Item - 2016.AU5.3

The Audit Committee recommends that:

1. City Council request the Director, Revenue Services, to develop a report identifying high risk and high value accounts.  The report should be reviewed for long outstanding overdue accounts on a quarterly basis to ensure that appropriate measures for collection are taken. 

2. City Council request the Director, Revenue Services, to develop a report to identify missing information in water accounts and ensure accounts are updated. 

3. City Council request the Director, Revenue Services, to develop criteria for assignment of long overdue accounts to third-party collection services.  Assignments should be tracked and collection agency performance should be monitored.

4. City Council request the Director, Revenue Services, to review and renew third-party collection service contracts on a timely basis.

5. City Council request the Director, Revenue Services, in consultation with the General Manager, Toronto Water, to evaluate options for restricting the supply of water on large overdue accounts where all other available collection measures have been exhausted.

6. City Council request the Director, Revenue Services, to periodically review all accounts with outstanding water account balances that do not have a corresponding property tax roll and ensure missing tax roll information in the water billing system are investigated and resolved.

7. City Council request the Director, Revenue Services, in consultation with the City Solicitor, to review the potential of charging interest on outstanding water account balances that are not eligible for transfer to property taxes.  Such a change may require amendment to the City of Toronto Municipal Code.

8. City Council request the Director, Revenue Services, to develop a process for periodic review of overdue accounts with “Do Not Transfer’ status to ensure that these accounts are followed-up and their collection efforts are expedited.  Specific collection approaches should be developed to improve collections on overdue accounts for each type of account holder or owner.

9.  City Council request the Director, Revenue Services, to ensure the Council approved amendment for apportionment and transfer of outstanding condominium water bills to the tax accounts of individual unit owners be implemented.

10.  City Council request the Director, Revenue Services, to implement a process to identify water accounts where a bill has not been issued in the appropriate bill cycle and ensure timely investigation and resolution of any problems in processing the water bills. 

11.  City Council request the Director, Revenue Services, to ensure bills for new accounts and final bills for accounts that are being closed are issued and collected on a timely basis.  Benchmarks for expected timelines for issuing bills upon creation or closure of accounts should be developed, with performance against the benchmarks monitored and any significant deficiencies resolved.

12.  City Council request the Director, Revenue Services, to develop a formal dispute resolution process and reporting criteria for disputes that remain unresolved for an extended period of time.  The process should also include communication to clients for payment of current dues while the disputed amounts are being resolved.

13.  City Council request the Director, Revenue Services, to review existing outstanding balances for inactive accounts and develop a strategy to collect these accounts.

14.  City Council request the Director, Revenue Services, to review credit balances for inactive accounts and coordinate with the Deputy City Manager and Chief Financial Officer, and the City Solicitor with a view to evaluating whether credit balances in ‘Inactive Accounts’ can be transferred to revenue. 

15.  City Council request the Director, Revenue Services, to review practices at other municipalities relating to treatment of small balances for inactive accounts and develop criteria to clean-up such accounts.

16.  City Council request the Director, Revenue Services, to establish appropriate financial signing authority limits, such that billing reversals, credits and other account adjustments are reviewed and approved by an appropriate level of management based on the materiality of the adjustment amount.

17.  City Council request the Director, Revenue Services, to ensure that reasons for billing reversals, credits and adjustments are appropriately documented, with supporting source documents retained where applicable.

18.  City Council request the Director, Revenue Services, in consultation with the General Manager, Toronto Water, to:

a.         Establish a formal protocol for setting up in the water billing system non-billable City accounts (where water consumption requires tracking but no payments are required from the Divisions), as well as, billable accounts (where payments are required from the Divisions for water service provided); and

b.         Review existing internal City accounts with overdue balances to determine if these are collectible and billable.  The account status should be updated accordingly and outstanding balances should be collected or written-off.  

19.  City Council request the Director, Revenue Services, to review the recommendations in this report and where applicable implement similar processes for collection of overdue solid waste management accounts. 

The following members of the Auditor General's Office gave a presentation to the Audit Committee on this Item:

- Beverly Romeo-Beehler, Auditor General

- Ina Chan, Assistant Auditor General

- Syed Ali, Audit Director, IT and Strategy.