The Audit Committee requested the Auditor General to consider reviewing the fees charged by Ernst & Young, Chartered Accountants, as reported out in their November 20, 2009 report, titled “Disclosure of 2008 Other Audit Related Fees”, in order to determine:

The Audit Committee recommends that:

1.         City Council request the Treasurer, in conjunction with Heads of Divisions participating in the PCard program, to develop and implement clear and effective procedures to:

a.         Reduce the number of monthly transactions with outstanding documents or approvals

b.         Follow up on transactions with outstanding documents or approvals in a consistent manner

c.         Recover the City’s GST rebates from PCard purchases

d.         Ensure cancellation of individual PCards according to policy.

2.         City Council request the Treasurer to validate employment status of all current cardholders.  Further, in consultation with Heads of Divisions participating in the PCard program, the Treasurer develop and implement clear and effective procedures to address the timely cancellation of PCards upon employment termination or extended leave.

3.         City Council request the Treasurer, in conjunction with Heads of Divisions participating in the PCard program, to develop and implement effective review, monitoring, and follow-up procedures, at the divisional and Corporate levels, to ensure compliance with PCard policies and procedures.

4.         City Council request Heads of Divisions participating in the PCard program to ensure that a divisional approval list outlining cardholders and their respective approval supervisors is developed and routinely reviewed for appropriateness.

5.         City Council request the Treasurer, in consultation with Heads of Divisions participating in the PCard Program, to ensure adequate controls are incorporated into the PCard approval process to detect inappropriate authorization and minimize the risk of unauthorized alterations to purchase logs.

6.         City Council request the Treasurer, in consultation with Heads of Divisions participating in the PCard Program, to ensure that cardholder reconciliation of purchase logs with PCard system records is consistently implemented.

7.         City Council request the Treasurer, in consultation with Heads of Divisions participating in the PCard program, to develop procedures whereby management staff have regular access to information on the total number and types of PCard purchases made for their office/unit.

8.         City Council request the Treasurer to ensure that PCard documents, including purchase logs and receipts, are stored in a secure manner to prevent unauthorized access.

9.         City Council request the Treasurer to undertake the necessary steps to improve effectiveness of PCard training.  Such steps should include, but not be limited to:

a.         Ensuring the training includes a review of the importance of individual roles and responsibilities in the control framework

b.         Providing refresher training where needed.

10.       City Council request the Treasurer to undertake the necessary steps to improve efficiency of the PCard process, including steps to explore the feasibility of using the PCard system to generate purchase logs for cardholders, and re-assess what information is necessary for cardholders to provide in the purchase logs.

11.       City Council request the City Manager to ensure that the Expense Claim Policy for Staff of the City of Toronto (March 10, 1998) is reviewed, updated, and made accessible to staff.

12.       City Council request the Treasurer to develop and implement measures to improve compliance with Corporate policies and procedures pertaining to business expenses.

13.       City Council request the Treasurer to develop standards or guidelines for providing food and/or beverages at staff meetings and functions.

14.       City Council request the Treasurer to undertake the necessary steps to improve cardholder compliance with Corporate purchasing policies and procedures.  Such steps should include, but not be limited to:

             a.        ensuring cardholders receive adequate training in purchasing policies and procedures

             b.        monitoring PCard purchases to identify non- compliance with purchasing policies.

15.       City Council request the Treasurer to ensure that PCard purchases are regularly monitored and analyzed to identify opportunities for blanket contract.

16.       City Council request the City Manager to review the current sundry expense policy and consider integrating the requirement to reduce the sundry expense claim when meals are provided at conferences or business meetings, or when meals are paid for by the City.

17.       City Council request the Treasurer, in conjunction with Heads of Divisions participating in the PCard program, to develop and implement procedures to reduce the number of inactive or low usage cards, and cancel inactive cards where necessary.

18.       City Council request the Treasurer to develop and implement strategies to promote and expand the use of PCards by City divisions.  Such strategies should include, but not be limited to:

a.         analyzing divisional purchasing patterns to identify potential areas for expansion

b.         developing and implementing measures to increase the use of PCards by divisions

c.         setting performance goals for the City based on the number of participating divisions and yearly PCard purchase volume.

19.       City Council request the Treasurer to ensure adequate contract review and management practices for the PCard program including:

a.         a thorough review of the contractual terms and rebate rates and volume tiers

       b.        retaining a copy of the final contract.

20.       City Council request the Treasurer, in conjunction with Heads of Divisions  participating in the PCard program, to develop a long term strategy for continuous improvement of the PCard program including:

              a.        establishment of a City-wide User Group

              b.       regular reviews and updates of policies and procedures.

21.       City Council request the Auditor General, in consultation with the Director, Internal Audit Division, to conduct random checks of PCard transactions, and report back to the Audit Committee for its July 2010 meeting on his findings and any further action needed.

The Audit Committee recommends that:

1.         City Council require the City Manager to fully address the recommendations relating to hiring contained in the Bellamy Report.  The Executive Director of Human Resources also be required to ensure that the quality control of hiring files include a monitoring process to address the Bellamy recommendations.

2.         City Council request the Executive Director of Human Resources to take steps to implement the action plans related to employment equity contained in the Toronto Public Service People Plan 2008 - 2011.  The action plans to provide specific deliverables as well as a time frame for such deliverables.  Regular progress reports be provided to City Council.  In developing its specific plans, the Executive Director of Human Resources consult with the Toronto Police Services as well as other appropriate employers in order to ensure that its action plans represent best practices.

3.         City Council request the Executive Director of Human Resources to ensure the City’s external recruitment strategy includes outreach to diverse community groups.  Evidence of such activities be documented in the files.

4.         City Council request the City Manager, in consultation with the City unions, to give priority to the development of a workplace survey for union staff.  Such a survey be consistent with the non-union workforce survey.  The results of the survey be reported to City Council and be used as a basis for addressing the City’s employment equity hiring goals.

5.         City Council request the Executive Director of Human Resources, in consultation with the City Solicitor, to evaluate the feasibility, benefits and risks of adopting a City-wide Corporate hiring policy.

6.         City Council request the Executive Director of Human Resources to direct all staff to complete the appropriate screening documentation for all employee applicants.  All such documentation be retained in hiring files.

7.         City Council request the Executive Director of Human Resources to direct all staff involved in the hiring process that documentation relating to conflict of interest declarations be completed and retained.

8.         City Council request the Executive Director of Human Resources to direct all staff involved in the hiring process to ensure that there is an adequate level of documentation in all hiring files to support hiring decisions.  Such documentation is critical in any potential hiring dispute.

9.         City Council request the Executive Director of Human Resources to direct all staff involved in the hiring process to follow and comply with City policies on employment references.

10.       City Council request the Executive Director of Human Resources to direct all staff to ensure that a fully executed copy of the current employment agreement is obtained and retained in the employee’s Corporate human resources file. 

11.       City Council request the Executive Director of Human Resources to develop Corporate standards which requires the written evaluation of newly hired non-union City employees during the six-month probationary period.

12.       City Council request the Executive Director of Human Resources to develop a hiring benchmark to measure the time required to complete the hiring process for non-union employees and monitor the performance of each hiring unit against the established benchmark.  The Division evaluate the current hiring process to determine where “bottlenecks” in the process occur.  Steps be taken to address these areas.

13.       City Council request the Executive Director of Human Resources to review the current extent and timing of quality reviews of hiring files.  Consideration be given to conducting a certain number of such reviews on current open hiring files.

14.       City Council request the Executive Director of Human Resources to ensure all current and new divisional hiring supervisors and managers attend the “Basics of Staffing” training course.

15.       City Council request the Executive Director of Human Resources to review acting assignments to ensure such assignments comply with Corporate policy.  The Executive Director of Human Resources review the documentation requirements for acting assignments of non-union employees to ensure Corporate records include written documentation detailing the terms and conditions of acting assignments. 

16.       City Council request the City Manager to forward this report to the City’s Agencies, Boards and Commissions.  Further, the City Manager request that relevant recommendations contained in this report be implemented.

The objectives of this audit were to determine the effectiveness of internal controls over the hiring of non-union employees and to review compliance with relevant legislative requirements.

This review identified a number of areas where there is opportunity for improvement.  For the most part, existing policies and procedures are adequate and in compliance with legislative requirements.  However, in a number of cases they are not being followed.  In circumstances where policies and procedures are not being followed, the risk exists that the City's recruitment objectives may not be achieved.

The implementation of the recommendations in this report will assist the Division in ensuring that the recruitment for non-union employees is transparent, fair and in compliance with legislation, policies and procedures.

Since the City's agencies, boards and commissions conduct their own hiring process, the recommendations contained in this report likely have relevance to each one of those organizations.  It is suggested that this report be forwarded to the agencies, boards and commissions in order to determine the applicability of the recommendations.

The Audit Committee recommends that:

1.         City Council request the Chief Information Officer, in consultation with the Executive Director, Human Resources, to take steps in accordance with the “People Plan” to identify common computer skills which apply to “jobs across all divisions” to assist in the development of a training program for new and current employees.

2.         City Council request the City Manager to ensure divisional learning plans are prepared as required by the City “People Plan” and submitted to the Information and Technology Division.

3.         City Council request the City Manager to review the evaluation process relating to the effectiveness of Information and Technology training particularly in regards to the impact of enterprise-wide information and technology training for on-the-job performance as well as its impact on the City as a whole.

4.         City Council request the Chief Information Officer to develop performance indicators to measure the efficiency and effectiveness of the Information and Technology Training and Education Unit and training courses provided by the Unit.

5.         City Council request the Executive Director, Human Resources, to ensure enterprise wide courses resulting in corporate wide benefit have priority when the on-line self service system is implemented.

6.         City Council request the Chief Information Officer to implement a charge-back policy for training courses similar to the Human Resources Division policy.  The policy should charge divisions for registered employees that fail to attend courses without prior notification.

7.         City Council request the Chief Information Officer, in consultation with the Executive Director, Human Resources, to investigate the long term use of the SAP Human Resources Information System as the repository for employee training records. 

The objective of this audit was to review training activities provided by the Information and Technology Division to identify opportunities for improving the management, administration and effectiveness of training services provided by the Division.  Specifically the review was to determine if information technology training provided is relevant and delivered in a cost effective manner.

The review identified the need to address a number of areas to strengthen the overall effectiveness and efficiency of information technology training and education provided to City employees.  Areas identified include the following:

• Developing common computer skills
• More effective use of trainer time
• Evaluating the effectiveness of training
• Implementing a charge-back for “No Shows”
• Implementing performance measures
• Preparation of learning plans
• Centralizing employee training records

Although recommendations in this report focus on improving efficiency and effectiveness over information technology training and education at the City, the recommendations may be relevant to the City's agencies, boards, commissions and corporations and should be reviewed, evaluated and implemented as deemed appropriate.

The Audit Committee recommends that:

1.         City Council request the Deputy City Manager and Chief Financial Officer to consider assigning responsibility for hydro and natural gas accounts management to the Energy and Waste Management Office.  At the same time the reallocation of resources should be evaluated.

2.         City Council request the Deputy City Manager and Chief Financial Officer to develop a control framework to ensure the cost effective administration of hydro and natural gas invoice payments.  Such framework should include, but not be limited to the following:

             a.         clear definition of the roles and responsibilities of the Accounts Payable Unit, the Energy and Waste Management Office and City divisional managers.  The roles and responsibilities to include areas such as processing hydro and natural gas invoices, including following up on billing exceptions, dispute resolution and reporting protocols, as required

             b.        the establishment of protocols for effecting and reporting on energy metering changes, including new meter account set ups, de-activations, replacements, relocations and record keeping requirements

             c.        procedures for ensuring ongoing verification of hydro charges relating to street lighting by a staff person familiar with the operations

             d.        requirements for the Energy and Waste Management Office to communicate energy consumption fluctuations for divisional follow-up as required.

3.         City Council request the Deputy City Manager and Chief Financial Officer to review and make appropriate revisions to Accounting Services’ Cost Centre Billing Procedure to include the revised utility payment control framework.

4.         City Council request the Executive Director, Facilities and Real Estate, to take appropriate steps to ensure the Energy and Waste Management Office maintains a complete and accurate database on all hydro and natural gas meters billable to City divisions.  The database be updated as required.

5.         City Council request the City Manager to assign one City unit responsibility for developing and implementing a process for updating and verifying street lighting related hydro costs.

6.         City Council request the Executive Director, Facilities and Real Estate, to take necessary steps to complete, on a sample basis, ongoing recalculations of major hydro and natural gas bills for accuracy and consider using the specific software currently used by the TTC.

7.         City Council request the Executive Director, Facilities and Real Estate, to ensure that identified energy billing anomalies are promptly analyzed and satisfactorily resolved with the provider on a timely basis.  Further, a system be developed to track outstanding refund requests.

8.         City Council request the Executive Director, Facilities and Real Estate, to take appropriate steps to expedite enrolment in the consolidated billing services plan all hydro invoices, and request from Toronto Hydro data in a format that facilitates input to the Energy and Waste Management Office’s energy meter database.

9.         City Council request the Executive Director, Facilities and Real Estate, to take appropriate steps to minimize duplication of energy consumption review efforts performed by City staff on behalf of City agencies such as the TTC and the Toronto Community Housing Corporation.

10.       City Council request the Deputy City Manager and Chief Financial Officer to assign responsibility for the management of cable television services.  The specific responsibilities include:

              a.       the renegotiation of a corporate cable television service discount plan for all users

              b.       the maintenance of an inventory of cable television plans

              c.       rationalization of such cable television plans commensurate with requirements.

11.       City Council request the City Manager to forward this report to the City’s major agencies, boards and commissions in order to ensure that the issues raised in this report are addressed by them where appropriate.

The Executive Committee on October 5, 2009 considered a report (September 21, 2009) from the City Manager, entitled "Status Report – Update on the Implementation of Auditor General’s 2008 Recommendations on Access, Equity and Human Rights".

The Executive Committee referred the update on the implementation of the recommendations made by the Auditor General (Appendix A), to the Audit Committee.

The Audit Committee recommends that: 

1.         City Council receive for information, the 2008 audited financial statements of Scadding Court Community Centre.

The Audit Committee recommends that: 

1.         City Council receive for information, the 2008 audited financial statements of Leaside Memorial Community Gardens Arena.