty opportunities. 17. City Council request the General Manager, Fleet Services Division, to establish internal warranty claim submission and success rate targets, and to measure and report actual performance against these targets. 18. City Council request the General Manager, Fleet Services Division, to take steps to establish service agreements with its warranty service providers at the time of procurement, to ensure timely and uninterrupted maintenance for vehicles requiring service above and beyond its warranty coverage. 19. City Council request the City Manager, in consultation with the General Manager, Fleet Services Division, to take steps to effectively identify, report, and deter damages caused from operating without care to avoid unnecessary costs to the City. 20. City Council request the City Manager to consider the appropriate role of Fleet Services in the management and oversight of the City's fleet assets, and provide the Fleet Services Division with authority to act accordingly.
AU4.7withdrawn
Toronto Building Division: Conditional Permits - Follow-up Investigation
The purpose of this report is to advise Audit Committee that the Auditor General will be submitting a report entitled "Toronto Building Division: Conditional Permits - Follow-up Investigation" for the Committee's consideration on October 25, 2019.
Item AU4.7 was withdrawn at the Audit Committee on October 25, 2019.
AU4.8adopted
Auditor General's Office 2020 Operating Budget
In accordance with Chapter 3 of the Toronto Municipal Code, the Auditor General is submitting her 2020 Operating Budget request to the Audit Committee for consideration and recommendation to City Council. The attached report provides information relating to the Auditor General's 2020 Operating Budget request of $6.701 million. This is essentially the same budget as last year and is equal to 1/20th of one per cent, or 0.05 per cent, of the City's 2019 Approved Adjusted Budget. The budget request supports the Auditor General providing the same level of capacity to undertake value for money audits and investigations as in 2019. It is recommended that the time-limited budget increases approved by City Council in 2017 to 2019 be retained permanently to preserve the level of service provided over the last three years. The Auditor General's 2020 Work Plan is being presented to the Audit Committee at the same meeting as this 2020 Budget Request.
The Audit Committee: 1. Approved the 2020 Operating Budget for the Auditor General's Office attached to the report (October 8, 2019) from the Auditor General, and directed that it be forwarded to City Council through the Budget Committee.
Staff recommendation as filed
The Auditor General recommends that: 1. Audit Committee approve the attached 2020 Operating Budget for the Auditor General's Office, and forward it to City Council through the Budget Committee.
AU4.9amended
Auditor General's Office 2020 Work Plan
The Auditor General's audits and investigations provide independent information for City Council to hold City administrators accountable for providing stewardship over public funds. The Auditor General's work helps to identify and mitigate risks the City faces, improve accountability, strengthen management controls, and enhance the efficiency and effectiveness of City operations. The purpose of this report is to provide City Council with an overview of the work the Auditor General plans to conduct in 2020. The Auditor General may amend the annual Work Plan if new priorities arise. Audit projects included in the annual Work Plan are identified through a risk assessment process conducted periodically by the Office, a review of emerging issues, and an analysis of trends in allegations made to the Fraud and Waste Hotline. The Auditor General also considers the views and experience of City Councillors and City management. Flexibility within the Auditor General's Work Plan is needed to address emerging risk areas and high-risk complaints to the Fraud & Waste Hotline. In order to appropriately respond to certain emerging risks, the Auditor General may need to re-prioritize or delay audits included in the Annual Work Plan. This is necessary in order to provide City Council with assurance that emerging risks are being adequately addressed in a timely manner. For example, there is an increasing prevalence of reported breaches of governmental systems across Canada and the United States. It is appropriate that the Auditor General respond by increasing her focus on cyber-security of City assets. In addition, the Auditor General anticipates that the need for complex and in-depth forensic investigations will continue. This will require a significant commitment of resources, given the increasing complexity of complaints received by the Fraud and Waste Hotline. Currently, the Auditor General's Office has over eight active investigations underway and there are a number of other high-risk complaints that are waiting to be addressed. In accordance with Chapter 3 of the Toronto Municipal Code, City Council may add to the annual audit plan by a two-thirds majority vote of all Council Members.
The Audit Committee recommends that: 1. City Council receive the Auditor General's 2020 Work Plan, attached to the report (October 9, 2019) from the Auditor General. 2. City Council again request the Toronto Police Services Board and the Toronto Public Health Board to invite the Auditor General to complete a risk assessment of operations in order to inform potential audit projects on future Work Plans; and further direct the Auditor General to report to the Audit Committee on the Boards' responses to this request. 3. City Council request the Auditor General to consider providing for a complete analysis of any contracts that have overrun their budget.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the Auditor General's 2020 Work Plan.
AU4.10amended
Auditor General's 2019 Consolidated Status Report on Outstanding Audit Recommendations
This consolidated year-end report summarizes the 2019 audit recommendations follow-up results for all City divisions, the City Manager's Office, Agencies and Corporations, and recommendations issued by the Auditor General's Forensic Unit. The number of audit recommendations implemented by management over the past year was low. The City divisions, the City Manager's Office and Agencies and Corporations implemented 18 per cent of the outstanding recommendations during this year's follow-up process. A total of 392 recommendations were included in this follow-up review and we verified that 71 recommendations have been fully implemented, and 10 recommendations are no longer applicable. There are 311 recommendations that remain not fully implemented. During the current follow-up process management reported that 172 out of 392 recommendations have been implemented. However, based on our review, we determined that 101 (59 per cent) of those recommendations have not been fully implemented because the steps undertaken or the extent of the improvement did not fully address the issue or the intent of the recommendation or management was not able to provide sufficient evidence of actions taken. A significant amount of work is required to verify implementation of recommendations, and in circumstances where recommendations are not implemented, it is a waste of audit resources. Recommendations implemented in 2019, resulted in savings and revenue increases. As a result of management actions, the City achieved approximately $3.1 million in one time savings and approximately $2.8 million in annual recurring savings. Details of savings identified during the current follow up cycle are provided in Attachment 1. Continued efforts to implement outstanding recommendations will provide additional financial and non-financial benefits to the City and its Agencies and Corporations. These benefits include cost savings, additional revenue, enhanced service delivery, and improved controls.
The Audit Committee recommends that: 1. City Council direct the City Manager to report to the Audit Committee in Q1 2020 with an update on the implementation of all outstanding audit recommendations for the City Manager's Office, all City divisions within Community and Social Services, Corporate Services, Finance and Treasury Services, and Infrastructure and Development Services, and the City's agencies and corporations, with the report to include detailed plans and timelines for implementation of all recommendations not yet fully implemented. 2. City Council receive the report (October 10, 2019) from the Auditor General for information.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive this report for information.
AU4.11amended
Auditor General's Office - Forensic Unit Status Report on Outstanding Recommendations
This report provides information regarding the implementation status of publicly reported recommendations made by the Forensic Unit. These recommendations were made in the context of the annual reports on the Fraud and Waste Hotline and investigations. Following up on outstanding recommendations from previous reports is important and ensures that management has taken appropriate action to implement recommendations. From January 1, 2007 to December 31, 2017, a total of 57 recommendations related to City Divisions made by the Forensic Unit were reported publicly. Twenty-nine of them were implemented before 2018. Of the remaining 28 recommendations: - 3 recommendations were implemented in 2019 - 7 recommendations remain outstanding - 17 were deferred until the next follow-up - 1 recommendation was no longer applicable For the current follow-up process, management reported that seven were fully implemented. However, based on our review we determined that three of those recommendations have not been fully implemented and one is no longer applicable. Management agreed with our assessments and will take additional actions to fully implement the outstanding recommendations in the future. One additional confidential recommendation was made to management staff and has been fully implemented. The implementation status of confidential recommendations is communicated directly to the City Manager. The Forensic Unit also made 11 recommendations related to City agencies and corporations as at December 31, 2017. The status of these recommendations was included in the Auditor General's 2019 Status Report on Outstanding Audit Recommendations for City Agencies and Corporations that was considered by Audit Committee on June 28, 2019. Follow-up on any outstanding recommendations for agencies and corporations will be included in a separate Forensic Unit report next year. Continued efforts to implement outstanding recommendations will provide additional benefits to the City through cost savings, additional revenue, control improvements and enhanced service delivery.
The Audit Committee recommends that: 1. City Council receive the report (October 9, 2019) from the Auditor General for information. 2. City Council direct that the confidential information contained in Confidential Attachment 1 to the report (October 9, 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.
AU4.12received
Process to Track and Report on the Implementation of Outstanding Auditor General Recommendations
At its meeting of June 28, 2019, the Audit Committee directed staff to report back on a process to track and report the progress on management's implementation and target completion date of outstanding recommendations, with emphasis on those identified by the Auditor General as items of greatest concern. This report responds to this request for information and presents an overview of a proposed process. Internal Audit will compile a database of all outstanding council approved recommendations issued to management by the Auditor General. This will include recommendations from audits, investigations, Fraud and Waste Hotline reports and those added by Audit Committee. On a quarterly bases Internal Audit will solicit updates from management and prepare a report to Audit Committee on management's assessed progress on the implementation of the recommendations. The report will provide detailed action taken on the implementation of recommendations of greatest concern. It is expected that the first quarterly report will be tabled at the February 2020 Audit Committee meeting.
The Audit Committee received this Item for information.
Staff recommendation as filed
The City Manager recommends that: 1. The Audit Committee receive this report for information.
AU4.13received
Audit of City Cleaning Services (Part 2): Further Information on Outstanding Recommendations
At its meeting of June 28, 2019, the Audit Committee directed staff to report back with further detailed reasons as to why Recommendations 3 and 9 from the Auditor General's 2016 report "Audit of City Cleaning Services - Part 2: Maximizing Value from Cleaning Contracts." have not been implemented, including specifics on which resources it would take for full implementation. This report responds to this request, and outlines action taken by the Corporate Real Estate Management Division (formerly Facilities Management) in recent years that will contribute to the implementation of these Recommendations and sustain improvements to cleaning services over the long term.
The Audit Committee received this Item for information.
Staff recommendation as filed
The Executive Director, Corporate Real Estate Management recommends that: 1. The Audit Committee receive this report for information.
AU4.14received
Urban Forestry Status Update on Ensuring Value for Money for Tree Maintenance Services
The purpose of this report is to respond to City Council's request that the General Manager, Parks, Forestry and Recreation report to the Audit Committee with a status update on the Auditor General's recommendations contained in the staff report dated April 26, 2019.
The Audit Committee received this Item for information.
Staff recommendation as filed
The General Manager of Parks, Forestry and Recreation recommends that: 1. The Audit Committee receive this report for information.
AU4.15received
Update on Outstanding Auditor General's Recommendations Related to Building Permits and Inspections
At its meeting of June 28, 2019, the Audit Committee directed staff to report back on the status of outstanding recommendations from the Auditor General's reports that relate to building permits and inspections. This report responds to this request and presents an overview of actions that Toronto Building has undertaken and will continue to take to fully implement all of the Auditor General's recommendations. The outstanding recommendations related to building permits and inspections are contained in two reports from the Auditor General: "Toronto Building Division - Building Permit Fees, Improving Controls and Reporting" and "Toronto Building - Improving the Quality of Building Inspections."
The Audit Committee received this Item for information.
Staff recommendation as filed
The Chief Building Official and Executive Director recommends that: 1. The Audit Committee receive this report for information.
AU4.16received
At its meeting on September 24, 2019 the TTC Board considered a report, titled "Audit, Risk and Compliance: Progress and Strategies to Address Toronto Transit Commission's High Priority Outstanding Recommendations from the Auditor General". The TTC Board: 1. Received the report. 2. Approved forwarding a copy of the report to the Audit Committee. The foregoing is submitted to the Audit Committee for consideration.
The Audit Committee received this Item for information.
Staff recommendation as filed
That: 1. Audit Committee receive the report (September 19, 2019) from the Chief Executive Officer, Toronto Transit Commission, for information.
AU4.17adopted
Robert Gore & Associates, Chartered Professional Accountants, reporting on the Results of Applying Specified Auditing Procedures to Financial Information, other than Financial Statements, for the year ended December 31, 2018, for the Auditor General's Office; and advising that they found no exceptions to the adherence to the policies, procedures and delegated authorities as they applied to a test sample of transactions.
The Audit Committee recommends that: 1. City Council receive the report (June 21, 2019) from Robert Gore & Associates, Chartered Professional Accountants, for information.
Staff recommendation as filed
That: 1. City Council receive the report (June 21, 2019) from Robert Gore & Associates, Chartered Professional Accountants, for information.
AU4.18adopted
Transparency in the City's Financial Information
At its July 16, 2019 meeting, City Council requested the Chief Financial Officer and Treasurer, and the Controller, to review the presentation of the City's budget documents and consolidated financial statements for transparency and understandability, following the Audit Committee June 28, 2019 submission of the City of Toronto's (City) Audited, Consolidated Financial Statements (Statements). This report provides information about the presentation standards used for the City's Statements, including best practices among Canadian municipalities, and provides support for the presentation currently used by the City.
The Audit Committee recommend that: 1. City Council receive the report (October 9, 2019) from the Chief Financial Officer and Treasurer, and the Controller, for information.
Staff recommendation as filed
The Chief Financial Officer and Treasurer, and the Controller, recommend that: 1. City Council receive this report for information.
AU4.19received
Financial Statements for the Year Ended December 31, 2018 - Agencies and Corporations (Part 2)
City Council has received and forwarded the 2018 Financial Statements of the following corporations to the Audit Committee for information: - Build Toronto - Casa Loma Corporation - Lakeshore Arena - Toronto Community Housing - Toronto Hydro - Toronto Pan Am Sports Centre Inc. - Toronto Port Lands.
The Audit Committee received this Item for information.
Staff recommendation as filed
That: 1. Audit Committee receive for information, the 2018 Financial Statements and related documents for the following corporations, having regard that the Statements have previously been considered by City Council: - Build Toronto - Casa Loma Corporation - Lakeshore Arena - Toronto Community Housing - Toronto Hydro - Toronto Pan Am Sports Centre Inc. - Toronto Port Lands.
AU4.20received
Toronto Transit Commission - PricewaterhouseCoopers LLP 2018 Management Letter Follow-Up Report
At its meeting on September 24, 2019 the Toronto Transit Commission Board considered a report, titled "PricewaterhouseCoopers LLP 2018 Management Letter Follow-Up Report". The TTC Board: 1. Received the report. 2. Approved forwarding a copy of the report to the City Clerk for submission to the City of Toronto's Audit Committee for information. The foregoing is submitted to the City of Toronto Audit Committee for information.
The Audit Committee received this Item for information.
AU4.21amended
Arenas - 2018 Audited Financial Statements Update
The purpose of this report is to provide the Audit Committee and City Council with an update on the remaining 2018 audited financial statements of arenas. The 2018 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 external auditor, Welch LLP, advise that they have provided their comments on internal controls to some organizations by way of a report to the Board. The Independent Auditor's Report, accompanying financial statements, and internal control letter (where applicable) is attached to this report.
The Audit Committee recommends that: 1. City Council receive the 2018 audited financial statements of arenas attached to the report (October 4, 2019) from the Auditor General.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the 2018 audited financial statements of arenas attached to this report.
AU4.22adopted
Community Centres - 2018 Audited Financial Statements Update
The purpose of this report is to provide the Audit Committee and City Council with an update on the remaining 2018 audited financial statements of Community Centres. The 2018 audited financial statements for the 10 Community Centres are presented to Audit Committee after approval by their respective Boards of Management. The external auditor, Welch LLP, advise that they have provided their comments on internal controls to some organizations by way of a report to the Board. Each Community Centre's Independent Auditor's Report, accompanying financial statements, and internal control letter (where applicable) is attached to this report.
The Audit Committee recommends that: 1. City Council receive the 2018 audited financial statements of Community Centres attached to the report (October 4, 2019) from the Auditor General.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the 2018 audited financial statements of Community Centres attached to this report.