Item - 2011.AU1.10

The Audit Committee received the report (January 24, 2011) from the Auditor general for information.

This report responds to a request from the Audit Committee that the Auditor General, “provide the value added of his department.”

At the request of the Audit Committee, attempts have been made to identify the extent of the quantifiable financial benefits which have resulted from the work conducted by the Auditor General’s Office.

While certain reports have resulted in tangible cost savings, the more important benefits provided relate to the avoidance of future costs, as well as the protection of City assets.  Nevertheless, tangible annual cost savings have occurred, or will occur, as a result of the work conducted by the Auditor General.  Over the five-year period commencing January 1, 2006, the estimated potential savings to the City are nearly $97 million compared to a cumulative audit expenditure of $18.6 million.  In simple terms, for every $1 invested in the audit process the return on this investment has been $5.20.  Many of the estimated cost savings are ongoing and occur on an annual basis.