1 BACKGROUND

During 2006, the Office of the Auditor General conducted an Audit of the City’s Fleet Services, which was presented to City Council in May 2007 as part of the Auditor General’s Annual Report - 2006. This audit identified that a distinct process, then that of the City’s Fleet Services Branch, was in place to manage police vehicles, which prompted our 2007 Audit of Ottawa Police Service Fleet.

The latter audit was presented to the Ottawa Police Services Board at its April 28, 2008 meeting, where a motion was approved requesting the City’s Auditor General to report back to the Finance and Audit Committee and the Board in six months to provide an update on all of the recommendations set out in the 2007 Audit of Ottawa Police Service Fleet.

2 AUDIT OBJECTIVES AND APPROACH

The objective of the follow-up audit was to assess the adequacy and the extent of the actions taken, in the first three months, to implement the six audit recommendations presented to the Ottawa Police Services Board in April 2008.

3 GENERAL OBSERVATIONS

The 2007 Audit of Ottawa Police Service Fleet made six distinct recommendations. For each of these, we provide management’s follow-up action, as at July 31, 2008 and our assessment of progress as at August 29, 2008.

Recommendation 1

That the Ottawa Police Service consider the full integration of its fleet within the Municipal Fleet Services.

Management Response:

Management can support this recommendation provided that it results in significant financial savings for the Police Service and that it does not impact on Police operations. Accordingly a proposal from the City will be requested to outline the COE services that would be provided under a new fleet arrangement. It will be evaluated as part of the 2008 Strategic Deployment Review.

OPS Follow-up Action:

OPS Fleet Model has been in place since 1997, following detailed review by Paragon Consulting. Two part model leverages specific expertise: OPS staff responsible and accountable for vehicle acquisition/replacement, daily deployment, fit up, fuel procurement, vehicle shuttling Vehicle acquisition (2008 Budget $3.42 million) completed by OPS Fleet Manager through provincial purchasing cooperative for police package vehicles (2008 Budget $2.65 million), and through purchase of used vehicles for unmarked and covert fleet. Through SLA, City of Ottawa Fleet staff responsible for vehicle maintenance. OPS Fleet is resident on City M5 system. Maintenance completed through dedicated garage at central headquarters, and mix of City and commercial vendors in suburban and rural setting. Model is unique in City of Ottawa municipal fleet context, but common in Police sector. See November 2006 Report to PSB.

Management response % complete as of July 31, 2008 90%

Auditor General’s Comment on Follow-up:

OPS indicated that full integration was considered during meetings between the City and Ottawa Police Service. It was concluded during these meetings that full integration would not generate significant efficiencies and would not satisfy operational goals better than the current model. Regardless of these discussions, the opinion of the OAG is that a proposal should still be requested from the City for full integration of the Police Fleet within Municipal Fleet Services.

OAG response % complete as of August 29, 2008 20%

Recommendation 2

That the Ottawa Police Service renew the fuel card agreement and assigns each card to a vehicle:

(1) Gather all pertinent information on newer fuel management programs by issuing a Request for Information or meeting with potential suppliers;

(2) Go to tender to renew the outdated card services agreement;

(3) Assign each card to a vehicle. Attach each card to its matching set of vehicle keys if necessary. Continue signing off the cards if users keep losing them but the card has to be dedicated to a specific vehicle;

(4) Track fuel consumption systematically and identify exceptions; and,

(5) Require a credit card receipt for all miscellaneous expenses.

Management Response:

Management agrees with this recommendation, and a new fuel procurement plan is currently in the pilot program stage, with full implementation planned for May 2008. The new plan is twofold, and includes the use of City of Ottawa fuel depots, and Imperial Oil retailers. In both cases the former cards will be replaced with transponders, or “fobs”, that can be affixed to the vehicle key chain enabling tracking of fuel consumption by vehicle, and reducing the occurrence of misplaced or damaged cards. This plan will provide significant fleet management reporting and administrative advantages. As well, the financial discounts achieved by either option are anticipated to be five times greater than with the previous universal fuel card plan. A budget efficiency of $95,000 was approved in the OPS 2008 Operating Budget in anticipation of the new fuel plan.

OPS Follow-up Action:

Control of cards improved in 2007. For the period May 2007 to May 2008, 30 cards were misplaced and cancelled. Maximum number misplaced in one day was 5. In 2006, only the Fleet Manager had on-line access to update card status. In 2007 access was granted to additional staff for purposes of cover for Fleet Manager. Project to replace/upgrade fuel procurement plan in progress since early 2007. Full implementation May 2008. See 2008 Budget, January 2008 in-camera report to PSB, and May 2008 public Report to PSB.

Management response % complete as of July 31, 2008 100%

Auditor General’s Comment on Follow-up:

As at the end of August 2008, OPS had completed the transition from PHH cards to Esso (Imperial Oil) cards. The new process will have OPS fuel at both Esso stations as well as City fuel stations. In both instances a transmitter called “fob” is used. There are approximately 34 Esso stations in and around Ottawa. The Esso fuelling process does not require that the actual credit card ever be provided to the officer. In lieu, an Esso “fob” which has been allocated to a specific vehicle is attached to its set of keys. During the site visit the credit cards were kept in boxes in the manager’s office. Although the office is locked, the cards were not further secured. This represents approximately 600 activated credit cards. In addition, the manager keeps an additional stock of 180 cards for special events (e.g., out-of-town officers required to supplement OPS during President Bush’s visit). When an officer signs-out a vehicle and gets the keys, one or two fobs are attached.

New Recommendation:

That OPS either secure the new Esso credit cards if they are required or alternatively destroy the cards.

Management Response:

Usage of the Esso credit cards, similar to the transponder, requires a unique password to be entered by the user. Regardless, management agrees that the custody of the cards could be improved, and the cards are now locked in a safe accessible only by Financial Services staff.

Esso fuel rate for OPS is the posted pump price at day of fill-up less the contract discount rate per litre. To fuel a vehicle at an Esso station, an officer would swipe a fob; enter his/her password and vehicle odometer reading. OPS perform weekly reports of odometer readings and of multiple fuel-ups; and monthly reports on non-fuel purchases; premium fuel purchases and premium car washes.

OPS have also established a proactive practice where an Esso “point-card” is placed in each vehicle and swiped at each fuel-up. Accumulated points may be redeemed for valuable merchandise such as car washes, oil, windshield fluid, etc. This equates to additional benefits not obtained while using PHH cards.

The process to fuel-up at a City facility is very similar to an Esso station except that the officer swipes their employee identification card as well as fob. Control features programmed in City’s fob include a vehicle’s required fuel, e.g., gas or diesel as well as the fuel tank size. A $0.02 premium per litre is charged when City sites are used. This premium would be waived if OPS integrate their fleet to the City.

From the approximate 600 PHH cards from one year ago, 73 PHH cards remain in existence: 9 regular cards for out-of-town travel; 62 cards dedicated to covert operations; and 2 U.S. cards. Cards are retained and controlled by the OPS Fleet Manager for instances were neither Esso nor City stations may be in the vicinity.

OAG response % complete as of August 29, 2008 100%

Recommendation 3

That the Ottawa Police Service assure continuity of the OPS fleet management function by civilianizing the position.

Management Response:

Management agrees that a review of the merits of civilianizing the fleet manager position should be completed, and is in the process of doing so as a component of the 2008 Strategic Deployment Review.

OPS Follow-up Action:

Current model remains as Sworn Sergeant. Turnover is now 6 Sergeants in 9 years, as previous Sergeant held position for 3.5 years. Strategic Deployment Review has also identified position as one for review for civilianization, as law enforcement powers are not required. Link to OPS Fleet model review is key. Sworn experience for vehicle acquisition, deployment and fit up, vs. specific fleet management expertise. Fleet Manager opportunity provides Sergeant with requisite administrative and budget responsibility for promotional purposes. However, majority of budget is allocated to maintenance charges and capital acquisition that is ultimately accountable to City Fleet through SLA, or the Director of Finance, respectively. Sworn fleet managers are the norm in Ontario Police Services. Recommendation for designation as sworn specialty position requiring a minimum commitment of 5 years has been forwarded to the OPS tenure committee for review. If specialty designation accepted, sworn manager will be provided fleet manager training as provided by the Canadian Association of Fleet Managers (CAFM). Business Case to be prepared.

Management response % complete as of July 31, 2008 50%

Auditor General’s Comment on Follow-up:

As part of OPS’s Tenure Project, the Fleet Manager’s position was examined. The objective of the questionnaire is to assess length of service as opposed to reviewing the sworn versus civilianized status of a position. OPS consider that there is merit in maintaining the position within its sworn complement. At the time of our review, a business case to keep the position as sworn was planned but had not yet been developed.

OAG response % complete as of August 29, 2008 25%

Recommendation 4

That the Ottawa Police Service identify supervisory and/or administrative positions that require a vehicle.

Management Response:

Management agrees with the recommendation that such vehicles be identified, and has followed this practice. The vehicles presented in Table 11 have been assigned for three distinct reasons. Executive Command (Chief, Deputies, and Director General) are assigned exclusive use vehicles by employment contract with the Police Services Board. Sworn Senior Officers (Superintendents and Inspectors) are assigned exclusive use vehicles by OPS policy. These vehicles are equipped with covert lighting and siren to enable operational response capability. The final reason for the allocation of supervisory or administrative vehicles is for an otherwise identified business need. Such requests come forward through Executive Command during the annual budget process, and if approved through both management review and Board review of the budget, the vehicle is added to the fleet complement.

Management response % complete as of July 31, 2008 90%

Auditor General’s Comment on Follow-up:

OPS reviewed vehicles, which were allocated to civilianized positions. These represent 11 vehicles.

OAG response % complete as of August 29, 2008 90%

Recommendation 5

That, for those supervisory and/or administrative positions with assigned vehicles with less than 20,000 km/year, the Ottawa Police Service reimburses the kilometres at a predetermined rate and de-allocates the vehicles.

Management Response:

Management agrees with the intent of the recommendation, and will continue to review the fleet for opportunities to achieve efficiencies through mileage reimbursement as opposed to fleet allocation. With reference to Table 12, it should be noted that nine of the vehicles presented are allocated as a result of Executive Command employment contract or Senior Officer vehicle policy. It is also worth noting that the de-commissioning of a vehicle in lieu of mileage reimbursement is only a viable option if the function to which the vehicle is assigned is truly administrative, and not deployed for policing operations in any way.

OPS Follow-up Action:

Review is in progress. Vehicle inventory sub categorized as:

1) Sworn operational requirement;

2) Executive Command Contract;

3) Senior Officer Policy;

4) Specific functional standard;

a. Mail trucks

b. Property van

c. Etc.

5) Specialty; and,

6) Other civilian.

The other civilian category (less than 15 vehicles) to be reviewed for 2007 usage and costs. Break-even usage metrics to be calculated.

Management response % complete as of July 31, 2008 20%

Auditor General’s Comment on Follow-up:

OPS indicated that they would be conducting a break-even analysis. Analysis is planned to determine both the financial and operational implication of maintaining, or not, commissioned vehicles.

OAG response % complete as of August 29, 2008 20%

Recommendation 6

That the Ottawa Police Service tender commercial repairs.

Management Response:

Management agrees with this recommendation. A new tender and /or a review of options to expand the services provided by City Fleet Services in the West End is overdue. The need is enhanced by the fact that a new West Division facility is scheduled to open in the near future, which will likely increase the size of the fleet deployed from the west end of the city. OPS management will work with City Fleet Services and City Supply Management to complete this tendering process.

OPS Follow-up Action:

City Fleet have updated the previous proposal using 2007 data, and provided to OPS management in July. Evaluation of comprehensive proposal will determine if additional standing offer issue is required. If standing offer is recommended, City Supply will be involved as well. Consideration of impact of new West Division Patrol Station also to be considered. Additional review meetings scheduled for August.

Management response % complete as of July 31, 2008 40%

Auditor General’s Comment on Follow-up:

OPS were provided with a proposal from the City to integrate some of OPS’s west end servicing at the City’s Moodie Drive facility. OPS are currently reviewing the proposal. Although OPS are in the process of building a new facility for its west division, no attempt was made to tender commercial repairs for the possible interim period.

The tendering for commercial repairs in the west is still required.

OAG response % complete as of August 29, 2008 40%

4 CONCLUSION

Of the six recommendations presented to Ottawa Police Services Board in April 2008, one was fully implemented at the time of our review in August 2008. Although action has been taken and progress made, the remaining five recommendations are incomplete at this time.

5 OTTAWA POLICE SERVICE MANAGEMENT RESPONSE

Ottawa Police Service management concurs that action has been taken and progress made on all recommendations. Additional comments on each recommendation are provided below.

Recommendation 1: OPS Management disagrees with the OAG assertion that a formal proposal from City Fleet Management is still required. Both OPS Management and City Fleet Services Management believe that sufficient due diligence has been applied regarding the full integration of the OPS fleet with the City fleet. The issue has been thoroughly vetted in a series of meetings, and there is concurrence that there will not be significant savings to the OPS, nor a significant benefit to the operations of the fleet. Following these discussions, a formal proposal from the City on this topic is not warranted, nor an effective use of time and resources.

Recommendation 2: OPS Management concurs that response to this recommendation is 100% complete. A clarification is necessary regarding the $0.02 premium levied when OPS vehicles use City fuel sites. Prices achieved at the City sites vary from week to week, but range from $0.06 to $0.09 cheaper than retail rates per litre due to the City's bulk purchasing power. As a user of the City sites, the OPS are charged a $0.02 per litre premium on those weekly rates. The "premium" is effectively a fee for fuel system management reporting, billing etc. that the City charges to clients that use the sites. Even with that fee, the price per litre is competitive, if not better, than the Esso rates achieved. Should the OPS fully integrate with City Fleet, a management fee per vehicle would be applied to cover the City's apportioned costs of procurement, disposal, and reporting. The OPS is not currently charged any management fee by the City, as our model does not merit that charge. That management fee for the entire fleet would be significantly greater than the premium per litre based on OPS usage of the City sites.

Recommendation 3: OPS Management concurs with the OAG comments regarding completion as at August 29. The Business Case to retain the sworn position is in development and is subject to management approval.

Recommendation 4: OPS Management concurs with the OAG comments regarding completion as at August 29.

Recommendation 5: OPS Management concurs with the OAG comments regarding completion as at August 29. The operational impact of the break-even usage analysis is in progress.

Recommendation 6: OPS Management concurs with the OAG comments regarding completion as at August 29. Further meetings with City Fleet Management and City Supply Management have been completed, and the preparation of specifications for the tender for commercial repairs in the West End is in progress.

6 CITY OF OTTAWA FLEET SERVICES BRANCH COMMENTS

Recommendation #1 Fleet Integration - Concur: we have met with OPS and concluded that given the nature of the OPS fleet (approx 80% are police package vehicles on a set duty-cycle and life-cycle) and the method of procurement (purchased through the provincial purchasing coop) at this point we do not believe we would generate significant savings through fleet integration.

Recommendation #2 Fuel Procurement - Concur: Fleet clients that do not pay a management fee (eg OPS) are charged a $0.02/L surcharge for fuel to cover fuel system operating costs. Clients that pay a management fee receive full fleet management services in addition to fuelling services.

Recommendation #3, 4 and 5 - N/A

Recommendation #6 Commercial Contract West End Services - We have provided a vehicle maintenance proposal to OPS for West End operations in June 2008 that reflects savings over current practice.

7 ACKNOWLEDGEMENT

We wish to express our appreciation for the cooperation and assistance afforded the audit team by management.