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4. COUNCIL AUDIT WORKING GROUP - 2005 and
2006 AUDIT RECOMMENDATIONS - QUARTERLY ACTION STATUS REPORt GROUPe de travail du
conseil sur la vérification -
recommandations découlant des vérifications de 2005 et DE 2006 -
rapport d'étape trimestriel |
Committee RecommendationS
That Council:
1.
Receive for information the ongoing action status tracking report
for the 2005 audit recommendations as of May 2008, as outlined in Document 1;
and
2.
Approve the changes with respect to implementation for the following
2006 audit recommendations as outlined in Document 2, specifically:
a.
Financial Control Environment Audit
recommendation no. 4 b)
b.
Financial Control Environment Audit
recommendation no. 10
3. Receive for information
the ongoing action status tracking report for the 2006 audit recommendations as
of May 2008, as outlined in Document 3..
RecommandationS du comité
Que le Conseil :
1.
prenne connaissance du rapport sur
l’état de la mise en œuvre des recommandations découlant de la vérification de
2005 à partir du mois de mai 2008, comme le précise le document 1;
2. approuve les modifications
visant la mise en œuvre des recommandations suivantes découlant de la
vérification de 2006 énoncées dans le document 2, à savoir :
a)
recommandation no 4 b)
concernant la vérification de l’environnement de contrôle financier;
b)
recommandation no 10
concernant la vérification de l’environnement de contrôle financier;
3. prenne
connaissance du rapport sur l’état de la mise en œuvre des recommandations
découlant de la vérification de 2006 à partir du mois de mai 2008, comme le
précise le document 3.
Documentation
1. Council Audit Working Group’s report dated 11
August 2008 (ACS2008-CMR-OCM-0007).
2. Extract of Draft Minutes, 19 August 2008
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
11 August 2008 / le 11 août 2008
Submitted by/Soumis par : Council Audit Working Group / Groupe
de travail du Conseil sur la vérification
Contact
Person/Personne ressource : Kent Kirkpatrick, City Manager /
Directeur des services municipaux
(613) 580-2424 x 25657,
kent.kirkpatrick@ottawa.ca
REPORT RECOMMENDATIONS
That the Corporate Services and Economic Development
Committee recommend Council:
3.
Receive for information the ongoing action status tracking report
for the 2005 audit recommendations as of May 2008, as outlined in Document 1;
and
4.
Approve the changes with respect to implementation for the following
2006 audit recommendations as outlined in Document 2, specifically:
c.
Financial Control Environment Audit
recommendation no. 4 b)
d.
Financial Control Environment Audit
recommendation no. 10
3. Receive for information the ongoing
action status tracking report for the 2006 audit recommendations as of May
2008, as outlined in Document 3.
RECOMMANDATIONS DU
RAPPORT
Que le Comité des
services organisationnels et du développement économique recommande au
Conseil :
2.
de prendre connaissance du rapport
sur l’état de la mise en œuvre des recommandations découlant de la vérification
de 2005 à partir du mois de mai 2008, comme le précise le document 1;
2. d’approuver les modifications visant la
mise en œuvre des recommandations suivantes découlant de la vérification de
2006 énoncées dans le document 2, à savoir :
a)
recommandation no 4 b)
concernant la vérification de l’environnement de contrôle financier;
b)
recommandation no 10
concernant la vérification de l’environnement de contrôle financier;
3. de
prendre connaissance du rapport sur l’état de la mise en œuvre des
recommandations découlant de la vérification de 2006 à partir du mois de mai
2008, comme le précise le document 3.
BACKGROUND
Since the establishment of the Council Audit Working Group (CAWG) in May 2006, the group has been meeting on an ongoing basis with the City Manager, the Auditor General and City staff as required.
The Corporate Services and Economic Development Committee and City Council have considered and approved previous quarterly reports on the 2005 and 2006 audit recommendations action status as well as an adjustment to implementation of recommendations for some of the audit recommendations under dispute.
The purpose of this report is to provide the Corporate Services and Economic Development Committee and Council with the following:
DISCUSSION
The CAWG was created to oversee the implementation of the audit recommendations and provide a body for discussion with the Auditor General, appointed members of Council and senior management to further discuss the audit recommendations under dispute or where circumstances may have changed.
When considering the total number of recommendations coming forward from the Auditor General through his audit reports, it should be noted that there are an overwhelming number of recommendations supported by management that are being implemented on an ongoing basis. In looking at the overall picture, the number of recommendations that require further discussion by the CAWG represents a very small percentage.
The primary focus of the CAWG has been to receive additional background information from the 2005 and 2006 audit recommendations where the Auditor General and management had differing opinions, and to formulate recommendations for decision by CSEDC and Council on the disputed item. These management responses have been the subject of discussions between the Auditor General, the City Manager and the CAWG. In a majority of the cases, consensus was achieved on revisions to the implementation of the audit recommendations, with only a small number of cases where further discussion and analysis was required.
(Document
1)
Document 1 provides the action status tracking of recommendations from the 2005 audits as of May 2008. Further progress has been made and the majority of audit recommendations have been implemented. The Emergency Management Program and Real Estate Management audits are 100% complete. This is provided to the CSEDC and Council for its information.
(Document
2)
For recommendations 4b) and 10 in the Financial Control Environment audit, the CAWG and the Auditor General agreed to the recommended revisions as outlined in Document 2.
With the resolution of Financial Control Environment recommendations 4b) and 10 as indicated in Document 2, all 2006 recommendations under dispute have been resolved. The Auditor General and the City Manager will commence work on the 2007 recommendations under dispute with the involvement of the CAWG as required.
(Document 3)
Document 3 provides the action status tracking of recommendations from
the 2006 audits as of May 2008. Further
progress has been made and many of the audit recommendations have been
implemented. The Munster Hamlet audit
is 100% complete. This report is
provided to the CSEDC and Council for its information.
Contrary to what was reported in the last quarterly
report to Committee and Council, the P3 audit is thirty-six percent
complete. Fifty four percent of the
audit recommendations are dependent upon a P3 Policy being approved by
Council. This policy was expected to go
to Committee and Council last Fall, but was delayed due to additional due
diligence undertaken by staff as a result of adjustments in the P3 markets and
resource reassignment due to unplanned and unforeseen additional work. The
policy will be tabled at Council in Q4 2008. The final 10% of the
recommendations will be completed pending budget approval in 2009.
CONSULTATION
The CAWG and the Auditor General receive the status tracking documents for their information quarterly at CAWG meetings.
Consultation was held with the applicable department heads as part of drafting this report. Consultation will continue as part of the ongoing discussions related to the implementation surrounding some of the audit recommendations.
Public consultation is not applicable and was not conducted as part of this report.
FINANCIAL IMPLICATIONS
There are no financial implications associated with this action status
report.
Document 1: Status tracking for the 2005 audits as of May 2008.
(Document issued separately and is on file with the City Clerk.)
Document 2: 2006 Audit Recommendations and Management Comments – Requested revisions with respect to implementation of recommendations for the Financial Control Audit. (Attached to the report.)
Document 3: Status tracking for 2006 audits as of May 2008.
(Document issued separately and is on file with the City Clerk.)
DISPOSITION
The applicable department head and staff will continue to work on the implementation of the audit recommendations as noted.
The Council Audit Working Group and the City Manager will continue to work with the Auditor General on the resolution and implementation of recommendations that are subject to further discussion.
Documents 1 and 3
2005 and 2006 Action Status Tracking
Issued separately and on file with the City
Clerk.
Recommendation No. 2a)
1. Approve the changes with respect to implementation for the Financial Control Environment Audit recommendation no. 4 b), as outlined in Document 2;
|
Audit Recommendation |
Action Required Based on Dept. Head Action Plan |
Comments (Risks, issues regarding implementation) |
Related Council Motion |
Status Update / Request for Approval of revised Implementation |
|
Financial
Control Environment Audit Rec.
4b) That
Financial Services Branch
identifies an appropriate number of positions that require an accounting
designation. |
The Financial Services Branch will review
which positions require a professional designation and identify other
appropriate qualifications for the remaining Finance positions. The Branch
will also identify steps taken to encourage staff to upgrade their skills. |
|
No |
Complete. This
recommendation was discussed at Council Audit Working Group on February 25,
2008. Following a
review by the City Manager, the Auditor General and the Financial Services
Branch, the accounting designation
requirements were amended.
Financial Services is actively pursuing approval to pay for all
relevant professional designations for its CIPP staff to encourage additional
professional designations within its workforce and ensure that there is a
qualified pool of candidates for MPE positions. In addition,
Financial Services has initiated a project to review and revise all policies,
procedures, guidelines and task descriptions within the branch to provide
consistent and well-understood direction. |
Recommendation No. 2b)
2. Approve the changes with respect to implementation for the Financial Control Environment Audit recommendation no. 10, as outlined in Document 2;
|
Audit Recommendation |
Action Required Based on Dept. Head Action Plan |
Comments (Risks, issues regarding implementation) |
Related Council Motion |
Status Update / Request for Approval of revised Implementation |
|
Financial
Control Environment Audit Rec.
10 That
Financial Services Branch in conjunction with Information Technology Services
Branch review systems design to implement controls to disallow overriding
prices, processing of duplicates, drawing and taking greater than set sick
leave allowance, etc. and that reviews be conducted on a regular basis to
confirm that any override capabilities deemed necessary are appropriate and
approved. |
• See rec. 9 re: rationale for comprehensive
access controls; • Identify compensating
controls; • Determine whether current practises are reasonable
and provide reasons for or against; • Requires a separate project for each of the six
items to review and document the rationale for each override and why it is
necessary. |
a) SAP override - No such functionality
exists in SAP. CLASS is a stand-alone program that is linked to SAP via an
interface file. Pricing information
does not exist within SAP and thus price overrides are not possible. b) Duplicate invoice payments – For more
detail see Rec. 19 c) Cheque printing – For more detail see
Rec. 23 d) Sick days – For more detail see Rec.
32 e) Annual leave - For more detail see
Rec. 35 f) Pay rates - For more detail see Rec. 32 |
No |
Complete. This
recommendation was discussed at Council Audit Working Group on June 16, 2008. The following
items identified have been dealt with as follows: SAP Override This has now
been eliminated with one exception being that facility-booking rates can be
overridden due to contract pricing, however, this can only be performed by a
supervisor. This item is also being
considered through the Parks & Recreation Audit. Duplicate
Invoice Payment Additional
training of staff has occurred and will be ongoing. Audit control language is being installed as a detective tool
to identify any duplicated payments. Cheque
Printing Management will
not action this recommendation.
Low-cost internal controls exist to detect and prevent the inadvertent
mailing of duplicated cheques. |
|
Audit Recommendation |
Action Required Based on Dept. Head Action Plan |
Comments (Risks, issues regarding implementation) |
Related Council Motion |
Status Update / Request for Approval of revised Implementation |
|
Financial
Control Environment Audit Rec.
10 (cont’d) |
|
|
|
Sick Days The SAP system
can be enhanced to restrict the processing of uncertified sick leave days in
excess of allowable limits. The
implementation of this new process will require system redesign of existing
sick leave functionality and reports.
This initiative has been incorporated into the 2008 work plan and will
be completed by Q4 2008. The cost to
implement this initiative will be approx. $142,750. Annual Leave EMC made the
decision to bring all vacation leave balances within guidelines by December
31, 2009. Pay Rates This item is
being dealt with as part of the Payroll Audit. |
4. COUNCIL AUDIT WORKING GROUP – 2005 AND
2006 AUDIT RECOMMENDATIONS – QUARTERLY ACTION STATUS REPORT
GROUPE DE TRAVAIL DU CONSEIL SUR LA
VÉRIFICATION – RECOMMANDATIONS DÉCOULANT DES VÉRIFICATIONS DE 2005 ET DE 2006 –
RAPPORT D’ÉTAPE TRIMESTRIEL
ACS2008-CMR-OCM-0007 city-wide / À l’Échelle de la ville
As much as she felt it was important
to track this process, Councillor Deans felt it was also important for Council
to receive audit reports in a timely fashion and she suggested moving to
semi-annual reporting. Mr. Alain
Lalonde, Auditor General, indicated he would be bringing forward another audit
report in the fall and that this would likely become the trend. In other words, he was moving to semi-annual
reporting.
Following this brief exchange, Committee voted
on the report recommendations.
That the Corporate
Services and Economic Development Committee recommend Council:
1. Receive, for information,
the ongoing action status tracking report for the 2005 audit recommendations as
of May 2008, as outlined in Document 1;
2. Approve the changes with
respect to implementation for the following 2006 audit recommendations as
outlined in Document 2, specifically:
a) Financial Control
Environment Audit recommendation no. 4 b);
b) Financial Control
Environment Audit recommendation no. 10; and
3. Receive, for information,
the ongoing action status tracking report for the 2006 audit recommendations as
of May 2008, as outlined in Document 3.
CARRIED