Item - 2017.AU10.12

The Audit Committee recommends that:

1. City Council receive the report (October 13, 2017) from the Auditor General, for information.

2. City Council not authorize the public release of the confidential information contained in Confidential Attachment 1, attached to the report (October 13, 2017) from the Auditor General, as it contains information related to the security of property belonging to the City or one of its agencies or corporations;  labour relations or employee negotiations; and litigation or potential litigation that affects the City or one of its agencies or corporations.

Every year, the Auditor General reviews the implementation status of outstanding audit recommendations and reports the results to City Council through the Audit Committee.

This report provides information regarding the implementation status of audit recommendations issued to City divisions in Cluster C. The divisions in Cluster C are:

Accounting Services
Chief Corporate Officer
Corporate Finance
Corporate Security
Environment and Energy
Facilities Management
Finance and Administration
Financial Planning
Fleet Services
Information and Technology
Pension, Payroll and Employee Benefits
Purchasing and Materials Management
Real Estate Services
Revenue Services
Treasurer
311 Toronto
 

This report also provides information on the potential cost savings from outstanding audit recommendations relating to City divisions in Cluster C in response to a motion adopted by the Audit Committee at its July 4, 2016 meeting.

As of December 31, 2015, there were a total of 27 Cluster C audit reports with 133 outstanding recommendations. Among the 133 recommendations included in the 2017 follow-up review, we verified that 54 recommendations (41 per cent) have been fully implemented, 69 recommendations (52 per cent) were either reported by management or determined by our review as being not fully implemented, and 10 recommendations (7 per cent) are no longer applicable.

Staff implemented the audit recommendations in four audit reports and will help the City realize significant cost savings. A total of approximately $4.3 million in one-time savings and $5.8 million in annual recurring savings were estimated by staff as a result of implementing recommendations in the four audit reports. Details of the audit recommendations and savings are provided in the Section "Noteworthy 2017 Follow-Up Results".

Continued efforts to implement outstanding recommendations will provide additional benefits to the City such as cost savings, improved controls, and enhanced service delivery.

Many of the City divisions in Cluster C have undertaken a significant amount of work to implement the recommendations. While a number of the recommendations have not been fully implemented, we recognize that some of the recommended changes require significant system or process changes, hence necessitating a longer time frame for full implementation.

Among the audit reports with outstanding recommendations, the 2008 audit report on disaster recovery planning for City computer facilities continues to have four recommendations not fully implemented to date. Management indicated that they have made significant progress towards the implementation of these recommendations. Further details are provided on page 10 of this report, and page 16 in Attachment 2.

We express our appreciation for the co-operation and assistance we received from management and staff of City divisions in Cluster C during this year's follow-up review process.