Item - 2013.AU10.10
Tracking Status
- City Council adopted this item on April 3, 2013 without amendments.
- This item was considered by the Audit Committee on February 15, 2013 and adopted without amendment. It will be considered by City Council on April 3, 2013.
AU10.10 - City Accounts Payable - Payment Controls and Monitoring Require Improvement
- Decision Type:
- ACTION
- Status:
- Adopted
- Wards:
- All
City Council Decision
City Council on April 3 and 4, 2013, adopted the following:
1. City Council request the Director, Accounting Services to evaluate the feasibility of providing a report to divisions identifying potential discount losses due to a lack of timely resolution of outstanding divisional queries prior to discount expiry dates.
In addition, Accounting Services should provide accumulated discount lost reports by division to senior management staff on a periodic basis for follow-up action.
2. City Council request the City Manager to issue instructions to City division heads for timely resolution of outstanding accounts payable queries.
3. City Council request the Chief Corporate Officer to develop a process to ensure outstanding accounts payable queries are promptly resolved in order to obtain vendor discounts.
4. City Council request the Director, Accounting Services to ensure vendor credits are reviewed in a timely manner and follow-up action results in actual credit adjustments.
5. City Council request the Director, Accounting Services to ensure that vendor set-up forms are adequately reviewed and missing information is obtained from respective divisions before finalizing in SAP.
6. City Council request the Director, Accounting Services to evaluate the feasibility of completing a review of the SAP vendor master database to identify and complete missing vendor information in SAP for active vendors.
7. City Council request the Director, Accounting Services to evaluate existing vendor accounts and payment monitoring reports with regard to improving reporting efficiency and effectiveness.
8. City Council request the Director, Purchasing and Materials Management to further enhance divisional purchasing coordination through improved reporting and feedback with City divisions in order to facilitate consolidating purchases.
9. City Council request the Director, Purchasing and Materials Management, in consultation with the management of City Agencies and Corporations, to review and consider the benefits of consolidating purchases with City Agencies and Corporations.
10. City Council request the Director, Accounting Services to ensure purchasing compliance reports are provided to respective divisions on a periodic basis and followed-up with non-compliant divisions.
11. City Council request the Director, Purchasing and Materials Management, in consultation with the City Solicitor, to ensure that a conflict of interest declaration is included in the sole source process including all future sole source contracts.
Further, that the Director, Purchasing and Materials Management, in consultation with City division heads and the City Solicitor, as necessary, evaluate whether existing sole source vendors should be contacted to provide a conflict of interest declaration.
12. City Council request the City Manager to evaluate the feasibility of developing a process for periodically comparing staff and vendor address data to identify potential conflicts of interest.
Background Information (Committee)
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55720.pdf
Appendix 1 - Auditor General's Report - City Accounts Payable - Payment Controls and Monitoring Require Improvement (January 7, 2013)
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55721.pdf
Appendix 2 - Management's Response
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55722.pdf
Motions (City Council)
Vote (Adopt Item) Apr-03-2013 10:02 AM
| Result: Carried | Majority Required - AU10.10 - Adopt the item |
|---|---|
| Total members that voted Yes: 37 | Members that voted Yes are Paul Ainslie, Ana Bailão, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Mike Del Grande, Frank Di Giorgio, Sarah Doucette, Paula Fletcher, Rob Ford, Mary Fragedakis, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Peter Milczyn, Ron Moeser, Frances Nunziata (Chair), Cesar Palacio, James Pasternak, Gord Perks, Jaye Robinson, Karen Stintz, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam |
| Total members that voted No: 0 | Members that voted No are |
| Total members that were Absent: 8 | Members that were absent are Maria Augimeri, John Filion, Doug Ford, Giorgio Mammoliti, Denzil Minnan-Wong, John Parker, Anthony Perruzza, David Shiner |
AU10.10 - City Accounts Payable - Payment Controls and Monitoring Require Improvement
- Decision Type:
- ACTION
- Status:
- Adopted
- Wards:
- All
Committee Recommendations
The Audit Committee recommends that:
1. City Council request the Director, Accounting Services to evaluate the feasibility of providing a report to divisions identifying potential discount losses due to a lack of timely resolution of outstanding divisional queries prior to discount expiry dates.
In addition, Accounting Services should provide accumulated discount lost reports by division to senior management staff on a periodic basis for follow-up action.
2. City Council request the City Manager to issue instructions to City division heads for timely resolution of outstanding accounts payable queries.
3. City Council request the Chief Corporate Officer to develop a process to ensure outstanding accounts payable queries are promptly resolved in order to obtain vendor discounts.
4. City Council request the Director, Accounting Services to ensure vendor credits are reviewed in a timely manner and follow-up action results in actual credit adjustments.
5. City Council request the Director, Accounting Services to ensure that vendor set-up forms are adequately reviewed and missing information is obtained from respective divisions before finalizing in SAP.
6. City Council request the Director, Accounting Services to evaluate the feasibility of completing a review of the SAP vendor master database to identify and complete missing vendor information in SAP for active vendors.
7. City Council request the Director, Accounting Services to evaluate existing vendor accounts and payment monitoring reports with regard to improving reporting efficiency and effectiveness.
8. City Council request the Director, Purchasing and Materials Management to further enhance divisional purchasing coordination through improved reporting and feedback with City divisions in order to facilitate consolidating purchases.
9. City Council request the Director, Purchasing and Materials Management, in consultation with the management of City Agencies and Corporations, to review and consider the benefits of consolidating purchases with City Agencies and Corporations.
10. City Council request the Director, Accounting Services to ensure purchasing compliance reports are provided to respective divisions on a periodic basis and followed-up with non-compliant divisions.
11. City Council request the Director, Purchasing and Materials Management, in consultation with the City Solicitor, to ensure that a conflict of interest declaration is included in the sole source process including all future sole source contracts.
Further, that the Director, Purchasing and Materials Management, in consultation with City division heads and the City Solicitor, as necessary, evaluate whether existing sole source vendors should be contacted to provide a conflict of interest declaration.
12. City Council request the City Manager to evaluate the feasibility of developing a process for periodically comparing staff and vendor address data to identify potential conflicts of interest.
Origin
Summary
The Auditor General’s 2012 Work Plan included a review of the management and administration of City divisional accounts payable. This review focused on assessment of controls over the creation of vendor accounts, vendor payments and other related processes within the City Accounting Services Division and Purchasing and Materials Management Division.
This report contains 12 recommendations. The majority of recommendations relate to strengthening controls over vendor account management and payments. We have also made recommendations to improve purchasing practices and controls.
Background Information
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55720.pdf
Appendix 1 - Auditor General's Report - City Accounts Payable - Payment Controls and Monitoring Require Improvement (January 7, 2013)
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55721.pdf
Appendix 2 - Management's Response
https://www.toronto.ca/legdocs/mmis/2013/au/bgrd/backgroundfile-55722.pdf