Mandate - Audit Services Division

 The Strategic Policies and Priorities Committee recommends the adoption of the recommendation in the following transmittal letter (July 8, 1998) from the Audit Committee:

 Recommendation:

 That the mandate of the Audit Services Division, as outlined in the report (June 15, 1998) from the City Auditor, be approved.

 Background:

 On July 7, 1998, the Audit Committee had before it a report (June 15, 1998) from the City Auditor outlining the mandate of the Audit Services Division.

 The Audit Committee approved the mandate of the Audit Services Division, as set out in the aforementioned report, and directed that the mandate be forwarded to the Strategic Policies and Priorities Committee and Council for approval.

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 (Report dated June 15, 1998, addressed to the

Audit Committee from the

City Auditor)

 Recommendation:

 It is recommended that the mandate of the Audit Services Division as outlined in this report be approved.

 Background:

 At its meeting of May 13 and 14, 1998, Council approved the recommendation of the Toronto Transition Team that:

 (1)the annual attest audit should be done by an external auditor hired by an Audit Committee of Council; and

 (2)the City should have an internal audit function to provide ongoing audit services to the Corporation.

 A proposed mandate of the Audit Services Division was outlined in the department's budget submission. The purpose of this report is to articulate a mandate and request its approval by the Audit Committee.

 Comments:

 Internal auditing is generally an independent review and appraisal of an organization's business activities and controls. The City Auditor shall have authority to conduct financial, operational and other special reviews of all departments, agencies, offices, boards and commissions. Such authority empowers the City Auditor:

(a)to conduct or cause to be conducted operational audits, defined as evaluating the management of public funds and resources from a standpoint of economy, efficiency and effectiveness, and making recommendations on operating improvements;

 (b)to examine and evaluate the adequacy of the City's systems of internal control, both financial and operational;

 (c)to evaluate the procedures used by management to measure and report on program effectiveness. A review of the results of such programs or activities will include an evaluation relating to the results or benefits achieved, and whether the programs or activities are meeting established objectives;

 (d)to examine problem areas brought to the attention of the City Auditor by Council and senior management. To act as an ongoing resource to senior management;

 (e)to carry out special assignments ranging from consulting work to investigating suspected fraud or wrongdoing;

 (f)to determine whether or not applicable sections of by-laws, regulations and management directives, etc., have been complied with, as well as applicable federal and provincial legislation;

 (g)to co-ordinate the financial internal audit activities with the external auditors of the City to ensure the efficient and economical use of audit resources; and

 (h)To conduct attest financial audits as appropriate.

Access to Records and Property:

 The City Auditor shall have access to, and authority to examine any and all documents including but not limited to books, accounts, internal memoranda, writing and tapes, reports, vouchers, correspondence files and other records, bank accounts, money and other property of any City Department, Agency, Office, Board or Commission.

 It is the duty of any officer, employee or agent of the City having control of such records to permit access to, and examination thereof, upon the request of the City Auditor or his or her authorized representative. It is also the duty of any such officer, employee or agent to fully cooperate with, and to make full disclosure of all pertinent information to the City auditor or his or her authorized representative.

 Conclusion:

 Approval of the mandate of the Audit Services Division clarifies the role, responsibilities and authority of the City Auditor allowing for the operation of an effective auditing function at the City of Toronto.

 Contact Name and Telephone No.:

 Jeff Griffiths, 392-8461.