Audit Committee
The full agenda, as filed
All 7 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.
AU4.1adopted
Auditor General's 2023 Annual Report - Demonstrating the Value of the Auditor General's Office
This report provides information about the Auditor General's Office 2023 activities and the financial and non-financial benefits achieved by the City through its implementation of report recommendations. In 2023, the Auditor General's Office presented eight audit, investigation, cybersecurity, and other reports. The findings and recommendations in these reports focused on: - strengthening the safety of the City's IT systems and critical infrastructure against cyber attacks, including those of the Toronto Transit Commission (TTC) - improving how the City procures and manages its Winter Maintenance contracts and holds contractors accountable to the contract terms - improving the management of contracts and costs of modular housing built to address the housing needs of residents - strengthening Toronto Building's inspection function which contributes to safe buildings - minimizing asset failures and delays of TTC Streetcars through improving the TTC's Overhead Asset maintenance and repair program - providing lessons learned for large Information Technology projects of the City, including the Enterprise Work Management Solution (EWMS) Additionally, our Forensic Unit managed 1,054 complaints through our Fraud and Waste Hotline and conducted some complex investigations, including an investigation into allegations of wrongdoing regarding the building inspections of two houses. Every year, we demonstrate the value our Office brings with a quantified return on investment. The City has achieved cumulative one-time and annually recurring savings projected over a five-year period totaling $387 million (as reported in our 2019 to 2023 Annual Reports) by implementing our recommendations. The cumulative cost of operating the Auditor General's Office from 2019 to 2023 was approximately $32 million. Based on these numbers, for every dollar invested in the Auditor General's Office there was a return of about $12. Equally important is the value that our reports bring through the non-quantifiable benefits, including enhanced cybersecurity and internal controls, robust data analytics, improved policies and procedures, more effective management and use of City resources, better customer service, and stronger security of City assets. Our reports also help to improve the efficiency and effectiveness of programs, systems and processes, the impacts of which are not always easily quantified in financial terms.
The Audit Committee recommends that: 1. City Council direct that Confidential Attachment 1 to the report (February 8, 2024) from the Auditor General remain confidential in its entirety, as it contains information explicitly supplied in confidence to the Auditor General (through the City or one of its agencies or corporations) by another level of government or a Crown agency and financial information supplied in confidence to the Auditor General which, if disclosed, could reasonably be expected to prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council direct that Confidential Attachment 1 to this report remain confidential in its entirety, as it contains information explicitly supplied in confidence to the Auditor General (through the City or one of its agencies or corporations) by another level of government or a Crown agency and financial information supplied in confidence to the Auditor General which, if disclosed, could reasonably be expected to prejudice significantly the competitive position or interfere significantly with the contractual or other negotiations of a person, group of persons, or organization.
AU4.2adopted
Auditor General's 2023 Annual Report on the Fraud and Waste Hotline
This report represents the 2023 annual report on fraud, waste and wrongdoing at the City including the activities of the Fraud and Waste Hotline Program (the Hotline Program). It highlights the complaints that have been communicated to the Auditor General's Office. It does not represent an overall picture of fraud or other wrongdoing across the City. In 2023, 1,054 complaints comprised of approximately 1,450 allegations were received by the Auditor General's Office, the highest in a year since the launch of the Hotline Program and similar to the number of complaints (1,032) received last year. The Hotline Program has helped to reduce losses and resulted in the protection of City assets. The actual and potential losses from complaints received from 2019 to 2023 are $27.7 million (actual losses) plus $1.0 million (potential losses) had the fraud not been detected. Additional benefits that are not quantifiable include: - the deterrence of fraud or wrongdoing - strengthened internal controls - improvements in policies and procedures - increased operational efficiencies - the ability to use complaint data to identify trends, address risks, make action-oriented recommendations to management, and inform our Audit Work Plan.
The Audit Committee recommends that: 1. City Council receive the report (February 8, 2024) from the Auditor General for information.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive this report for information.
AU4.3amended
Toronto Building Division: Audit of Intake and Plan Review of Applications for Building Permits
The Ontario Building Code (Building Code) sets the minimum standards for the design and construction of buildings to minimize risk to the health and safety of occupants. The Building Code includes standards for public health and safety, fire protection, structural sufficiency, and barrier-free accessibility to buildings. The Building Code Act (the Act) requires municipalities to appoint a Chief Building Official (CBO) whose role includes establishing operational policies for the enforcement of the Act and the Building Code and coordinating and overseeing their enforcement. The Auditor General's 2021 Work Plan included a multi-phased operational review of activities and services delivered by the Toronto Building Division. In February 2023, the Auditor General presented the results of the first phase of the operational review in the report "Building Better Outcomes: Audit of Toronto Building's Inspection Function." Phase 1 focused on Toronto Building's operational policies and processes for inspecting construction and issuing orders to enforce compliance with the Act, Building Code, and building permits. This report presents the results of the second phase of the Auditor General's review, which focuses on Toronto Building's operational policies and processes for reviewing applications for building permits, including plans and drawings, for compliance with the Building Code, Zoning by-laws, and other Applicable Law. Our report highlights opportunities for the Chief Building Official to strengthen building permit application intake and plan review processes to better enforce compliance with the Act and the Building Code and improve customer service by: A. Reinforcing quality and consistency in reviewing building permit applications and compliance with legislated time frames B. Enhancing operational policies and strengthening management oversight C. Modernizing technology and data needed to better support building permit application intake and plan review processes
The Audit Committee recommends that: 1. City Council request the Chief Building Official and Executive Director, Toronto Building Division to implement a process to identify, on a periodic basis, areas where applications are frequently determined to be insufficient and proactively educate applicants and the industry on the application submission requirements and ways to avoid processing delays. 2. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to: a. Review and update the items on the Division's checklists used to demonstrate a complete review of building permit applications to confirm compliance with the Building Code, Zoning by-laws and other Applicable Law, and make the checklists available centrally to ensure staff have access to and are using the most current versions of the checklists; b. Review and update the pre-established lists of deficiencies in the building permit information system; and c. Establish a protocol for periodic review of the checklists and pre-established lists of deficiencies to ensure they include up-to-date Building Code and Zoning by-law requirements. 3. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to review and ensure that the control built into the building permit information system is functioning properly to prevent a building permit from being issued for files with open deficiencies. 4. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to: a. Consider implementing a process to have resubmissions and additional information related to building permit applications received centrally and uploaded upon receipt into the building permit information system; b. Improve monitoring of the timely processing and review of resubmissions and additional information; and c. Analyze data for trends and ways to improve resubmission review. 5. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to consider: a. Keeping track of the time spent on files and analyzing data to help the Division manage staff workloads and to assess productivity and whether the optimal number of resources are in place; and b. Whether there is an opportunity for the Division to charge an additional fee for the review of permit applications where the examiners have spent extra time over and above the typical number of hours (e.g., five hours) and circumstances where it may be appropriate to charge additional fees. 6. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to improve compliance with the Closing Inactive Permit Applications policy and implement system functionality to support the tracking of files where exceptions under the policy apply. 7. City Council request the Chief Building Official and Executive Director, Toronto Building Division to reinforce quality and consistency in reviewing building permit applications by: a. Developing operational policies, procedures, or guidelines for Plan Review and Customer Experience staff when reviewing application (re)submissions, including plans and drawings, for compliance with the Building Code, Zoning by-laws, and other Applicable Law; and b. Implementing a protocol for periodic review and update of such operational policies, procedures, or guidelines. 8. City Council request the Chief Building Official and Executive Director, Toronto Building Division to: a. Identify key areas of focus and implement a risk-based approach for supervision and monitoring over building permit application intake, review, and approval. Such an approach should include providing timely and constructive feedback to Customer Experience and Plan Review staff for continuous improvement; and b. Enhance existing Customer Experience and Plan Review audit policies and processes and / or implement additional quality assurance processes including file reviews to verify staff are completing all the required steps and applicable checklists to confirm compliance with the Building Code, Zoning by-laws and other Applicable Law, and are consistently documenting and retaining records of their reviews in the building permit information system. 9. City Council request the Chief Building Official and Executive Director, Toronto Building Division to develop a program of continuous professional development to ensure Customer Experience and Plan Review staff continue to refresh their technical knowledge of Building Code, Zoning by-laws, and other Applicable Law requirements. In developing such a program, Toronto Building Division should: a. Identify what training should be made mandatory for all staff; b. Ensure all training records are centrally retained and accessible for review; and c. Monitor that staff have completed all required training within a reasonable time frame. 10. City Council request the Chief Building Official and Executive Director, Toronto Building Division to develop a formal onboarding program to ensure new staff are familiarized with operational policies and procedures governing building permit application intake and plan review (zoning and / or code review) requirements. As part of this onboarding program, there should be management or supervisory oversight to ensure new staff have completed the required learning and have obtained the necessary base level knowledge and skills. 11. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to ensure that any necessary enhancements to existing system functionality or new modern technology solutions are implemented to: a. Improve workflow management, tracking, recordkeeping, and monitoring of building permit application intake and plan review processes; and b. Support Toronto Building's ability to collect and analyze data to improve the efficiency, effectiveness, and economy of the building permit application intake and plan review processes. 12. City Council request the Minister, Municipal Affairs and Housing to address the urgent issues of building practitioner qualification, training and recruitment by considering steps including restructuring the number of required exams for individuals to prove their technical knowledge and core competencies, and allow certain exemptions based on pre-existing credentials.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council request the Chief Building Official and Executive Director, Toronto Building Division to implement a process to identify, on a periodic basis, areas where applications are frequently determined to be insufficient and proactively educate applicants and the industry on the application submission requirements and ways to avoid processing delays. 2. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to: a. Review and update the items on the Division's checklists used to demonstrate a complete review of building permit applications to confirm compliance with the Building Code, Zoning by-laws and other Applicable Law, and make the checklists available centrally to ensure staff have access to and are using the most current versions of the checklists; b. Review and update the pre-established lists of deficiencies in the building permit information system; and c. Establish a protocol for periodic review of the checklists and pre-established lists of deficiencies to ensure they include up-to-date Building Code and Zoning by-law requirements. 3. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to review and ensure that the control built into the building permit information system is functioning properly to prevent a building permit from being issued for files with open deficiencies. 4. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to: a. Consider implementing a process to have resubmissions and additional information related to building permit applications received centrally and uploaded upon receipt into the building permit information system; b. Improve monitoring of the timely processing and review of resubmissions and additional information; and c. Analyze data for trends and ways to improve resubmission review. 5. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer where required, to consider: a. Keeping track of the time spent on files and analyzing data to help the Division manage staff workloads and to assess productivity and whether the optimal number of resources are in place; and b. Whether there is an opportunity for the Division to charge an additional fee for the review of permit applications where the examiners have spent extra time over and above the typical number of hours (e.g., five hours) and circumstances where it may be appropriate to charge additional fees. 6. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to improve compliance with the Closing Inactive Permit Applications policy and implement system functionality to support the tracking of files where exceptions under the policy apply. 7. City Council request the Chief Building Official and Executive Director, Toronto Building Division to reinforce quality and consistency in reviewing building permit applications by: a. Developing operational policies, procedures, or guidelines for Plan Review and Customer Experience staff when reviewing application (re)submissions, including plans and drawings, for compliance with the Building Code, Zoning by-laws, and other Applicable Law; and b. Implementing a protocol for periodic review and update of such operational policies, procedures, or guidelines. 8. City Council request the Chief Building Official and Executive Director, Toronto Building Division to: a. Identify key areas of focus and implement a risk-based approach for supervision and monitoring over building permit application intake, review, and approval. Such an approach should include providing timely and constructive feedback to Customer Experience and Plan Review staff for continuous improvement; and b. Enhance existing Customer Experience and Plan Review audit policies and processes and / or implement additional quality assurance processes including file reviews to verify staff are completing all the required steps and applicable checklists to confirm compliance with the Building Code, Zoning by-laws and other Applicable Law, and are consistently documenting and retaining records of their reviews in the building permit information system. 9. City Council request the Chief Building Official and Executive Director, Toronto Building Division to develop a program of continuous professional development to ensure Customer Experience and Plan Review staff continue to refresh their technical knowledge of Building Code, Zoning by-laws, and other Applicable Law requirements. In developing such a program, Toronto Building Division should: a. Identify what training should be made mandatory for all staff; b. Ensure all training records are centrally retained and accessible for review; and c. Monitor that staff have completed all required training within a reasonable time frame. 10. City Council request the Chief Building Official and Executive Director, Toronto Building Division to develop a formal onboarding program to ensure new staff are familiarized with operational policies and procedures governing building permit application intake and plan review (zoning and / or code review) requirements. As part of this onboarding program, there should be management or supervisory oversight to ensure new staff have completed the required learning and have obtained the necessary base level knowledge and skills. 11. City Council request the Chief Building Official and Executive Director, Toronto Building Division, in collaboration with the Chief Technology Officer, to ensure that any necessary enhancements to existing system functionality or new modern technology solutions are implemented to: a. Improve workflow management, tracking, recordkeeping, and monitoring of building permit application intake and plan review processes; and b. Support Toronto Building's ability to collect and analyze data to improve the efficiency, effectiveness, and economy of the building permit application intake and plan review processes.
AU4.4adopted
In 2017, the Internal Audit Division (IAD) issued a report of their analysis on a complaint received from the City's Fraud and Waste Hotline. The complaint was in regard to contracted services for the installation and maintenance of traffic signs and outlined four recommendations to improve divisional oversight and vendor performance for Transportation Services (TS). In 2022, the Auditor General's Office (AGO) issued a report of their analysis on a second complaint they received, regarding the same vendor's practices. The Auditor General's Office was then informed by Transportation Services that some of the recommendations from 2017 Internal Audit Division report were not fully implemented. In response, the Auditor General's Office outlined additional recommendations, including recommending that the Corporate Compliance Unit (CCU) within Transportation Services conduct a review on the initial 2017 Internal Audit recommendations and report back to the audit committee. This report provides an overview of the recommendations received from the Internal Audit Division in 2017, outlines the implementation actions taken by Transportation Services staff, which continue to be practiced, includes actions underway to fully implement the remaining partially implemented recommendations and presents the current status of the recommendations under the new contract for the installation and maintenance of traffic signs. In the forth quarter of 2023, the Corporate Compliance Unit conducted a review and found, when counting sub-parts of the recommendations (e.g. 1a to 1e), that of the ten Internal Audit recommendations, six have been fully implemented, while the remaining four remain partially implemented. The reasons for partial implementation include: - limited capabilities of the current work management system (TMMS), - Global Positioning System devices installation and operational challenges, - contract photo submission issues, and - proper documentation for work completed. Corporate Compliance Unit intends to conduct a follow up review with the respective Transportation Services unit in the third quarter to the forth quarter of 2024 to further evaluate the feasibility to fully implement the remaining partially implemented recommendations.
The Audit Committee: 1. Received the report (February 8, 2024) from the General Manager, Transportation Services for information.
Staff recommendation as filed
The General Manager, Transportation Services recommends that: 1. Audit Committee receive the report for information.
AU4.5adopted
City of Toronto Audit Planning Report for the Year Ended December 31, 2023
This report presents the external auditor (KPMG LLP)'s audit planning report for the City of Toronto (City)'s audited consolidated financial statements as of and for the year ended December 31, 2023.
The Audit Committee: 1. Received KPMG LLP's audit planning report for the City of Toronto's audited consolidated financial statements as of and for the year ended December 31, 2023 for information.
Staff recommendation as filed
The Controller recommends that: 1. Audit Committee receive KPMG LLP's audit planning report for the City of Toronto's audited consolidated financial statements as of and for the year ended December 31, 2023 for information.
AU4.6amended
The purpose of this report is to provide the Audit Committee and City Council with the 2021 and 2022 audited financial statements of Arenas and a status update on the outstanding 2022 audited financial statements of Arenas. The 2022 audited financial statements for the eight City Arenas are presented to the Audit Committee after approval by their respective Boards or Committees of Management. Of the eight Arenas, the audited financial statements for two Arenas were previously presented at the December 1, 2023 meeting of the Audit Committee. At the time of preparation of this report, there were two 2022 audited financial statements available for Arenas. This is because the audit for one Arena was in progress, while the audits of the remaining three Arenas had not yet started. Depending on when the audits are completed, the Independent Auditor's Reports, accompanying financial statements and management control letters (if applicable) will be presented at a subsequent meeting of the Audit Committee. This report also provides City Council with the 2021 audited financial statements for the one remaining Arena.
The Audit Committee recommends that: 1. City Council receive the 2022 audited financial statements and management letters, where applicable, of Larry Grossman Forest Hill Memorial Arena and North Toronto Memorial Arena in Attachments 1 to 2 to the report (February 7, 2024) from the Auditor General for information. 2. City Council receive the 2021 audited financial statements of Leaside Memorial Community Gardens Arena in Attachment 3 to the report (February 7, 2024) from the Auditor General for information. 3. City Council request the Board of Larry Grossman Forest Hill Memorial Arena to provide an update to Audit Committee on the implementation of the auditor's 2022 management letter items, for the July 5, 2024 Audit Committee.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council receive the 2022 audited financial statements and management letters, where applicable, of Larry Grossman Forest Hill Memorial Arena and North Toronto Memorial Arena in Attachments 1 to 2 to this report for information. 2. City Council receive the 2021 audited financial statements of Leaside Memorial Community Gardens Arena in Attachment 3 to this report for information.
AU4.7adopted
The purpose of this report is to provide the Audit Committee and City Council with a status update regarding the financial statement audits of Moss Park Arena, Ted Reeve Community Arena, and William H. Bolton Arena for the year ending December 31, 2022. Due to the resignation by Welch LLP on December 6, 2023 to provide the 2022 audits of these three Arenas, this report requests retroactive authorization of the appointment of Kwok & Associate through a non-competitive procurement process. The agreement with Kwok & Associate was finalized by the Auditor General for the purpose of completing the outstanding 2022 financial statement audits for those three Arena Boards. Starting with the 2023 year-end, the three Arena boards will use Grant Thornton LLP, the external auditors authorized by City Council to perform the annual financial statement audits of Arenas.
The Audit Committee recommends that: 1. City Council grant authority retroactively to the Auditor General to appoint Kwok & Associate to perform the financial statement audits for Moss Park Arena, Ted Reeve Community Arena, and William H. Bolton Arena for the year ending December 31, 2022, through a non-competitive procurement process.
Staff recommendation as filed
The Auditor General recommends that: 1. City Council grant authority retroactively to the Auditor General to appoint Kwok & Associate to perform the financial statement audits for Moss Park Arena, Ted Reeve Community Arena, and William H. Bolton Arena for the year ending December 31, 2022, through a non-competitive procurement process.