Toronto Transit Commission - Audit, Finance and Risk Management 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.
TTA6.1adopted
This report appends the Audit Findings Report from KPMG LLP's (KMPG) audit of the TTC's consolidated financial statements for the year ended December 31, 2025. The KPMG Audit Findings Report, in addition to providing an overview of the audit results, specifically details any key audit risks identified, testing procedures performed to address them, and resulting conclusions. KPMG proposes to issue an unqualified Independent Auditor's Report on the TTC's consolidated financial statements for the year ended December 31, 2025.
The Audit, Finance and Risk Management Committee: 1. Received the KPMG LLP Audit Findings Report on the Toronto Transit Commission Consolidated Financial Statements for the Year Ended December 31, 2025 in Attachment 1. 2. Forwarded a copy of this report to the TTC Board for its meeting on June 3, 2026 and subsequently to the City Clerk for appropriate handling to the next City Audit Committee meeting.
Staff recommendation as filed
It is recommended that the Audit, Finance and Risk Management Committee: 1. Receive the KPMG LLP Audit Findings Report on the Toronto Transit Commission Consolidated Financial Statements for the Year Ended December 31, 2025 in Attachment 1. 2. Forward a copy of this report to the TTC Board for its meeting on June 3, 2026 and subsequently to the City Clerk for appropriate handling to the next City Audit Committee meeting.
TTA6.2adopted
The TTC is required to prepare audited annual financial statements under Public Sector Accounting Standards and to forward them to City Council for information through the City's Audit Committee. Effective January 1, 2025, the TTC adopted Canadian public sector accounting guideline amendments to PSG-2 Leased Tangible Capital Assets. The amendments update references within the standard, rename Appendix A as the glossary, and add paragraphs PSG‑2.4A to PSG‑2.4C, which establish minimum requirements for lessee accounting for operating leases of tangible capital assets. As at December 31, 2025, the TTC determined that the adoption of these amendments did not have an impact on the amounts presented in the financial statements. The 2025 accounting surplus is $758.1 million, which reflects an increase of $254.9 million over the 2024 accounting surplus and is comprised mainly of the value of subsidy revenue earned on capital asset additions, and other expenses funded through capital programs, such as environmental liabilities and asset retirement obligations, partially offset by the depreciation of assets in use. Operating activities do not generally contribute to the accounting surplus or shortfall, as operating expenses are funded in full by operating revenues and subsidies received.
The Audit, Finance and Risk Management Committee: 1. Received the appended Draft Consolidated Financial Statements of Toronto Transit Commission for the year ended December 31, 2025. 2. Forwarded this report and the appended Draft TTC Consolidated Financial Statements for approval at the June 3, 2026 Board meeting, and subsequently to the City Clerk for submission to the next City Audit Committee meeting.
Staff recommendation as filed
It is recommended that the Audit, Finance and Risk Management Committee: 1. Receive the appended Draft Consolidated Financial Statements of Toronto Transit Commission for the year ended December 31, 2025. 2. Forward this report and the appended Draft TTC Consolidated Financial Statements for approval at the June 3, 2026 Board meeting, and subsequently to the City Clerk for submission to the next City Audit Committee meeting.
TTA6.3adopted
Draft Annual Report for the Toronto Transit Commission for 2025
Each year, the TTC prepares an Annual Report, which presents the consolidated financial statements of the TTC and its subsidiaries as well as non-financial statement information, including: Chair's Message, CEO's Message, Annual Highlights, Management's Statement, Statistical Information, and the Management Directory. This report presents the materials other than the financial statements, which will be included in the 2025 TTC Annual Report. The 2025 Consolidated Financial Statements have been submitted for the Audit, Finance and Risk Management Committee consideration through the companion report, "Draft Consolidated Financial Statements of Toronto Transit Commission for the Year Ended December 31, 2025".
The Audit, Finance and Risk Management Committee: 1. Approved the non-financial statement information to be published in the 2025 Toronto Transit Commission Annual Report.
Staff recommendation as filed
It is recommended that the Audit, Finance and Risk Management Committee: 1. Approve the non-financial statement information to be published in the 2025 Toronto Transit Commission Annual Report.
TTA6.4adopted
Toronto Transit Commission - 2026 Follow-up - Status of Previous Auditor General’s Recommendations
The Auditor General follows up on the implementation status of outstanding recommendations made through her audit and investigation reports. The purpose is to verify that Auditor General recommendations are fully implemented and that intended benefits are achieved. In this follow-up cycle, we reviewed the status of 41 out of 45 recommendations reported by management as fully implemented or no longer applicable from the following nine reports: Review of Toronto Transit Commission Bus Maintenance and Shops Department, Phase Two: Non-Revenue Fleet and Equipment Management and Maintenance, 2015 Review of Toronto Transit Commission Accounts Payable Functions: Improving Invoice Verification and Vendor Account Management, 2017 Review of Complaint Regarding the June 29, 2016 Toronto Transit Commission Briefing Note, 2017 Review of Toronto Transit Commission Procurement Policies and Practices: A Case Study to Improve Future Wheel-Trans Accessible Taxi Services Procurement, 2018 Toronto Transit Commission: Managing Telecommunication Contracts and Payments, 2018 Review of Toronto Transit Commission Employee Expenses and Reward and Recognition Programs: Opportunities to Improve Policies and Controls and Save Costs, 2018 Review of Toronto Transit Commission's Revenue Operations: Phase One - Fare Evasion and Fare Inspection, 2019 Review of Toronto Transit Commission's Revenue Operations: Phase Two - PRESTO/TTC Fare Equipment and PRESTO Revenue, 2019 Toronto Transit Commission Cybersecurity Audit - Phase Two: Overall Network Security and Cybersecurity Assessment of Select Critical Systems, 2023 (Refer to Confidential Attachment 1 for the recommendations from this report) All recommendations we reviewed in this follow-up were high priority. Of the 41 recommendations we selected for review, we determined 38 are fully implemented, two recommendations are no longer applicable, and one is not fully implemented. The detailed results from this follow-up review are discussed in Attachment 1.
The Audit, Finance and Risk Management Committee adopted the recommendations from the Auditor General, as follows: 1. The Toronto Transit Commission Audit, Finance and Risk Management Committee received this report for information and forwarded the report to the Toronto Transit Commission Board (the Board). 2. The Board forward this report to City Council for information through the City's Audit Committee. 3. The Board 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 TTC.
Staff recommendation as filed
The Auditor General recommends that: 1. The Toronto Transit Commission Audit, Finance and Risk Management Committee receive this report for information and forward the report to the Toronto Transit Commission Board (the Board). 2. The Board forward this report to City Council for information through the City's Audit Committee. 3. The Board 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 TTC.
TTA6.5adopted
Audit, Finance and Risk Management Committee - 2026 Enterprise Risk Management Update
The Audit, Risk and Compliance Department (ARC) has been tasked with progressing the maturity of the Enterprise Risk Management (ERM) Program at the TTC and reports to the Audit, Finance and Risk Management Committee (the Committee) on the status of the ERM Program and changes in the organization's risk profile. The purpose of this report is to provide the Committee with a progress update on key ERM Program initiatives. Key updates to the framework for 2026 include: Alignment with the Audit, Finance and Risk Management Committee Terms of Reference. Updates to the Roles and Responsibilities section. Clarifications on the Five-Step Risk Management Process.
The Audit, Finance and Risk Management Committee: 1. Approved the updated Toronto Transit Commission Enterprise Risk Management Framework (Attachment 1).
Staff recommendation as filed
It is recommended that the Audit, Finance and Risk Management Committee: 1. Approve the updated Toronto Transit Commission Enterprise Risk Management Framework (Attachment 1).
TTA6.6adopted
Annual Review of TTC’s Safety, Health & Environment (SH&E) Management System
The Toronto Transit Commission (TTC) continues to manage and mitigate occupational health and safety, operational safety as well as environmental risks due to its operations, activities, and services in a systematic manner through the implementation and maintenance of its Safety, Health & Environment (SH&E) Management System. A SH&E Management System is a comprehensive and proactive approach to managing SH&E risk. The system goes beyond a simple sum of individual or isolated safety and environmental management programs and activities, such as investigation, inspection, or training. It is designed to improve SH&E performance and reduce risk by integrating all its processes into a continuous improvement cycle of Plan, Do, Check, and Act. A review of the TTC's SH&E Management System is conducted by the TTC's internal Safety, Security, and Environment Executive (SX) Committee on an annual basis. The purpose of the review is to evaluate the suitability, adequacy, and effectiveness of the SH&E Management System, ensuring the ongoing management of SH&E risk. The current review assessed the TTC's SH&E performance in 2025. The review was completed through analysis of the following inputs: Trends in Key Performance Indicators related to occupational health and safety, customer and public safety, operational safety, security, fire and life safety, and capital projects safety; Status of key SH&E projects and initiatives, highlighting significant developments in 2025; Audit and investigation findings, including the American Public Transportation Association's (APTA's) safety peer review; and Regulatory oversight, including regulatory agency interactions, and compliance status. This report includes updates on the TTC's SH&E Goals and Objectives, which have been updated and restructured to align with the TTC's Corporate Internal Business Plan's Safety Objectives and Key Results. In 2025, the TTC also completed an annual review of the written TTC Safety, Health & Environment (SH&E) Policy and TTC Workplace Violence Policy, as required under the Ontario Occupational Health and Safety Act (OHSA). There were no recommended changes to the SH&E Policy commitments. Regarding the 2026 Workplace Violence Policy, the following statement was included: TTC workers will participate in and review workplace violence risk assessments specific to their job task. This change reinforces the TTC's commitment to worker involvement and participation in the workplace risk assessment process, ensuring the policy clearly reflects these principles. The TTC also reviewed and updated its Respect and Dignity Policy, now the Workplace Harassment and Discrimination Policy, which was released February 24, 2026. The TTC's Safety and Environment Department engaged with Union executives in December 2025 to discuss updates to the safety policies, programs and the new Joint Health and Safety Committee (JHSC) feedback portal. The update also included an overview of key actions under the recently approved Community Safety, Security, and Well-being Plan. This report summarizes the full report of the annual review, which was approved by the SX Committee on April 27, 2026.
The Audit, Finance and Risk Management Committee: 1. Reaffirmed support for the approach to continuously improving the effectiveness of the TTC's Safety, Health & Environment Management System, identifying priority safety, health, and environment issues, and developing the TTC's safety, health, and environment objectives, as described in this report.
Staff recommendation as filed
It is recommended that the Audit, Finance and Risk Management Committee: 1. Reaffirm support for the approach to continuously improving the effectiveness of the TTC's Safety, Health & Environment Management System, identifying priority safety, health, and environment issues, and developing the TTC's safety, health, and environment objectives, as described in this report.
TTA6.7received
2025 Uncollectible Accounts Receivable
The Uncollectible Accounts Receivable report is submitted annually to the Audit, Finance and Risk Management Committee for its information in accordance with the TTC's Authorization for Expenditures and Other Commitments Policy. The total value of uncollectible accounts written off for 2025 amounted to $5,707,251.40, and the total annual receivables amounted to $334 million, yielding a collection rate of 98.29%. This report provides information on accounts receivable amounts written off as uncollectible in 2025 under delegated authority.
The Audit, Finance and Risk Management Committee received the 2025 Uncollectible Accounts Receivable report for information.