Item - 2019.AU4.11

During the review of the Order Paper on October 29, 2019, City Council adopted a procedural motion to remove this Item from the jurisdiction of the Audit Committee and bring it forward for consideration by City Council.

The Audit Committee recommends that:

1.  City Council receive the report (October 9, 2019) from the Auditor General for information.

2.  City Council direct that the confidential information contained in Confidential Attachment 1 to the report (October 9, 2019) from the Auditor General remain confidential in its entirety, as it involves the security of property belonging to the City of Toronto.

The Audit Committee requested the Chief Financial Officer and Treasurer to report to the Audit Committee for its meeting on February 10, 2020 on the high-priority outstanding recommendation originally contained in the Auditor General's report (June 12, 2012) entitled "Improving Reporting and Monitoring of Employee Benefits" (AU7.10):

2. City Council request the Director, Pension, Payroll and Employee Benefits, give consideration to the formal documentation of an annual evaluation of the benefit administrator performance as it relates to prevention, detection and investigation of benefit fraud including fraud related to the receipt of Long Term Disability benefits.

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The Audit Committee recessed its public session and met in closed session to consider confidential information on this Item as it relates to the security of property belonging to the City of Toronto.

This report provides information regarding the implementation status of publicly reported recommendations made by the Forensic Unit. These recommendations were made in the context of the annual reports on the Fraud and Waste Hotline and investigations.

Following up on outstanding recommendations from previous reports is important and ensures that management has taken appropriate action to implement recommendations.

From January 1, 2007 to December 31, 2017, a total of 57 recommendations related to City Divisions made by the Forensic Unit were reported publicly. Twenty-nine of them were implemented before 2018. Of the remaining 28 recommendations:

-     3 recommendations were implemented in 2019
-     7 recommendations remain outstanding
-     17 were deferred until the next follow-up
-     1 recommendation was no longer applicable
 

For the current follow-up process, management reported that seven were fully implemented. However, based on our review we determined that three of those recommendations have not been fully implemented and one is no longer applicable. Management agreed with our assessments and will take additional actions to fully implement the outstanding recommendations in the future.

One additional confidential recommendation was made to management staff and has been fully implemented. The implementation status of confidential recommendations is communicated directly to the City Manager.

The Forensic Unit also made 11 recommendations related to City agencies and corporations as at December 31, 2017. The status of these recommendations was included in the Auditor General’s 2019 Status Report on Outstanding Audit Recommendations for City Agencies and Corporations that was considered by Audit Committee on June 28, 2019. Follow-up on any outstanding recommendations for agencies and corporations will be included in a separate Forensic Unit report next year.

Continued efforts to implement outstanding recommendations will provide additional benefits to the City through cost savings, additional revenue, control improvements and enhanced service delivery.