1997 Management Letters of the former Municipalities

- Metropolitan Toronto, City of Toronto, City of Scarborough,

City of Etobicoke, City of York and Borough of East York

The Strategic Policies and Priorities Committee submits the transmittal letter (July 21, 1998) from the Audit Committee, without recommendation.

The Strategic Policies and Priorities Committee reports having requested the Chief Financial Officer and Treasurer to meet with the City Auditor and report directly to Council on July 29, 1998, on the City's risk management as it pertains to insurance coverage, as well as the adequacy of the insurance reserve fund and on the significance of unfunded liabilities to the City.

The Strategic Policies and Priorities Committee submits the following transmittal letter (July21,1998) from the Audit Committee:

Recommendations:

The Audit Committee recommended to the Strategic Policies and Priorities Committee and Council that:

(1)Council require that all future financial statements prepared by management be consistent and complete in full disclosure of operating and capital costs;

(2)the Provincial Government be requested to pursue entering into reciprocal agreements with each province and that management pursue similar action in terms of the United States of America, for the collection of parking ticket fines. If this is not possible, then Management be requested to pursue the option of obtaining the services of a collection agency to collect outstanding parking ticket fines, with the costs of collection to be added to each fine;

(3)Council request the Manager of Provincial and Parking Offences to report to the Corporate Services Committee on a $500.00 as well as a $5,000.00 threshold for reporting on persons who owe outstanding parking fines;

(4)the Chief Financial Officer report to the Corporate Services Committee on the former guidelines for parking tag withdrawals, together with an update on any recent changes to these guidelines;

(5)Council request the Police Services Board to make available to City Council the report on the Jane Doe case which is expected to be submitted to the Police Services Board, in camera, for consideration by the City in connection with its risk management responsibilities; and

(6)the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York be received for information and forwarded to Council.

The Audit Committee reports having:

(a)requested the City Auditor to report to a future meeting of the Audit Committee on the City's risk management as it pertains to insurance coverage, as well as the adequacy of the insurance reserve fund;

(b)requested the City Auditor to provide a report to the Audit Committee in the fall of 1998 on the significance of unfunded liabilities to the City;

(c)highlighted for the Chief Administrative Officer the importance of implementing and reporting on program performance measurements;

(d)noted the lack of a formal agreement with Sun Life to ensure all benefit payments made are proper and that an agreement be entered into as soon as possible; and

(e)deferred consideration of the response (June 24, 1998) from KPMG until its next meeting.

Background:

On July 21, 1998, the Audit Committee had before it a report (June 22, 1998) from the City Auditor recommending that the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, be received and forwarded to Council for information.

The Audit Committee also had before it the following:

(i)(July 6, 1998) from the Commissioner of Corporate Services responding to the Finance Department management letter as it specifically relates to the former City of Toronto's financial system, the issue referred to was about installing BANNER 2000;

(ii)(June 30, 1998) from the Treasurer of the former City of Toronto addressed to the Commissioner of Corporate Services responding to the management letter (June 25, 1998) of the Auditor of the former City of Toronto;

(iii)(July 16, 1998) from the Chief Financial Officer & Treasurer responding to the management letter of the Auditor on the 1997 operations of Metropolitan Toronto;

(iv)(June 24, 1998) from KPMG responding to the management letter of the City Auditor in connection with the 1997 operations of the former City of York.

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(Report dated June 22, 1998, addressed to the Audit Committee, from the City Auditor)

Recommendation:

It is recommended that the 1997 management letters of the former municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, be received for information and forwarded to Council.

Comments:

The former Councils of the amalgamating municipalities of Metropolitan Toronto each appointed statutory auditors to audit the 1997 financial statements of their respective municipalities. As a normal bi-product of the audit process, management letters are usually produced identifying areas of control and/or administrative weaknesses, along with recommendations for improvement. The following management letters have been prepared by the auditors of each municipality:

MunicipalityAuditor

Municipality of Metropolitan TorontoJeffrey Griffiths, CA

City of TorontoJohn Woods, CA

City of ScarboroughKPMG

City of Etobicoke and Borough of East YorkDeloitte & Touche

City of YorkKPMG

A management letter for the City of North York was not issued by Coopers and Lybrand although a letter was received from them indicating that there were no issues that required reporting.

Conclusion:

Each of these management letters has been reviewed by the City Auditor of the new City of Toronto. As part of the work plan of the Audit Division, ongoing reviews will be conducted in order to ensure that the issues identified in these letters have been addressed satisfactorily.

Contact Name and Telephone No.:

Jeff Griffiths, 392-8461

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(Report dated July 16, 1998, addressed to the Audit Committee, from the Chief Financial Officer and Treasurer headed, "Response to City Auditor's Management Letter)

Purpose:

This report is to inform Committee on the status of the recommendations in the Management Letter of the City Auditor on the 1997 operations of Metropolitan Toronto and certain issues for the amalgamated City.

Funding Sources:

There are no financial implications.

Recommendations:

It is recommended that this report be received for information.

Background:

This report responds to the recommendations contained in the City Auditor's Management Letter on the 1997 operations of Metropolitan Toronto and certain issues for the amalgamated City.

Discussion:

The attachment to this report reiterates 48 recommendations in the Auditor's Management Letter and sets out the actions already undertaken by the City or proposed to be implemented.

Conclusions:

In the majority of the cases the City has undertaken corrective action. Where corrective action is outstanding, the Division intends to follow up. We have discussed the contents of the attachment with staff of the City Auditor and understand that they concur with the comments made on behalf of management.

Contact Name and Telephone Number:

A. C. Shultz

Director of Accounting Services

Finance Department

416 397 5240

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(Report dated July 6, 1998, addressed to the Audit Committee, from the Commissioner of Corporate Services headed, "Finance Department - Management Letter")

Purpose:

In reply to the Finance Department Management letter as it specifically relates to the former City of Toronto's financial system, the issue referred to was about installing BANNER 2000.

Funding Sources, Financial Implications and Impact Statement:

N/A

Recommendations:

N/A

Council Reference/Background/History:

N/A

Comments and/or Discussion and/or Justification:

After review, it has been determined that this software upgrade and implementation is now not required. The only maintenance work continuing is the work previously contracted by the City which terminates in 1999.

Conclusions:

Therefore, with the cancellation of the BANNER 2000 installations, no additional work or expenditures, except those already contracted, will be incurred.

Contact Name:

Jim Andrew

Executive Director

Information & Technology

2-8421

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The following have previously been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on July24,1998, and a copy thereof is also on file in the office of the City Clerk:

-a copy of the 1997 Management Letters from the former Municipalities of Metropolitan Toronto, City of Toronto, City of Scarborough, City of Etobicoke, City of York and Borough of East York, attached to the City Auditor's letter titled, "Management Letter - Toronto Finance Department, April 30, 1998;

-a copy of the letter titled, "1998 Issues re the Management Letter" and "Chief Financial Officer & Treasurer's Response to 1997 Audit Management Letter" (Appendix A)