Report to / Rapport au:
Finance and Economic Development Committee
Comité des finances et du développement économique
and Council / et au Conseil
29 March 2011 / le 29 mars 2011
Submitted by / Soumis par: Audit Sub-Committee/Sous-comité de la vérification
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City Wide / À l'échelle de la Ville |
Ref N°: ACS2011-CMR-ASC-0002 |
SUBJECT: OFFICE OF THE AUDITOR GENERAL (OAG) - 2011 workplan, REPORTING PROTOCOL AND ADMINISTRATION
OBJET: BUREAU DU VÉRIFICATEUR GÉNÉRAL (BVG) – PLAN DE TRAVAIL 2011, PROTOCOLE RELATIF À LA PRÉSENTATION DE RAPPORTS ET GESTION
That the Finance and Economic Development Committee recommend Council approve the following, as described in this report:
1. OAG 2011 Workplan, as amended by the following;
That item 7, "Selected Grant Recipients", be amended to focus on a broader review of the City's grant program;
2. OAG reporting protocol;
3. Administrative procedures; and,
4. That the City Clerk and Solicitor be delegated the authority to make the required changes to the By-law governing the OAG and the Terms of Reference for the Audit Sub-committee to reflect the changes approved with this report.
Que le Comité des finances et du développement économique recommande au Conseil d'approuver ce qui suit, tel que présenté dans le présent rapport :
1. Plan de travail du BVG pour 2011 tel que modifié par ce qui suit;
Que le point 7, Selected Grant Recipients (Bénéficiaires de subvention déterminés), soit modifié de façon à porter sur un examen élargi du programme de subventions de la Ville;
2. Protocole de présentation de rapports du BVG;
3. Procédures administratives; et,
4. Que le Greffier municipal et chef du contentieux soit délégué l’autorité d’apporter les changements requis au règlement régissant le BVG ainsi qu’au mandat du Sous-comité de la vérification pour rendre compte des changements approuvés dans le présent rapport.
CONSULTATION
This item will be advertised in the local dailies as part of the Public Meeting Advertisement on Friday preceding the Committee meeting.
There are no legal/risk management implications related to this report.
There are no financial implications related to this report.
SUPPORTING DOCUMENTATION
Document 1 - Auditor General report titled “Office of the Auditor General (OAG) – 2011 Workplan, Reporting Protocol and Administration” (ACS2011-OAG-BVG-0001)
Document 2 - Extract of Minutes from 24 January 2011 meeting of the Audit Sub-Committee
Document 3 – Extract of Draft Minutes from the 22 March 2011 meeting of the Audit Sub-Committee
Staff to implement Council’s decision.
DOCUMENT 1
Sous-comité de la vérification
Finance and Economic Development Committee
Comité des finances et du développement économique
and Council / et au Conseil
20 January 2011 / le 20 janvier 2011
Submitted by/Soumis par : Alain Lalonde, Auditor General/Vérificateur général
Contact Person/Personne ressource : Alain Lalonde, Auditor General/Vérificateur général
(613) 580-2424 x14226, oag@ottawa.ca
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Ref N°: ACS2011-OAG-BVG-0001 |
That the Audit Sub-Committee table this report, for consideration at its subsequent meeting.
That the Audit Sub-Committee recommend that the Finance and Economic Development Committee recommend Council approve the following, as described in this report:
Que le Sous-comité de la vérification dépose ce rapport, pour considération à sa prochaine réunion.
Que le Sous-comité de la vérification recommande que le Comité des finances et du développement économique recommande au Conseil d'approuver ce qui suit, tel que présenté dans le présent rapport :
The OAG's 2009 Annual Report, which was received by Council in June 2010, contained the following 2011 workplan:
1. Performance Measurement
2. Strategic and Environmental Services Division
3. Road Resurfacing Program
4. By-Law and Regulatory Services – Licensing and Programs
5. Occupational Health and Safety
6. Records Management
7. Selected Grant Recipients
8. Audits arising from the Fraud and Waste Hotline
9. Audits arising from Requests by Council
10. Follow-up of Selected Completed Audits
At its meeting of 8 December 2010, Council approved the following motion:
Moved by Councillor P. Hume
Seconded by Councillor P. Clark
WHEREAS Section 224 (d) and (d.1) of the revised Municipal Act, 2001 establishes that it is the role of City Council “to ensure that administrative policies, practices and procedures and controllership policies, practices and procedures are in place to implement the decisions of council” and “to ensure the accountability and transparency of the operations of the municipality, including the activities of the senior management of the municipality”; and
WHEREAS Section 8 of the Auditor General’s By-law, approved by City Council on November 28, 2007, currently reads as follows:
8. (1) The Auditor General shall submit an annual audit plan for the next following year to Council for information by December 31st of each year.
(2) The Auditor General may, at his or her discretion, prepare a longer term audit plan for submission to Council.
(3) No deletions or amendments to the annual audit plan shall be made except by the Auditor General; and
WHEREAS the Auditor General is an important part of City Council’s accountability and oversight structure and, as such, City Council should take a more active role working with the Auditor General to determine audit priorities;
THEREFORE BE IT RESOLVED THAT the Auditor General’s annual audit plan be approved by City Council following a recommendation by the Audit Sub-Committee and the Finance and Economic Development Committee; and
BE IT FURTHER RESOLVED THAT, due to the timelines of a newly elected Council, that the Auditor General be requested to bring his recommended 2011 Audit Plan to the first meeting of the Audit Sub-Committee in January 2011 for review and recommendation to the Finance and Economic Development Committee and Council.
In addition to the 2011 workplan, and as input into defining the Terms of Reference for the Audit Sub-Committee (ASC), this report also outlines other procedural and administrative issues requiring Council approval.
The draft 2011 budget of the OAG is currently set at $1.567 million. The workplan proposed below assumes this level of funding will be maintained for 2011. Any change in this funding will require a corresponding change in the workplan.
The methodology used to develop our audit plans includes the following key steps:
1. Meetings with Councillors and Senior Managers;
2. Review of budget documentation;
3. Review of former audits conducted at the City;
4. Review of audit plans from other municipalities;
5. Input from Auditor General’s staff;
6. Meetings with external auditors and review of management letters; and,
7. Assessment of programs and services against selection criteria and risk analysis.
Several specific selection criteria were used to identify potential projects and select the audits outlined in the plan, including:
1. Program/Service has direct impact on citizens;
2. Risk/Impact of service disruption on public safety, convenience, financial exposure;
3. Discussions with Council, Senior Management;
4. Budget size (including number of staff);
5. Last time audited; and,
6. Fraud and Waste Hotline reports received.
The following projects are recommended to be included in the revised 2011 plan:
1. Vacant Position Management
2. Corporate Communications
3. Procurement Practices:
a. Public Sector Cooperative Purchasing Programs
b. Bulk Purchasing
c. Green Bin Contract
d. IT Hardware
4. Performance Measurement
5. Occupational Health and Safety
6. Human Resources Master Plan
7. Selected Grant Recipients:
a. Petrie Island Canada Day Event
b. West Fest
c. Hunt Club Riverside Community Services Centre
8. Budgeting for Growth Funding
9. Follow-up of Completed Audits including:
a. Five Specific Staffing Processes
b. Specific Contracts at the NNEP
c. Bridge Maintenance Program
d. Bridge Maintenance Process for a Specific Bridge
e. Payroll
f. Eight Specific Building Code Services Files
g. Specific House Drawings
The objective of a comprehensive audit is to conduct a thorough audit of all aspects of the City’s operations, programs or services. The scope of these audits includes an examination of Compliance, Financial Management and Performance or Value-for-Money which examines management practices in order to assess the economy, efficiency and effectiveness of current operations. Based on comments received from members of Council, there is interest in placing a greater emphasis on economy and efficiency in conducting audits. As such, this will be the overall focus for 2011.
B. Reporting Protocol for the OAG Annual Report:
With the creation of the Audit Sub-committee, a revised reporting protocol for the OAG Annual Report will be necessary. In keeping with the Terms of Reference of the Finance and Economic Development Committee, the following protocol is recommended:
1. A Notice of Tabling will be provided to Council.
2. Annual Report tabled at the Audit Sub-committee (ASC).
3. Annual Report referred to various Standing Committees as directed by ASC.
4. Annual Report presented to Council for final discussion and questions.
5. Any recommendations where management does not agree are to be brought to the Audit Sub-committee or other Standing Committee as directed by Council for resolution.
Based upon the input received from Council, no more than one report per year will be issued by the OAG. The 2010 Annual Report will be provided to Council in the fall 2011. This report will include the following audits:
1. Audit of the Use of City Vehicles and Mileage Claims
2. Audit of Selected Grant Recipients – Signed Agreements and Audit Clauses
3. Audit of the Management of the City’s Unique Facilities
4. Audit of Revenue Branch
5. Audit of OC Transpo Scheduling Process for Bus Operators
6. Audit of Specific Staffing Processes in Children's Services Branch
7. Audit of a Specific Loan Agreement
8. Audit of a Specific Canada Day Event
9. Audit of Internet and Email Usage Policies and Procedures
10. Audit of the Mackenzie King Bridge Rehabilitation
11. Determination of Sampling for Payroll Reviews
12. Audit of Specific Compressed Work Week Agreements - EFA Social Services Centre South
13. Audit of the City's Operating Relationship with OCRI
14. Audit of the Glen Cairn Flooding and the Development Review Processes within the Carp Watershed
15. Audit of a Specific Paving Contract
16. Follow-up to the 2008 Audit of the Children's Services Division
17. Follow-up to the 2008 Audit of the Assessment and Monitoring of Eligibility for Social Housing Subsidies
18. Follow-up to the 2008 Audit of Information Technology Capital Expenditures and Project Approval Process
19. Follow-up to 2008 Audit of the Long Term Care Branch
20. Follow-up to the 2008 Audit of the Ottawa Paramedic Service
21. Follow-up to the 2007 Audit of Parks and Recreation Branch
22. Follow-up to the 2007 Audit of Parks and Recreation Financial Management and Revenue Processes
23. Follow-up to the 2008 Audit of Building Code Services Process for 215 Preston Street
24. Follow-up to the 2008 Audit of Hospitality and Other Ethical Matters
25. Follow-up to the 2008 Audit of Parking Function
26. Follow-up to the 2008 Audit of Sick Leave Management
27. Follow-up to the 2008 Audit of Traffic Operations Division
28. Follow-up to the 2007 Audit of the Carp River Watershed Study and Related Projects
29. Follow-up to the Audit of 2006 and 2007 Compensation Budgets
30. Follow-up to the 2005 Audit of the Internet Usage and Controls
31. Follow-up to the 2008 Audit of the City of Ottawa Water Rate
32. Follow-up to the 2005 Audit of Drinking Water Services
33. Follow-up to the 2006 Audit of the Wastewater and Drainage Services Division
34. Follow-up to the 2006 Audit of the Food Safety Program
35. Follow-up to the 2006 Audit of an EFA Staff Member
36. Follow-up to the 2008 Audit of the 2006 Sewage Spill
C. Additions to the Workplan:
As stated in the By-law governing the OAG, requests by Council for additions to the workplan shall be subject to the provision of appropriate funding. The following protocol is recommended for adding projects to the 2011 workplan:
1. In the event a member of Council wishes to add an audit, an approved motion from ASC and Council will be required as per the process to be developed in conjunction with the Clerk.
2. In the event the Auditor General determines that an additional audit, including audits arising from the Fraud and Waste Hotline, should be undertaken, this is to be discussed with the Mayor, the Chair, ASC before proceeding to ASC for approval.
D. Fraud and Waste Hotline:
The creation of the Audit Sub-committee also provides an opportunity to formalize matters related to the Fraud and Waste Hotline. The following is recommended:
1. In keeping with industry best-practice regarding Fraud and Waste Hotline reports, all reports should be provided to both management and a representative of the board of directors. Accordingly, all Hotline calls are to be distributed to the Mayor, the Chair, ASC and to the City Manager for action.
2. In accordance with the Council motion of 9 December 2009 concerning the Fraud and Waste Hotline, the Auditor General, in consultation with the Mayor, the Chair, ASC will determine which Fraud and Waste Hotline calls are to be reported in the Annual Report.
E. Administrative Matters:
The Mayor will approve all administrative matters related to the Auditor General position including leave requests, expense claims. The Audit Sub-Committee will be responsible for the 2008, 2009 and 2010 performance appraisals of the Auditor General. The Auditor General will retain responsibility for this with respect to the staff of the OAG as per the current By-law.
F. Legal Matters:
The issues outlined above will require revisions to the current By-law governing the OAG. As such, it is recommended that the City Solicitor undertake a review of the By-law and present the necessary revisions for Council approval.
Consultation with all members of Council was undertaken in the preparation of this report.
There are no financial implications to this report.
Upon approval by Council, the OAG will begin work on the 2011 audits. Upon approval by Council, the City Solicitor will prepare a revised by-law governing the OAG and the Terms of Reference for the Audit Sub-committee for approval by Council to reflect the changes approved with this report..
OFFICE OF THE AUDITOR GENERAL (OAG) - 2011 workplan, REPORTING PROTOCOL AND ADMINISTRATION
BUREAU DU VÉRIFICATEUR GÉNÉRAL (BVG) – PLAN DE TRAVAIL 2011, PROTOCOLE RELATIF À LA PRÉSENTATION DE RAPPORTS ET GESTION
ACS2011-OAG-BVG-0001 city-wide / À l’Échelle de la ville
Mr. Alain Lalonde, Auditor General, introduced this item by explaining that in the previous few weeks, staff had met with all members of Council to get their input into the 2011 Audit Plan and to discuss the functioning of the Audit Sub-Committee. He indicated what was before Committee was the result of these consultations. He noted that the 2011 Audit Plan was a combination of new requests and items from the previous Audit Plan, which Council had received the previous June. He added, this Plan was based on the proposed 2011 Budget envelope. He then talked about the Audit Sub-Committee, expressing his belief that this was a good initiative as it would help the Office of the Auditor General (OAG) present its recommendation, discuss them and have a good exchange on their implementation. He advised that, based on staff’s meetings with Members of Council, it was clear that one the priorities was to find savings and he stated this would be his office’s focus.
Councillor Wilkinson noticed the list of audits proposed for 2011 was very long and she wondered if staff could accomplish it within the proposed budget envelope. Mr. Lalonde responded affirmatively, adding that staff had adjusted the workplan following the previous week’s tabling of the draft 2011 budget. He expressed his confidence in being able to complete the audit program.
Councillor Wilkinson referenced the reporting mechanism associated with the Fraud and Waste Hotline and wondered if Members would receive a listing to update them on how these were resolved. Chair Chiarelli suggested getting a preliminary opinion on this from the Auditor General. However, he felt this should be discussed after the reports were tabled.
Councillor Wilkinson noted that in recent years, the City had moved towards a process of tabling Audit reports in a more timely fashion rather than on an annual basis. However, she indicated the current report talked about an annual tabling. She wondered if this meant that more timely report would not longer happen or whether it could still be done on request. Mr. Lalonde advised that when he discussed this with Members of Council, most preferred that reports be tabled only once per year so the exercise could be focused. However, he recommended that if Councillors wanted a report tabled early, this could be discussed with the Sub-Committee Chair or directed by Council. He stated he would follow Council’s or Committee’s directions in this regard.
Councillor Bloess referenced the grant recipients identified in the audit plan. He noted that staff was revamping the granting process and he wanted to ensure this was in sync with staff’s process in this regard. However, he wondered how the three identified in the audit plan had been selected; whether it was based on a random sampling or in terms of materiality. Mr. Lalonde explained there were two reasons why the identified grant recipients had been selected. First, staff was conducting a similar audit on a Canada Day event and understood that Petrie Island was also a major event occurring so they wanted to see if the issue being review in association with the other Canada Day event was also happening at Petrie Island. In terms of the other grants, he indicated staff was trying to select grants that were representative of the different types of grants, noting the ones identified in the audit plan had also been mentioned by Members of Council, which was why staff had selected them.
Councillor Egli inquired about the audit of the OC Transpo scheduling process. He wondered if it would look solely at the internal scheduling process or whether it would also look at the impact on ridership. Mr. Lalonde indicated this audit was well underway and it was looking at scheduling following the arbitrator’s decision as well as the anticipated results and savings. What the Councillor referenced was not part of the original scope of the audit, given the resources. However, he advised that he could look at the communication aspect of it, in terms of the public interface.
Councillor Egli stated this would be much appreciated.
Responding to questions from Councillor El-Chantiry with respect to the proposed audit plan for 2011, Mr. Lalonde confirmed that staff would provide a brief summary of each of the proposed audits and an explanation of why each project was selected, staff’s intention in conducted the audits and the scope of same. He remarked that Council could decide to have different projects, however with respect to timelines and priorities, he explained that all audits started at the same time in order to meet reporting deadlines.
Councillor El-Chantiry recognized that the list had been compiled based on staff’s discussions with individual Members of Council and that the intent was for the Sub-Committee to approve the plan and prioritise the scope. However, he inquired as to the ability to add to or subtract from the list. Mr. Lalonde confirmed that the Sub-Committee could add to or subtract from the list. He maintained it was not a matter of establishing priorities as his intention was to complete the entire plan being proposed for 2011. That being said, he re-iterated that if there was a different area where Members would like staff to look, they could do so, though if projects were added, others would have to come off.
Councillor El-Chantiry stated his recommendation was that Committee should set the priorities.
Councillor Desroches noted that the 2011 audit workplan proposed a number of follow-up work, which he felt was sound. However, he remarked that many of the audits in question were conducted in 2008. Therefore, he wondered if enough time had elapsed or whether it was too soon to undertake the follow-ups. Mr. Lalonde indicated the City Manager had raised the concern with him the previous week. However, he remarked that most of the recommendations arising from the 2008 audits had implementation dates of 2010 or 2011. He explained that if a recommendation was scheduled for implementation in 2011 or 2012, then at the time of the follow-up, staff would evaluate the recommendation’s implementation status to that point. He maintained that Audit staff would take Management’s plans into consideration and report to Council on the status of the recommendations’ implementation. He submitted this was a standard timeframe for going back and assessing the implementation of each recommendation. He did not expect all recommendations to be fully implemented, in light of the original implementation plan. However, he re-iterated that most were scheduled to be implemented in 2010.
Councillor Desroches felt that if the Auditor General reported that some recommendations’ implementation had been delayed because of shifting priorities within the organization but that Management was still intent on moving forward, this would be fine. He did not think Council should be too hard on staff if they intended to implement recommendations, were on the way to doing so and had valid reasons for the delay because he believed that, when putting together the Management response to Audit recommendations, managers had to look to the future, consider budget implications, and give their best estimates as to when something could be done. Therefore, if the Auditor General found some negligence or inertia in moving forward, that would be an issue, but if staff was working on something and had reasons for the delay, he felt that was fair. Mr. Lalonde re-iterated that he did not expect all recommendations to be 100% implemented. He explained it was more about the mindset and whether management was moving in the direction approved by Council.
Responding to a question from the Councillor with respect to the audit of the Ottawa Centre for Research and Innovation (OCRI), Mr. Lalonde reported that staff had almost completed the field work on this audit and it was very positive. He indicated he would probably recommend going back in two years to see the changes, since that organization’s relationship with the City was evolving significantly.
Picking up on the point raised earlier with respect to the audit of OC Transpo scheduling, Councillor Desroches noted the City was in the process of undertaking a new collective agreement and he wanted assurances that the Auditor General’s work would be sensitive to this and would not cause any problems for the collective bargaining process. Mr. Lalonde confirmed that he would be working very closely with the City Clerk and Solicitor and the Audit Sub-Committee Chair to ensure the tabling of that audit would not interfere with the City management process.
Councillor Desroches talked about the issue of procurement and the fact that the City had created a position of Chief Procurement Officer. He believed one of the benefits of amalgamation was a stronger purchasing power, an area consistently identified for efficiencies. He was interested in seeing how the new initiative was rolling out in terms of having a stronger, centralized procurement process and he wondered if this was part of the audit plan. Mr. Lalonde confirmed this was a major focus of the work plan; looking into the procurement function to achieve savings and partnering with outside public agencies such as hospitals and other government agencies.
Responding to further comments from the Councillor with respect to purchasing power and greater opportunities to partner for savings, Mr. Lalonde indicated that in his audit report, he hoped to not only talk in theory, but also provide examples where the City could achieve savings and to identify ways of achieving these savings; recommending ways to work differently in order to achieve goals.
Councillor Desroches indicated he viewed the Auditor General’s work as a way to help management and Council make decision to move the organization forward by providing concrete recommendations on which everyone could agree, resulting in a stronger, more efficient organization. Mr. Lalonde agreed, suggesting that the new Audit Sub-Committee would take full advantage of the process. He believed what Members of Council wanted to see in the reports were different ways of doing things and discussions on how to implement new practices.
That the Audit Sub-Committee table this report, for consideration at its subsequent meeting.
That the Audit Sub-Committee recommend that the Finance and Economic Development Committee recommend Council approve the following, as described in this report:
1. OAG 2011 Workplan;
2. OAG reporting protocol;
3. Administrative procedures; and,
4. That the City Clerk and Solicitor be delegated the authority to make the required changes to the By-law governing the OAG and the Terms of Reference for the Audit Sub-committee to reflect the changes approved with this report.
tabled
DIRECTION TO STAFF:
That staff provide details on the scope, basis and rationale for each audit proposed in the 2011 workplan.
OFFICE OF THE AUDITOR GENERAL (OAG) - 2011 workplan, REPORTING PROTOCOL AND ADMINISTRATION
BUREAU DU VÉRIFICATEUR GÉNÉRAL (BVG) – PLAN DE TRAVAIL 2011, PROTOCOLE RELATIF À LA PRÉSENTATION DE RAPPORTS ET GESTION
ACS2011-OAG-BVG-0001 city-wide / À l’Échelle de la ville
Mr. Alain Lalonde, Auditor General, reminded Sub-Committee Members that the above-noted report was tabled on January 24th, for consideration at the current meeting, and that, further to a direction given on January 24th, he had provided a brief summary of each project proposed in his 2011 workplan. He then welcomed questions on the item.
Councillor Bloess referenced Part C of the report, which indicated that any requests for additions to the workplan would be subject to provision of the appropriate funding. He saw that as a two-edged approach noting that in the past, Members of Council were able to make adjustments to the Auditor General’s workplan without actually adding to the budget when there was a desire to add something over the course of the year. He wondered if Council would still be able to do this. Mr. Lalonde remarked that his office’s annual budget used to be between $1.8M and $1.9M and he submitted that with his current budget, as recently approved by Council, he no longer had as much flexibility. Having said that, he believed Council could still achieve the same thing, either by removing some pieces of an audit or delaying something for one year. He suggested that, if Council decided to have a new audit conducted, he could discuss it with the Committee Chair and provide options.
Councillor Bloess indicated he continued to have concerns about the Fraud and Waste Hotline becoming a tool for vendettas. He recognized the importance of having it, but he also wanted to protect staff. Therefore, he asked for some reassurance surrounding the reporting in this regard. Mr. Lalonde proposed that every issue reported to the hotline would be provided to management, to the Audit Sub-Committee Chair and to the Mayor. Because he could not make the decision as to what to report and what not to report, he suggested that the Audit Sub-Committee Chair and the Mayor should decide what should and what should not be brought to the attention of all Members of Council. That being said, he confirmed that all Members of Council would continue to receive reports on the number of calls to the hotline, the different categories of calls, etc.
Councillor Desroches referenced item 4 of the proposed 2011 audit plan with respect to Performance Measurement. He felt the City was on the right track in terms of benchmarking, reporting on performance measurements and working with other jurisdictions in this regard. However, he raised the issue of performance measures relative to Ottawa Community Housing, noting that the waiting list seemed to be the measure. He remarked that the waiting list never seemed to dip below 10,000 despite significant investments made in housing each year. He wondered if the Auditor General would consider looking at that specific area in terms of what would be useful performance measures. Mr. Lalonde responded affirmatively, adding that staff would seek advice and resquests from Members of Council in this regard. He noted that there were dozens of potential performance indicators. Therefore, he would consult members of Council to try to identify 5 or 10 specific ones, which staff could then research and see what other jurisdictions were doing. He remarked that Council was looking for a more proactive and helpful process and he would provide a report that not only identified areas for improvement, but that also proposed solutions, which Council could then decide to adopt or adjust.
Councillor Desroches liked the approach of looking to see what other jurisdictions, noting that all levels of government were striving to have better performance measures. He asked for the City Manager’s thoughts on how the Auditor General could be helpful in this regard and on housing performance measures in general. Mr. Kent Kirkpatrick, City Manager, indicated he would have to turn his mind to the specific issue of housing and performance measurement. He noted that the City was a participant in the Ontario Municipal Benchmarking Initiative (OMBI), which was a leading practice in Canada in terms of municipal benchmarking and performance reporting. He reported that other jurisdictions were interested in piloting a similar framework. He referenced the fact that the City provided quarterly performance reports where staff identified other indicators that were important in terms of service delivery and strategies of various departments. The other relevant context he referenced related to previous audit in which the Auditor General had looked at the Management Control Framework and had some significant comments on how the City needed to do a better job identifying Council’s long-term priorities, the community’s long-term priorities and developing those into a performance reporting and management control framework. He referenced a motion, introduced by Councillor Blais during the recent budget deliberations, in regards to a balanced scorecard. He indicated that at the time, he advised Council of management’s plan to bring forward a recommendation on an integrated planning framework where staff would work with Council to establish priorities and take that down into a new structure of balanced scorecards for each major department and, using that, report to Council and to the public on the City’s performance against initiatives related to strategic objectives. He advised that a lot of work was being done in this regard and, in working with the Auditor General (AG), he hoped to have the AG look at what management staff was in the process of implementing and provide commentary on it in terms of its adequacy and effectiveness.
Responding to a follow-up question from Councillor Desroches with respect to the volume of work already underway, Mr. Lalonde confirmed that his office would look at it in a constructive way.
Councillor Desroches referenced the proposed 2011 audit plan, which would look at five specific staffing processes, eight specific building code service files, and selected grant recipients. He imagined there was some merit in looking at everything the City does and he believed these had been identified as worthy of some scrutiny. However, he questioned the overall benefit of these. He asked the Auditor General to outline what his approach would be with these as he hoped the audit would provide some macro recommendations, which would apply to a broader program and not just the individual cases. Mr. Lalonde explained that the five specific staffing processes and the eight building code service files related to past audits where the recommendations were broad in that they did not address the specific cases but rather the processes. He explained the follow-up audits proposed for 2011 were strictly to see the status of management’s action plans for implementing the original audit recommendations and whether or not they were on track in terms of the previously identified timelines for same. Therefore, he maintained these audits did not propose to rehash what was reviewed in 2008 and 2009.
Councillor Desroches was concerned that if an audit looked at one or two specific cases, it did not necessarily give a good overview of the program. He submitted that if the Auditor General looked at a program overall and then reviewed a sampling of cases, this would provide some confidence that the audit had looked at the good and the bad and potentially had some balance in it as opposed to just looking at specific cases where there were areas of concern. He maintained the importance of having some macro perspective on how programs were doing overall in order to focus on lessons learned and to strengthen accountability and performance. Mr. Lalonde maintained that Council had requested these types of issues. He advised this had been, and would continue to be a topic of discussion between himself and the City Manager in terms of different approaches on auditing and reporting and the type of information to be provided.
As a solution, Councillor Chiarelli suggested taking a global approach but having a couple of examples in the report.
With respect to the proposed grant audits, Mr. Lalonde noted that grants of over $100,000 were reported to Committee and Council, therefore Council had a pretty good idea what was going on in this area. Accordingly, he suggested looking at all grants under $10,000 instead of looking at specific events, as proposed in his audit plan. He believed these grants represented over $1.2M and were not reported to Council because they were done administratively. He proposed this as an option, which he believed would address Councillor Desroches’ concerns in terms of looking at the broad picture and not target specific issues.
Responding to questions from Councillor Wilkinson with respect to the Audit Sub-Committee’s meeting schedule and the timing for audit reports, Mr. Lalonde proposed to provide a notice of tabling at the August 24th meeting of Council. He indicated he would then table his report on September 8th, have it go to the various Standing Committees in September and have it back at Council either on September 28th or October 12th. He indicated he would work with the Clerk’s office with respect to the timing and to schedule the referral to the various Standing Committees.
In response to questions from the Councillor with respect to audit recommendations being handled within existing City resources, Mr. Lalonde stated this had been the practice for the past four or five years. He maintained this audit plan was focused on savings and he hoped the savings identified through the audits would offset any implementation costs. He indicated his report would clearly identify potential savings as well as potential implementation costs so that management will have a chance to respond and so that at the end of the day, it would be a Council decision.
At this juncture, Committee voted on a motion introduced by Councillor Desroches.
Moved by Councillor S. Desroches
That item 7, “Selected Grant Recipients”, be amended to focus on a broader review of the City’s grant program.
CARRIED
Responding to a question from Councillor Hubley with respect to the proposed Occupational Health and Safety audit, Mr. Lalonde explained his intent was to focus on the function itself and how it was managed within Human Resources. He confirmed that the audit would probably focus on one or two major departments, the major one being Public Works, though he indicated he would scope it to be precise in his evaluation.
Committee then voted on the item as amended.
That the Audit Sub-Committee recommend that the Finance and Economic Development Committee recommend Council approve the following, as described in this report:
1. OAG 2011 Workplan, as amended by the following;
That item 7, "Selected Grant Recipients", be amended to focus on a broader review of the City's grant program;
2. OAG reporting protocol;
3. Administrative procedures; and,
4. That the City Clerk and Solicitor be delegated the authority to make the required changes to the By-law governing the OAG and the Terms of Reference for the Audit Sub-committee to reflect the changes approved with this report.
CARRIED, as amended