Item - 2016.AU7.7

The Audit Committee recommends that:

1.  City Council receive the Auditor General’s 2017 Audit Work Plan.

The purpose of this report is to provide City Council with an overview of the work the Auditor General plans to conduct in 2017.  This report contains the following:

Appendix 1 - 2017 Audit Work Plan

Appendix 2 - 2016 Audit Work Plan – Deferred Audit Projects

Appendix 3 - Detailed Listing of Audit Reports issued from 2012 to 2016

The 2017 Audit Work Plan provides City Council with an overview of how the resources allocated to the Auditor General’s Office will be used in 2017.

The planned 2017 audits will provide independent information for City Council to hold City administrators accountable for providing stewardship over public funds, strengthen management controls, and enhance the efficiency and effectiveness of City services.

The Audit Work Plan includes a list of audits in progress, new audit projects, data analytics and continuous monitoring projects, Fraud and Waste Hotline investigative work and follow-up audits.  Follow-up audits are conducted to ensure that management has taken appropriate action to implement the recommendations from past audit and investigative reports.  The Auditor General may revise the Audit Work Plan as new information arises.

The Auditor General undertakes a risk-based audit approach.  Every five years the Auditor General performs an extensive risk assessment of the operations of the City and its major agencies and corporations to establish audit priorities. The results of the five-year risk assessment are evaluated each year during the audit planning process, and new risks are added as required to keep the risk universe up to date.

The Auditor General completed her latest risk assessment in 2015.  The risk assessment included a survey of 188 organizational units within the City, and agencies and corporations under the Auditor General’s mandate.

The 2017 Audit Work Plan includes priority projects identified from the latest risk assessment.  The Auditor General’s limited resources impact the number of high priority projects that can be included in the 2017 Audit Work Plan.  Given current resources, completion of all of the high priority projects identified would take approximately five years. The Auditor General has provided a detailed list of backlog projects in Appendix 4 of her 2016 Audit Work Plan report:

http://www.toronto.ca/legdocs/mmis/2015/au/bgrd/backgroundfile-84582.pdf

These high priority audit areas can only be addressed on a timelier basis, if additional funding is provided to the Office.

In addition, audit standards require that specialists be hired on certain projects to ensure sufficient technical knowledge is available on the audit team.  The Auditor General plans to use specialists in Information Technology (IT) and other specialized areas. A small amount of funding has been included in the budget for retaining consultants or experts.  The Auditor General will be able to acquire services of these specialists only if the funding for professional services in our 2017 budget request is approved.