March 25, 1998
To:Strategic Policies and Priorities Committee
From:City Clerk
Subject:Audit Services
Recommendation:
The Audit Committee on March 24, 1998, recommended to the Strategic Policies and Priorities Committee, and
Council, that:
(1)the following recommendations of the Toronto Transition Team in connection with the delivery of audit
services be approved:
(a)that the City should have an internal Audit function to provide ongoing audit services to the Corporation; and
(b)that the annual attest audit should be done by an external auditor hired by an Audit Committee of Council;
(2)the City Auditor and the Chief Financial Officer and Treasurer be given authority to proceed with a Request
for Proposal in relation to the annual attest audit for the fiscal years 1998 to 2002 inclusive;
(3)the Chief Financial Officer and Treasurer establish a staff committee, including the City Auditor, to review the
proposals and make recommendations to the Audit Committee concerning the selection of external auditors; and
(4)the Chief Administrative Officer and the City Auditor work with the Chief of Police and the General Manager
of the Toronto Transit Commission to examine what opportunities there may be to consolidate audit functions.
The Audit Committee reports, for the information of the Strategic Policies and Priorities Committee, and Council, having
referred the restructuring of the Audit Department, as proposed in the joint report (February 6, 1998) from the Chief
Administrative Officer, City Auditor and Chief Financial Officer and Treasurer, back to the City Auditor and requested
that:
(a)dialogue be commenced with representatives of CUPE Local 79 as soon as possible;
(b)every effort be made to introduce a redeployment program for staff to be streamlined; and
(c)when he reports back to the Audit Committee, a proposed organization chart for the new Audit Department be
included.
Background:
On March 24, 1998, the Audit Committee had before it a joint report (February 6, 1998) from the Chief Administrative
Officer, City Auditor and Chief Financial Officer and Treasurer, on the provision of audit services to the new City of
Toronto.
The Audit Committee also had before it communications from the following:
(a)Mr. Denis Casey, Acting President, CUPE Local 79; and
(b)Mr. John Woods, Auditor of the former City of Toronto.
The following persons appeared before the Audit Committee on March 24, 1998, in connection with this matter:
-Mr. Denis Casey, Acting President, CUPE Local 79
-Ms. Ann Dembinski, Second Vice-President, CUPE Local 79
Interim Contact
Audit Committee
Christine Dodds/
Attachments
February 6, 1998
To:Audit Committee
From:Chief Administrative Officer, City Auditor and
Chief Financial Officer & Treasurer
Subject:Audit Services
Recommendations:
(1)That the recommendation of the Toronto Transition Team in connection with the delivery of audit services be
approved;
(2)That the City Auditor and the Chief Financial Officer & Treasurer be given authority to proceed with a Request for
Proposal in relation to the annual attest audit for the fiscal years 1998 to 2002 inclusive;
(3)That the Chief Financial Officer & Treasurer establish a staff committee including the City Auditor, to review the
proposals and make recommendations to the Audit Committee concerning the selection of external auditors; and
(4)That the City Auditor be given authority to proceed with the restructuring of the Audit department as proposed in this
report.
Background:
The December 1997 report of the Toronto Transition Team recommended 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.
Annual attest audits required under the Municipal Act were conducted by internal staff at the former municipalities of
Metropolitan Toronto and the City of Toronto. Attest audits at the former Cities of North York, Scarborough, York and
Etobicoke, as well as the Borough of East York were conducted by an external auditor. Internal audit work was conducted
by staff at the former Metropolitan Toronto and the former Cities of Toronto and Scarborough. In general terms, other audit
related work at the former Cities and the Borough of East York were contracted out to the private sector on an as needed
basis and were not a part of an ongoing audit plan or cycle.
The recommendation of the Transition Team represents an audit arrangement which exists in all municipalities in Canada
(except Montreal), the former Metropolitan Toronto and the former City of Toronto, a majority of municipalities in the
U.S., as well as in major corporations in the private sector.
In order to evaluate the appropriateness of the Transition Team=s recommendation, it is important to understand the
difference between the two audit processes.
ANNUAL ATTEST AUDITS
Attest audits are designed to permit the expression of a professional opinion on a set of financial statements. The opinion
states whether the operations and financial position of the municipality have been presented fairly in compliance with
accounting policies generally accepted for municipalities. Under present municipal legislation, statutory attest audit
requirements comprise a high level annual audit of the financial statements of the municipality and its agencies, boards and
commissions. These audits are designed to give assurance that the financial statements being audited are not materially
misstated and that they do not contain inaccuracies or misrepresentations of a magnitude which could significantly mislead
a reader of those statements. The auditor determines what is material and this determination impacts significantly on the
extent of audit work which is conducted.
Annual attest audit requirements for the City of Toronto will involve the expression of an audit opinion on the following
sets of financial statements:
Consolidated Financial Statements of the City of Toronto
City of Toronto Hydro Commission
Toronto Transit Commission
Metropolitan Toronto Coach Terminal, Inc.
TTC Insurance Company Limited
TTC Pension Fund Society
TTC Sick Benefit Association
City of Toronto Sinking Funds
City of Toronto Waterworks System
City of Toronto Library Board
Toronto District Heating Corporation
City of Toronto Parking Authority
Metropolitan Toronto Pension Fund
Metropolitan Toronto Police Benefit Fund
Metro Police Supplemental Pension Benefits Trust Funds
City of York Employees Pension and Benefit Funds
City of Toronto Pension Plan
Toronto Fire Department Superannuation and Benefit Funds
Board of Governors of Exhibition Place
Canadian National Exhibition Association
Canadian National Exhibition Association Foundation
Hummingbird Centre for the Performing Arts
City of Toronto Zoo
City of Toronto Board of Health
Metropolitan Toronto Housing Company Limited
Cityhome
City of Toronto Trust Funds
North York Performing Arts Centre Corporation
City of Toronto Historical Board
Toronto Economic Development Corporation
St. Lawrence Centre for the Arts
The Metropolitan Toronto Convention and Visitors Association
Canada=s Sports Hall of Fame
In addition to the above, the Attest Auditor is also required to provide opinions on a significant number of provincial
subsidy claims which include the following Homes for the Aged:
Albion Lodge
Bendale Acres
Carefree Lodge
Castleview Wychwood Towers
Cummer Lodge
Fudger Home
Kipling Acres
Lakeshore Lodge
Seven Oaks
True Davidson Acres
Under present legislation, the Attest Auditor is also required to provide audit opinions on approximately 35 Business
Improvement Area financial statements. In addition, the Auditor of the former City of Toronto has also provided opinions
on approximately 15 Community Centres and Arenas. Audit opinions will also be required on various miscellaneous
subsidy claims relating to the Ambulance Division, as well as the Housing Companies.
The extent of the above audit work is significant. In order to minimize attest audit costs, discussions with the Province are
underway in connection with the audit requirements of the Business Improvement Areas, in order to ascertain whether or
not detailed audits are required. In addition, the audit requirements relating to the Community Centres and Arenas are
currently being reviewed. It is suggested therefore, that audit requirements relating to the Business Improvement Areas and
the Community Centres and Arenas be excluded from the request for proposal process.
INTERNAL AUDITS
Due to the fact that statutory attest audits are carried out at a high level, they provide limited value to the municipality in a
proactive management capacity other than assurance of the absence of material error in the reported financial results and
financial position. While a management letter may be a product of such an audit, it will not reflect observations based on a
systematic and reasonably detailed review of all or even all major program activities of the municipality. Where municipal
programs do not have the capacity to generate material dollar value errors, they will likely receive little attention during the
mandated audit. Unless specifically requested, the attest audit will not generally address areas which are not considered
material, even though they may be politically sensitive. As a consequence, the attest audit provides little support to the
governance process. It will not contain any significant evaluation of individual program areas or reported program results
unless contracted for specifically apart from the regular audit fee.
All major municipalities in Canada and the U.S. have counterbalanced this deficiency by the extension of audit processes
to a more detailed level. This extension is conducted by internal audit staff. The size and complexity of the City of Toronto
will make it more difficult for Council to exercise good governance over activities than was the case in any one of the
amalgamating municipalities. Consequently, the need for an independent evaluation of program activities reported results
and internal control processes will assume even greater importance in ensuring appropriate accountability of management
of the City to Council. Thus, there is a need for additional audit processes covering all major program areas within the City
if Council, the Chief Administrative Officer and Senior Management is to be in an informed position to make critical
decisions related to these programs and the manner in which they are carried out. Certain areas are specifically targeted for
audit in a more in-depth manner than would normally occur during an attest audit. They can be targeted for a number of
reasons, such as representing or reflecting:
(a)Major cost centres with potential savings;
(b)Major problem areas to the Corporation;
(c)Specific problems in process, organization or function;
(d)Part of a specific audit cycle approved by Council based upon a structured risk analysis process; and
(e)Areas where fraudulent activities is suspected.
When properly conducted, such reviews can cause or influence departments, commissions and local boards to function
more effectively, efficiently and economically. Such actions can result in tangible as well as intangible benefits. Tangible
benefits are measurable in financial terms, e.g., staff savings, increased revenue and costs avoided because of audit
findings. Intangible benefits cannot be fully or readily measured in financial terms, e.g., improved services to the public,
strengthened internal control systems to prevent and detect irregularities, avoidance of fraud and streamlined procedures.
TRANSITIONAL AUDIT REQUIREMENTS
During the first six months or so, the internal audit function will include a process related to transitional issues. The
transitional requirements relate to the termination of operations of the six area municipalities and Metro and the
consolidation of those activities into the new City of Toronto. Each of the seven individual municipalities presently has
appointed a statutory attest auditor for the 1997 fiscal year. Each auditor is required to report on the financial results of the
municipality they have been appointed to audit.
The City Auditor is currently completing the audit of the 1997 financial statements of the former Municipality of
Metropolitan Toronto including its local boards, agencies and commissions, as well as coordinating the audit process for
the other six amalgamated municipalities.
Comments:
The outsourcing of the attest audit is standard practice at the municipal level and the private sector in both Canada and the
US. The reasons for this particular method of delivery of audit services are as follows:
(1)Auditor Independence
The very purpose and nature of an attest audit is to obtain the independent opinion of the auditor. Independence can be
defined as the state of not being influenced or controlled by others in matters of opinion or conduct; thinking or acting for
oneself; not subject to another=s authority or jurisdiction; and autonomous.
The auditors= opinion on the financial statements increases users= confidence in those financial statements. It is the
independent nature of this review and report on management=s representations on their financial statements that gives rise
to the increased confidence.
The Institute of Chartered Accountants of Ontario ARules of Professional Conduct@ state that the auditor Ashall hold
himself free of influence, interest, or relationship which impairs his professional judgment or objectivity@ or appears to do
so to the reasonable observer. This statement reflects the two facets of independence: independence in fact, and
independence in appearance. Independence in fact and appearance may best be achieved through engaging an external
auditor.
(2)Efficient Use of Resources
Attest audit opinions on all municipal financial statements are required by April 30 of the following year. This deadline is
imposed by the Province of Ontario and the preparation of financial statements by that date at the latest is important. For
instance, the Public Sector Accounting and Auditing Board (PSAAB) of the Canadian Institute of Chartered Accountants,
in its pronouncement relating to general standards of financial statement presentation requires that financial statements
must be issued on a timely basis. PSAAB further states that the usefulness of financial information diminishes as time
elapses. In view of the number of financial statements requiring audit opinions by April 30, it is not possible to staff the
department to a level which accomplishes this objective and at the same time, keep the same level of staff productive for
the balance of the year.
(3)Outsourcing of the Attest Audit allows the Internal Audit function to focus on value added issues
The outsourcing of the attest audit allows the City Auditor to focus on the pursuit of more value added issues, particularly
in the area of value for money projects. The pay back in this area is significantly greater than attest audit work the major
focus of which relates to a high level audit of a set of financial statements. The amount of time available for this work
would be reduced depending on the level of assistance provided to the external auditors and any attest type work the
City Auditor may be asked to perform on entities such as Community Centres and Business Improvement Areas.
(4)Improved Access to specialized skills and audit technology
The skills available to a major private sector public accounting firm will likely be of benefit to the City Auditor,
particularly in relation to specialized technical knowledge. For example, if the City Auditor requires technical advice on
Internet Fire walls on a particular project, this expertise would likely be available from resources within the firm of the
attest auditor as opposed to having an expert on staff in a permanent basis.
Staffing Implications
The 1998 budget of the Audit Department has been based on the recommendations of the Transition Team. However, it is
important to note that the 1998 budget year will include work relating to the 1997 attest audit. Due to the outsourcing of the
attest audit function, staffing levels will likely be reduced from 50 to 20 by June 30, 1998. Current staffing levels are as
follows:
|
Former*
Metro
Toronto |
Former
City of
Toronto |
Former
City of
Scarborough |
TOTAL |
EXCLUDED |
|
|
|
|
City Auditor |
1 |
1 |
1 |
3 |
Directors |
|
1 |
|
1 |
Acting Directors |
2 |
|
|
2 |
Managers |
4 |
3 |
|
7 |
Acting Managers |
1 |
|
1 |
2 |
Project Co-ordinators |
10 |
3 |
3 |
16 |
Administrative Asst. |
|
1 |
|
1 |
Executive Secretary |
1 |
|
|
1 |
|
19 |
9 |
5 |
33 |
UNION |
|
|
|
|
Auditor 2 |
1 |
|
|
1 |
Audit Clerk 3 |
4 |
|
|
4 |
Audit Clerk 5 |
4 |
|
|
4 |
Senior Auditor |
- |
4 |
|
4 |
Auditor |
- |
2 |
|
2 |
Clerk 2 |
1 |
1 |
|
2 |
|
10 |
7 |
|
17 |
|
|
|
|
|
GRAND TOTAL |
29 |
16 |
5 |
50 |
*Includes the transfer of staff from the Internal Control Division of the Finance Department of the former Metro.
Proposed staffing levels under the new structure will be as follows:
City Auditor1
EDP Manager1
Managers3
Project Coordinators5
Auditors9
Executive Secretary 1
20
Of the staff reductions required, it is anticipated that only two individuals will qualify for early retirement. In addition, the
department has one temporary employee on staff.
In view of the change in the type of work required, the structure of the Audit Department in the new City of Toronto will
likely comprise of staff with professional designations, the majority of whom are currently excluded personnel. There are a
number of union staff who possess accounting designations, and as such, will qualify for positions under the new structure.
In view of the department=s required access to confidential records throughout the Corporation including personnel
records, as well as the issue of independence, it is anticipated that staff of the restructured department will all be excluded.
This is the general practice in audit departments throughout Canada and the US.
The proposed staff level of 20 is based on an estimate of the potential work load of the department. Benchmark
comparisons have been made with other municipalities across Canada and the US, in order to determine the
appropriateness of such staff levels. Specific comparisons are as follows:
|
Municipal
Operating
Budget |
Internal
Audit
Costs |
Internal Audit Costs
as a % of Municipal
Operating Budget |
|
000's |
|
|
CANADA |
|
|
|
City of Toronto |
$6,000,000 |
$1,747,000 |
0.03 |
Ottawa/Carleton |
1,100,000 |
587,000 |
0.05 |
Calgary |
820,000 |
1,113,000 |
0.14 |
Edmonton |
706,000 |
962,000 |
0.14 |
Winnipeg |
683,000 |
627,000 |
0.09 |
Ottawa |
316,000 |
600,000 |
0.19 |
|
|
|
|
U.S. |
|
|
|
New York |
33,400,000 |
11,520,000 |
0.03 |
Los Angeles County |
14,300,000 |
7,700,000 |
0.05 |
Houston |
4,500,000 |
740,000 |
0.02 |
San Francisco |
3,200,000 |
1,200,000 |
0.04 |
Detroit |
2,400,000 |
2,400,000 |
0.10 |
Seattle |
1,830,000 |
700,000 |
0.04 |
|
|
|
|
It is difficult to accurately project staff requirements particularly when viewed in relation to potential audit projects
brought about by the unprecedented amalgamation of seven municipalities. This level will be constantly evaluated over the
next 12 to 18 months, particularly in the context of project requirements. It should be noted that internal audit costs as a
percentage of the Municipal Operating Budget will be amongst the lowest in North America at 0.03 per cent.
Budgetary Impact of Restructuring
As indicated earlier, the 1998 budget of the Audit Department has been prepared on the basis of the recommendations of
the Transition Team. The 1998 budget, however, includes costs relating to the completion of the 1997 audits of the
amalgamating municipalities so is not representative of a normal year=s operating expenditures. In this context, the
budgetary impact has been based on a projected 1999 budget. A comparison of costs between 1997 and 1999 is as follows:
1997 Total estimated audit costs of amalgamating municipalities including
local boards, agencies and commissions$4,750,000
1999 Estimated attest audit costs of the new City$1,000,000
Estimated attest audit costs for local boards, agencies and commissions750,000
Internal audit costs 1,747,000
Estimated Total Audit Costs of the new City$3,497,000
Reduction in audit costs (26%)$1,253,000
It is difficult to accurately estimate attest audit costs which are generally affected by:
(1)The complexity and size of the operations;
(2)The number of individual audit opinions that must be issued;
(3)The materiality level used in designing the audit work;
(4)The adequacy of management and procedural controls; and
(5)The assistance provided by an internal audit function.
(1)The Complexity and Size of the Operations
From a mandated audit standpoint, complexity relates to how many revenue, expenditure and other accounting systems and
sub-systems exist within the organization. In the case of the New City, the expenditure and revenue process will have a
number of major aspects which will require individual attention. These will include for example, the Police Services Board,
the administration of General Welfare Assistance, the issue and control of parking tags, the collection and control of
parking tag revenues, tax revenue including the collection thereof, and other fees and services charges. The magnitude of
certain of the revenue items is significant. The total taxation revenue, for example, will be almost $2.7 billion. In the case
of fees, service charges, investment income and miscellaneous income, the total revenue is almost $1.3 billion.
(2)The Number of Individual Audit Opinions that must be Issued
The extent of audit work must be designed specifically to ensure that the financial statements are not materially misstated.
Consequently, when an individual audit opinion is required on any component of the organization, additional audit work
over and above work on the organization as a whole has to be done, as well as specific work related to the actual production
of the audit opinion. Because of the City=s size and range of programs, far more individual opinions will be required than
for other governments.
The extent of the required audit opinions at the New City of Toronto is an issue that requires resolution. This area is
currently being reviewed.
(3)The Materiality Level Used in Designing the Audit Work
One of the most significant and least understood issues relating to the audit process is the materiality level used in an audit.
A definition of materiality in an audit context is as follows:
AThe magnitude of an omission or misstatement or the aggregate thereof that, in the light of surrounding circumstances,
makes it probable that the judgement of a reasonable person relying on the financial statements would have been changed
or influenced by such omission or misstatement or the aggregate thereof.@
In performing audit work, auditors have to ensure that they have done sufficient work to ensure that financial statements
are not materially misstated. A determination of what is material in a financial statement audit context is not an entirely
straightforward process and is dependent on a number of issues such as audit risk and the size and complexity of the
organization.
The lower the materiality level used, the more audit work has to be performed. This does not mean simply extending the
test processes but also involves reviewing more areas of the operation.
(4)The Adequacy of Management and Procedural Controls
The extent of audit work is also governed by the adequacy of management and procedural controls. An initial evaluation of
such controls is important prior to a determination of the extent of audit testing. Additional audit work will be required if
internal controls are weak. This will be a critical issue during the early stages of the New City particularly as new controls
are introduced to the administrative processes. The City Auditor is currently conducting ongoing control reviews at various
locations throughout the City.
(5)The Assistance provided by an Internal Audit Function
Cooperation and coordination between the external and the internal auditor are essential in order to avoid duplication and
reduce the overall costs of both types of audits. Specific assistance can be provided by the internal auditor during the attest
audit. The extent of the assistance provided would be mutually agreed between both parties in consultation with the audit
committee. The cooperation between the two groups can be mutually beneficial provided the internal auditing function is
not viewed as an extension of the attest audit and the internal auditor is not viewed as a permanent resource of the external
auditor.
Proposed Timetable
It is anticipated that all 1997 attest audits will be completed by June 30, 1998, and that the restructuring of the audit
function will be in place by that time. The 1998 budget of the department has been compiled on this basis.
A specific timetable relating to the proposal process is as follows:
Council Approval of ReportApril 15
Issue of Request for ProposalApril 20
Response to Request for ProposalMay 1
Selection of Attest AuditorsMay 15
Council Approval of Attest AuditorsJune 3
Outsourcing of the Internal Audit Function
While the outsourcing of the financial attest audit is by far the most common method of service delivery for the majority of
municipalities in Canada and the US, the outsourcing of the internal audit function to the best of our knowledge, has not
occurred in any municipality in Canada. In addition, we are not aware of any significant outsourcing in the US. The US
National Association of Local Government Auditors has over 250 municipalities as members which would seem to indicate
that the vast majority of US major municipalities have a significant internal audit resource. However, it should also be
noted that municipalities which do not have an internal audit function contract out specific audit projects on an as needed
basis. This, however, is not a substitute for an effective internal audit function which includes an ongoing evaluative audit
process, particularly in the case of an organization, the size and complexity of the new City of Toronto.
Current audit staff at the new City of Toronto have significant municipal experience and a unique perspective gained
through their ability to see all parts of the municipality. It is this broad integrational view that gives audit staff its
uniqueness and enhances its ability to effectively add value to the organization - whether that value be in the improvement
of controls or through the identification of operational risks and potential solutions. These advantages would be lost if an
internal audit process was contracted out to a third party. Further, there would be significant new start up costs to bringing
new employees up to speed to perform internal auditing in the municipality.
There is also an argument that outsourcing providers will command an ever increasing premium for their services. It is
possible that the outsourcing municipality will become dependent on the service of the outsourcing provider. As the
dependency increases, the municipality becomes vulnerable to pricing increases as the outsourcer assumes more of a
monopoly position especially if the provider gains more Ainstitutional@ knowledge about the municipality. The counter
argument is that (a) there are other outside providers; and (b) long term pricing agreements can be reached.
Nevertheless, in spite of the above, there may be instances where it makes sense to Apartner@ with an outside provider,
particularly when outside expertise is required on technical issues such as EDP security for example. In actual fact, the
department is currently working with an external consultant in relation to security issues pertaining to the Client
Identification Benefits System in the Social Services Division of Community Services. Rather than staff the department
with a wide range of technical expertise, the outsourcing of specific audit related functions may be more appropriate, and in
fact, should be accepted practice.
Proposed Contract with the Attest Auditor
The Municipal Act provides that the contract term relating to the hiring of an attest audit should be no longer than five
years. In view of the significant up front investment required by the attest auditors in an organization as complex and as
large as the City of Toronto, it is suggested that consideration be given to awarding a contract for a five-year period. This
practice is not unusual in the municipal sector in regard to the awarding of audit contracts. In addition, it is likely that the
annual fee for a term of five years would be less than a term of say three years.
The Audit of the Auditor
A frequently asked question relating to any internal audit function is AWho audits the Auditor?@. This is a valid question
as the auditor should be subjected to the same level of scrutiny/accountability as the entities audited.
The Audit Department would be subjected to the same attest audit process as other departments at the City. However, as
indicated previously, attest audits by external public accountants are conducted at a high level and depending on the scope
of the audit, little specific work would be conducted on many of the smaller departments, including the Audit Department.
In order to compensate for this, it is suggested that the City Auditor be subjected to a peer review process.
The City Auditor is a member of the Canadian Municipal Comprehensive Auditors Association (CMCA) and the US based
National Association of Local Government Auditors (NALGA). An important component of each organization is a
formalized peer review process which encourages members to participate in an arrangement whereby different audit
organizations review the operations of other member organizations. The CMCA has prepared guidelines for the
Professional Practice of Municipal Internal Auditing, pertaining to independence, professional proficiency, scope of audit
work, performance of audit work and management of the internal audit office. In addition, NALGA has prepared a quality
control review guide and members have been organized and trained to conduct peer reviews of audit organizations.
It is anticipated that the City of Toronto Auditor would participate in the peer review process of either the CMCA or
NALGA.
In addition, in the early 1980's, the members of the Institute of Chartered Accountants of Ontario approved the introduction
of a program whereby every member practicing public accounting in Ontario would be inspected.
The main purpose of practice inspection is to ensure that all members in the practice of public accounting maintain an
appropriate level of professional standards. Primarily, the practice inspection program is intended to be educational - to
help practitioners improve their professional standards, where necessary. Essentially, through a review of current
accounting and audit engagement files, practice inspection identifies where a practicing member may require assistance in
maintaining prescribed professional standards. The practice inspection program does not set new standards. Rather, the
standards that a member is expected to maintain are those prescribed by the Canadian Institute of Chartered Accountants
Handbook and the Institute of Chartered Accountants in Ontario Handbook.
Where the City Auditor is engaged in the practice of public accounting, the City Auditor should be subject to Practice
Inspections.
Conclusions:
The restructuring of the audit function will result in a reduction of staff from 50 to 20. Assuming the estimate of fees of
$1,750,000 relating to the outsourcing of the attest audit is reasonable, the restructuring will also result in an annualized
savings of approximately $1,253,000 from the audit function that existed prior to amalgamation. In addition, the new City
of Toronto will have an audit resource 100% devoted to value added projects, a situation which did not exist in all of the
individual amalgamating municipalities.
Contact Names and Telephone Numbers:
Jeffrey Griffiths, 392-8461
Wanda Liczyk, 392-8773
Michael Garrett
Chief Administrative Officer
Jeffrey Griffiths
City Auditor
Wanda Liczyk
Chief Financial Officer & Treasurer
JG:lm
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