Item - 2016.AU6.17

The Audit Committee recommends that:

1.  City Council receive the report (June 14, 2016) from the Auditor General for information.

Since 2011, the Auditor General’s Work Plan has included a project in relation to continuous controls monitoring of selected City expenses.  The objective of the Continuous Controls Monitoring Program is to provide periodic reports to management which assist in proactively monitoring financial transactions, detecting unusual expenses and identifying areas where internal controls could be strengthened.

Telecommunication expenses are included in the Auditor General’s Continuous Controls Monitoring Program as expenditures are significant and a number of issues were identified during our 2014 audit of telecommunication expenses.  The City currently maintains approximately 17,500 wireless phones and devices (includes pagers and data modems) and over 22,000 landlines or voice-over-internet phones (VOIP).  In 2015, the total cost for landlines/VOIP and wireless phones and devices was $12.8 million.

This report provides the results of our monitoring of City telecommunication expenses incurred from January 1, 2015 to December 31, 2015.  Our analysis identified over 1,100 phones and devices meeting one or more of the pre-determined exception criteria.  The exceptions were provided to management for review and comment.  Management responses and actions are provided in Appendix 1.

As a result of management actions, savings of approximately $218,300 have been identified for 2015.  These savings include one time savings of $5,600 and $212,700 in annually recurring savings which will result in total savings of approximately $1.06 million over a 5-year period.