Item - 2014.AU15.3

Confidential Attachment 1 to the report (June 4, 2014) from the Auditor General [AU15.3c] and the confidential communication [AU15.3.2] from Sony Centre Management were made public with redactions on June 11, 2014.  

City Council recessed its public session and met as Committee of the Whole in closed session on June 10, 2014, and considered confidential information on this Item as it relates to the security of the property belonging to the City or one of its agencies and corporations and personal matters about an identifiable person.

City Council recessed its public session and met as Committee of the Whole in two closed sessions on June 11, 2014, and considered confidential information on this Item as it relates to the security of the property belonging to the City or one of its agencies and corporations and personal matters about an identifiable person.

The Audit Committee recommends that:

1.         Given the seriousness of the findings of the Auditor General's Review of the Redevelopment of the Sony Centre, the specific recommendation from the Auditor General to conduct a review of the Sony Centre's Operating Agreement with the City, the enormity of the challenge of addressing the Redevelopment and related issues, the burden this places on a part-time voluntary board, and recognizing that the Theatres Working Group is still underway, City Council take the following actions:

a.         City Council remove all the current members of the Board of Directors of the Hummingbird (Sony) Centre Board of Directors and the Board of Directors of the Hummingbird Centre for the Performing Arts Corporation (Sony Centre), effective immediately.

b.         City Council appoint an interim Board of Directors for the Hummingbird (Sony) Centre, and the Board of Directors of the Hummingbird Centre for the Performing Arts Corporation (Sony Centre) effectively immediately, composed of:

-           Councillor Gary Crawford, as Chair;

-           Councillor Pam McConnell;

-           Councillor Shelley Carroll;

-           the City Manager, or his or her designate;

-           the Deputy City Manager, Cluster A or her or his designate; and

            -           the Deputy City Manager and Chief Financial Officer or his or her designate,

such appointments to be in effect until November 30, 2014 and until successors are appointed.

2.         City Council request the City Manager, in consultation with the Board of Directors of the Sony Centre for the Performing Arts, to conduct a comprehensive review of the Centre's operating agreement following any Council decision on the future of the Centre.

3.         City Council request the Deputy City Manager and Chief Financial Officer to re-evaluate the role of the City's Facilities Management Division in all future construction projects at the City's agencies and corporations.

4.         City Council request the City Manager to make available a centralized resource containing City of Toronto Act requirements and City policies and procedures that City agencies and corporations are required to follow.

5.         City Council request the Deputy City Manager and Chief Financial Officer review transactions reported in the financial statements of the City's agencies and corporations which relate to the capital works program recorded in the City's accounts.

6.         City Council request the City Manager to report to the Audit Committee on proposed changes to its annual review of financial statements of Agencies and Corporations which will identify unusual transactions and the appropriateness of the accounting for these financial transactions.

7.         City Council request the City Manager, in consultation with the Auditor General, to communicate to boards of City agencies and corporations those reports from the Auditor General that have general applicability, and to include those reports along with relevant City Policies as part of the materials to be made available as outlined in the Action Plan with respect to Recommendation 3 of the Auditor General's Review of the Redevelopment of the Sony Centre for the Performing Arts.

8.         City Council request the Auditor General to report to the first meeting of the Audit Committee in 2015, on the status of Recommendations 2 and 3 contained in his report (April 24, 2014).

9.         City Council request the City Manager to forward this report to the Boards of Directors of the Toronto Centre for the Arts and the St. Lawrence Centre for the Arts for information. 

The Board of Directors of the Hummingbird (Sony) Centre for the Performing Arts, on May 1, 2014, considered a report (April 24, 2024) from the Auditor General, headed "Review of the Redevelopment of the Sony Centre for the Performing Arts". 

The Board endorsed Recommendations for City Council (Recommendations 1, 2, 3, 12 and 14), and directed that the report be forwarded to the Audit Committee.

In addition, the Board adopted the following:

1.         The Board of Directors of the Sony Centre for the Performing Arts, in consultation with the City Manager, prepare a long-term strategic plan and a five-year business plan as requested by City Council.  Such plan to include strategies to improve operating results, as well as a funding plan for the capital program.

2.         The Board of Directors of the Sony Centre for the Performing Arts, ensure that where a business plan is amended or discontinued, that a replacement plan be prepared and presented for City Council approval.  Such business plan, and any subsequent amendments, be consistent with any Council-approved strategic objectives for the Centre.

3.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer to report the total funding received from all sources as well as the total of all costs related to all phases of the redevelopment.

4.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer to report on the status of required and optional deferred lifecycle maintenance works identified in previous building condition review reports.  Such report to include:

a.         Explanations for why work originally anticipated was omitted from the redevelopment.

b.         Identification of required and optional lifecycle maintenance works that have been included in the current 10-year Capital Plan.

c.         Estimates of the cost to complete the remaining work.

5.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer submit for Board approval a comprehensive procurement policy.  The development of this policy be conducted in consultation with the City Manager.  The procurement policy to include but not be limited to:

a.         Acceptable methods of procurement including appropriate dollar value thresholds for requiring open, competitive procurement.

b.         Circumstances where sole sourcing is allowed and the reporting requirements and authorizations required to approve sole source awards.

c.         Approval authorities required where purchases exceed previously authorized commitment levels.

d.         The level of documentation required to be retained in support of procurement decisions.

6.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer to review the administrative controls over the procurement process and ensure that such controls are appropriate.  In addition, an internal quality control process be established to ensure compliance with such controls.

7.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer to implement processes to ensure future compliance with the City's Policy on Donations to the City for Community Benefits.

8.         The Board of Directors of the Sony Centre for the Performing Arts request the Chief Executive Officer to confirm the appropriate accounting treatment of identified transactions with the Centre's external auditors.

The Board also:

-           Requested the Chair to call a Special Meeting of the Board of Directors of the Hummingbird Centre for the Performing Arts to further consider the report (April 24, 2014) from the Auditor General and possible additional recommendations.

-           Requested that representatives from the City Solicitor, the Chief Corporate Officer, and the City Manager's offices be invited to attend the Special Meeting of the Board to respond to questions, in particular, regarding the proposed Public Plaza.