Item - 2016.AU7.5

The Audit Committee recommends that:

1.  City Council request the Manager, Fair Wage Office, to ensure that payroll investigations, where possible and resource permitting, include procedures that verify the completeness and accuracy of vendor-provided payroll information.

2.  City Council request the Director, Purchasing and Materials Management Division, in consultation with the Manager, Fair Wage Office, to consider enhancements to current contract management procedures such that:

a.  Guidance is provided on the need for collaboration and timely communication to the Fair Wage Office of any contract issues that could present fair wage implications.

b.  A process be implemented to increase divisional contract management staff’s awareness of the fair wage requirements that reinforces collaboration with the Fair Wage Office.

3.  City Council request the Manager, Fair Wage Office, to implement processes to ensure that:

a.  All back-wages are accurately calculated.

b.  Fair Wage Office staff be required to retain sufficient documented evidence to support the basis of all back-wage calculations.

c.  A secondary review be conducted to ensure back-wage calculations are accurate.

d.  The Manual of Office Procedures be updated to reflect all process improvements and compliance with these procedures be monitored on an ongoing basis.

4.  City Council request the Manager, Fair Wage Office, to implement processes that ensure adequate evaluation of multiple violations in accordance with the Fair Wage Policy and internal Office guidelines; such analysis to be documented and retained in the investigation files, and recommendations for disqualification be reported in a timely manner.

5.  City Council request the Manager, Fair Wage Office, to effectively enforce the non-compliance provisions in the Fair Wage Policy particularly in cases where a vendor does not provide the required payroll information to the Office.

6.  City Council request the City Solicitor, in consultation with the Manager, Fair Wage Office, to review the current penalty provisions to ensure that they are effective in deterring vendors from breaching the Fair Wage Policy.

7.  City Council request the Manager, Fair Wage Office, to give consideration to extending Fair Wage Policy investigations to subcontractors where applicable and feasible.

8.  City Council request the Manager, Fair Wage Office, to systematically track complaints received by the Office and the related complaint information through an intake system.  In developing or acquiring the intake system, the Office should consider consulting the City’s Accountability Offices to assess the feasibility of leveraging the existing systems being used by these Offices.

9.  City Council request the Executive Director, Human Resources, subsequent to the implementation of a Fair Wage Office complaint tracking system, to review the work demands and resources allocated to fair wage complaint investigations and random reviews to ensure the Office can effectively carry out the responsibilities under Chapter 67 of the Toronto Municipal Code.

10.  City Council request the City Manager, to forward this report and the Fair Wage Policy to the City’s major agencies and clarify the applicability of the Policy requirements to these agencies.

11.  City Council request the Manager, Fair Wage Office, to forward its Council approved Annual Reports and vendor disqualification information to the City's major agencies.

12.  City Council request the Manager, Fair Wage Office, to review and update its Manual of Office Procedures to ensure the level of documentation by the Fair Wage Office is sufficient to hold the Office accountable for its decisions and actions.  Updated documentation requirements should be implemented in all investigation files.

13.  City Council request the City Solicitor, in consultation with the Manager, Fair Wage Office, consider submission for enactment by City Council, amendments to the current Fair Wage Policy, such that:

a.  Updates to the Fair Wage Schedules follow the ratification of construction industry collective agreements.

b.  The Policy reflects the current reporting structure.

This report presents the results of the audit of the Fair Wage Office (“Office”).  The objective of this audit was to review whether investigations conducted by the Office ensured contractor compliance with the City’s Fair Wage Policy (“Policy”) contained in Chapter 67 of the Toronto Municipal Code.

This report contains 13 recommendations.  Given the Office’s limited resources and the large volume of City contracts involving fair wage requirements, the Office is carrying out its mandate to the best of its ability. Our audit identified a number of areas where the Office can further improve its effectiveness in enforcing the Policy requirements.  Moreover, there are opportunities to enhance a collaborative approach with various City divisions and agencies.  This approach can serve as an efficient way to deterring and detecting non-compliance.

The recommendations in this report address the following areas of Fair Wage Policy enforcement:

·  Ensuring the accuracy of back-wages owing to contracted employees by taking steps to verify the accuracy and completeness of vendor-provided payroll records.

·  Documenting the analysis of vendor violations that do or do not warrant recommendations for disqualification.

·  Enhancing the current investigative approach to include, where feasible, investigations of subcontractors and a sufficient number of random reviews.