Item - 2018.AU13.11

Tracking Status

  • City Council adopted this item on July 23, 2018 with amendments.
  • This item was considered by Audit Committee on July 13, 2018 and was adopted with amendments. It will be considered by City Council on July 23, 2018.

AU13.11 - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto

Decision Type:
ACTION
Status:
Amended
Wards:
All

City Council Decision

City Council on July 23, 24, 25, 26, 27 and 30, 2018, adopted the following:

 

1. City Council request the Deputy City Manager, Internal Corporate Services to create a governance process for any City-owned buildings, inclusive of standards, protocols and monitoring practices, that enables all Divisions, Agencies and Corporations:

 

a. to ensure compliance with all Ontario Fire Code regulations; and

 

b. to retain on file for a period of not less than two years all documentation supporting the City's compliance with the Ontario Fire Code.

 

2. City Council request the General Manager, Facilities Management, to:

 

a. bring all buildings in compliance with the Ontario Fire Code;

 

b. establish a process to monitor the completeness of fire inspections and monitor the rectification of all fire safety deficiencies for all City Divisions, Agencies and Corporations; and

 

c. report back to City Council annually on the level of compliance.

 

3. City Council request the General Manager, Facilities Management, to:

 

a. develop a training curriculum that encompasses all requirements of the Ontario Fire Code and be delivered to those delegated and/or designated responsibility by the City of Toronto to ensure compliance with the requirements of the Ontario Fire Code; and

 

b. keep records of this training consistent with the provisions of Division B, Clause 1.1.2.2 (a) of the Ontario Fire Code.

 

4. City Council request the General Manager, Facilities Management, to ensure all Fire Code-mandated reports submitted, including inspection reports and deficiency clearance reports, be in a format that is cross-referenced to invoices and facilitates the verification that work has been completed in accordance with the Ontario Fire Code.

 

5. City Council request that, for contracts involving life safety inspections, the General Manager, Facilities Management, work with Legal Services, Purchasing and Materials Management and Toronto Fire Services to:

 

a. update contracts to prohibit the submission of official legal documents, such as inspection reports, in a format that can be manipulated;

 

b. update contracts to ensure the Ontario Fire Code requirements are included;

 

c. update contracts with the appropriate terms and conditions, if not already in place, that allows for immediate suspension of a contract if there are significant performance issues with a life safety inspection contractor or if a contractor or person working for the contractor is charged and/or convicted for violations of the Fire Protection and Prevention Act and accompanying Regulations; and

 

d. develop and implement a life safety vendor training orientation and training package, to be completed prior to the commencement of service.

 

6. City Council request that, for contracts involving life safety inspections, the General Manager, Facilities Management, work with Legal Services and Purchasing and Materials Management to:

 

a. develop a protocol including establishing the appropriate qualifications, criteria, and/or background/security checks needed to be included in the contract to ensure that qualified and reputable persons are carrying-out the life safety inspections;

 

b. develop a protocol to identify the due diligence steps that will be undertaken by staff when the contractor arrives at the site to conduct inspections; and

 

c. develop a watch list to track life safety service providers that have significant performance issues, charges and/or convictions for violations of the Fire Protection and Prevention Act and accompanying Regulations.

 

7. City Council request the Fire Chief and General Manager, Toronto Fire Services to work with the Ontario Fire Marshal to determine if such a watch list of those companies and persons charged or convicted of violations of the Fire Protection and Prevention Act and accompanying Regulations is needed province-wide because the life safety service providers may work with other municipalities and private buildings.

 

8. City Council support the Fire Chief and General Manager, Toronto Fire Services in recommending to the Minister of Community Safety and Correctional Services to amend the Fire Protection and Prevention Act limitation period and discoverability language as required to lengthen the time to conduct complex investigations in support of fire safety.

 

9. City Council request the General Manager, Facilities Management to develop and be accountable for the oversight of a model that:

 

a. treats the inspection of life safety systems in a building as a holistic system rather than using a fragmented approach;

 

b. uses a centralized model with Facilities Management as the overseer of life safety inspection services across all City-owned buildings;

 

c. standardizes inspection reports for life safety service providers and ensure they are comprehensive enough to comply with the Ontario Fire Code requirements;

 

d. creates a centralized database to track the life safety inspection process;

 

e. creates a centralized complaints process regarding life safety service providers; and

 

f. clarifies roles and responsibilities of staff, life safety service providers and building owners.

 

10. City Council authorize the Fire Chief and General Manager, Toronto Fire Services to assist the Ontario Fire Marshall, in any way possible, to address any Province-wide issues arising out of the report (June 28, 2018) from the Auditor General.

 

11. City Council request the Fire Chief and General Manager, Toronto Fire Services to make recommendations to the appropriate Provincial authorities about the need to:

 

a. regulate the training and licensing for all life safety inspection services including emergency lighting and fire extinguishers, so that inspections of buildings is treated as a system; and

 

b. where a contractor is non-compliant, providing an avenue for delicensing, if necessary.

 

12. City Council request the General Manager, Facilities Management to design a quality control program to verify that those companies performing the inspections do so in accordance with the Ontario Fire Code.

 

13. City Council request the Fire Chief and General Manager, Toronto Fire Services to make recommendations to the Ontario Fire Marshal to consider training and/or certification for building owners or the staff responsible on behalf of building owners so that they understand their roles and responsibilities under the Ontario Fire Code for the inspection of life safety systems, including sprinklers, emergency lighting and other fire suppression systems including the requirement for the keeping of records consistent with the provisions of Division B, Clause 1.1.2.2 (a) of the Ontario Fire Code.

 

14. City Council request Fire Chief and General Manager, Toronto Fire Services to make recommendations to the Ontario Fire Marshal related to a brochure available in all mediums that outlines the building owner's responsibilities, and that the brochure be available on Toronto Fire Service's website and distributed as a quick reference to all building owners as part of the approval of their fire safety plans.

 

15. City Council request the Fire Chief and General Manager, Toronto Fire Services to make a recommendation to the Ontario Fire Marshall that a Technical Advisory Committee be struck to review the system-wide issues raised in this report and make recommendations to the Minister of Community Safety and Correctional Services.

 

16. City Council direct the City Manager to advise all staff to report any allegations of potential wrongdoing involving City resources, including potential wrongdoing against the City by third-party vendors, to the Auditor General for further investigation.

 

17. City Council direct the City Manager to report to Council with advice about an obligation, in addition to those under the City of Toronto Act and the Toronto Public Service By-law, requiring City employees to report to the Auditor General allegations of wrongdoing by third parties.

 

18.City Council authorize the Deputy City Manager, Internal Corporate Services to negotiate and enter into a non-competitive agreement(s) for up to $650,000 ($661,440 net of HST recoveries) with third-party vendor(s) for services to conduct a fire and life safety audit of City facilities and report back to the appropriate Committee on findings, including required corrective actions. 
  

19.  City Council authorize the Deputy City Manager, Internal Corporate Services to terminate any contracts with vendors providing fire and life safety services, in accordance with the contract terms and conditions, if the audit finds that these vendors have failed to provide required documentation on a regular basis for services provided at City sites or any other irregularities uncovered through the audit; if charges are brought about by Toronto Fire Services, the Office of the Fire Marshall or any other jurisdiction, to be put on a watch list; and City Council authorize the Chief Purchasing Officer, in consultation with the General Manager, Facilities Management and the City Solicitor, to suspend those vendors from being awarded future procurements for a period of up to 5 years.
 

20.  City Council direct the Deputy City Manager, Internal Corporate Services to complete the implementation of the recommendations from the 2005 Maintenance and Administrative Controls Review and provide a progress update to Council in the first quarter of 2019.
 

21.  City Council increase the Facilities, Real Estate, Environment and Energy complement by adding an additional 5.0 temporary FTEs for a six month period commencing in July 2018, to resource the Fire and Life Safety Task Force, with funding made available from within the 2018 Approved Operating Budget for Facilities, Real Estate, Environment and Energy.
  

22. City Council amend the 2018 Facilities, Real Estate, Environment and Energy Capital Budget, to create a new sub-project called "Fire and Life Safety Audits" project that will fund the non-competitive third party agreement(s) for services to conduct a fire and life safety audits, with a total project cost of $0.661 million and cash flows of $0.661 million in 2018, with funding reallocated from previously approved emergency capital project (CCA244-16) included in Facilities, Real Estate, Environment and Energy's 2018-2027 Approved Capital Plan.
 

23.  City Council direct the Fire Chief and General Manager, Toronto Fire Services to report through the 2019 budget process on any operational and financial implications of increasing the number of inspections completed by Toronto Fire Services for the purposes of assessing fire safety and compliance with the Fire Code in buildings and structures within the municipality.

 

24. City Council direct the Fire Chief and General Manager, Toronto Fire Services to assign the additional resources concerning the Toronto Fire Services Fire Safety Quality Assurance Section, described as Option 1 in the supplementary report (July 20, 2018) from the Fire Chief and General Manager, Toronto Fire Services, and to adjust the 2018 and future-year Service Level standards as may be required; and that the approved 2018 Toronto Fire Services Operating Budget be increased by $392,863 to enable the addition of 11 FTEs, effective September 1, 2018, with one-time funding, from the Tax Rate Stabilization Reserve.

 

25. City Council request the Fire Chief and General Manager, Toronto Fire Services to submit the 2019 annualized impact of $1,135,528, related to the addition of 11 FTEs, with the 2019 Toronto Fire Services budget submission for consideration by the City Manager and the Chief Financial Officer as part of the 2019 administrative review process.

 

26. City Council direct the Fire Chief and General Manager, Toronto Fire Services to report back to City Council in advance of the commencement of the 2020 budget process with respect to the analysis arising from the enhanced service levels as outlined in Option 1 in the supplementary report (July 20, 2018) from the Fire Chief and General Manager, Toronto Fire Services and recommendations for further Inspection and/or Quality Assurance service level enhancements.

 

27. City Council adopt the confidential instructions to staff in Confidential Attachment 1 to the supplementary report (July 19, 2018) from the City Solicitor.

 

28. City Council direct that Confidential Attachment 1 to the supplementary report (July 19, 2018) from the City Solicitor remain confidential in its entirety as it relates to potential litigation and contains advice that is subject to solicitor-client privilege.

 

29.  City Council direct that Confidential Attachment 1 to the supplementary report  (July 20, 2018) from the Interim City Manager remain confidential in its entirety, as it pertains to personal matters about an identifiable person, including City employees.

 

Confidential Attachment 1 to the supplementary report (July 19, 2018) from the City Solicitor remains confidential in its entirety in accordance with the provisions of the City of Toronto Act, 2006, as it pertains to potential litigation and it contains advice that is subject to solicitor-client privilege.

 

Confidential Attachment 1 the supplementary report  (July 20, 2018) from the Interim City Manager remains confidential in its entirety in accordance with the provisions of the City of Toronto Act, 2006, as  it pertains to personal matters about an identifiable person, including City employees.

Confidential Attachment - Litigation that affects the City, advice that is subject to solicitor-client privilege and pertains to personal matters about an identifiable person including City employees.

Background Information (Committee)

(June 28, 2018) Report from the Auditor General - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-117986.pdf
Investigation at a Glance: Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118386.pdf
Revised Attachment 1: Auditor General's Report - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto - revised on August 14, 2018
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118387.pdf
Presentation Material submitted by the Auditor General
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118726.pdf
Presentation Material submitted by the Deputy City Manager, Internal Corporate Services
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118727.pdf

Background Information (City Council)

(July 19, 2018) Supplementary report from the City Solicitor on Follow-Up related to Life Safety Inspections (AU13.11a)
https://www.toronto.ca/legdocs/mmis/2018/cc/bgrd/backgroundfile-119183.pdf
Confidential Attachment 1
(July 20, 2018) Supplementary report from the Interim City Manager on Raising the Alarm: Response to Audit Committee Direction (AU13.11b)
https://www.toronto.ca/legdocs/mmis/2018/cc/bgrd/backgroundfile-119187.pdf
Confidential Attachment 1
(July 20, 2018) Revised supplementary report from the Deputy City Manager, Internal Corporate Services on Fire and Life Safety Compliance of City Buildings (AU13.11c)
https://www.toronto.ca/legdocs/mmis/2018/cc/bgrd/backgroundfile-119191.pdf
(July 20, 2018) Supplementary report from the Fire Chief and General Manager, Toronto Fire Services on Assessing Fire Safety and Fire Code Compliance - Toronto Fire Services Service Level Enhancements, including Attachment 1 (AU13.11d)
https://www.toronto.ca/legdocs/mmis/2018/cc/bgrd/backgroundfile-119263.pdf

Communications (Committee)

(July 6, 2018) Letter from Mayor John Tory (AU.New.AU13.11.1)
https://www.toronto.ca/legdocs/mmis/2018/au/comm/communicationfile-86098.pdf

Motions (City Council)

1 - Motion to Amend Item (Additional) moved by Councillor Mary Fragedakis (Carried)

That:

 

1. City Council adopt the recommendations contained in the supplementary report (July 19, 2018) from the City Solicitor [AU13.11a], as follows:

 

1. City Council adopt the confidential instructions to staff in Confidential Attachment 1 to the supplementary report (July 19, 2018) from the City Solicitor.

 

2. City Council direct that Confidential Attachment 1 to the supplementary report (July 19, 2018) from the City Solicitor remain confidential in its entirety, as it relates to potential litigation and contains advice that is subject to solicitor-client privilege.

 

2.  City Council adopt the recommendations contained in the supplementary report  (July 20, 2018) from the Interim City Manager [AU13.11b], as follows:

 

1.  City Council direct that the confidential information contained in Confidential Attachment 1 the supplementary report  (July 20, 2018) from the Interim City Manager remain confidential in its entirety, as it contains advice which is subject to solicitor-client privilege. 

 

3.  City Council adopt the recommendations contained in the supplementary report (July 20, 2018) from the Fire Chief and General Manager, Toronto Fire Services [AU13.11d], as follows:

 

1. City Council direct the Fire Chief and General Manager, Toronto Fire Services to assign the additional resources concerning the TFS Fire Safety Quality Assurance Section, described as Option 1 in this report, and to adjust the 2018 and future-year Service Level standards as may be required; and that the approved 2018 TFS operating budget be increased by $392,863 to enable the addition of 11 FTEs, effective September 1, 2018, with one-time funding, from the tax rate stabilization reserve.

 

2. City Council request the Fire Chief and General Manager, Toronto Fire Services submit the 2019 annualized impact of $1,135,528, related to the addition of 11 FTEs, with the 2019 TFS budget submission for consideration by the City Manager and the Chief Financial Officer as part of the 2019 administrative review process.

 

3. City Council direct the Fire Chief and General Manager, Toronto Fire Services to report back to City Council in advance of the commencement of the 2020 budget process with respect to the analysis arising from the enhanced service levels as outlined in Option 1 and recommendations for further Inspection and/or Quality Assurance service level enhancements.

Vote (Amend Item (Additional)) Jul-25-2018 5:35 PM

Result: Carried Majority Required - AU13.11 - Fragedakis - motion 1
Total members that voted Yes: 32 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Jon Burnside, John Campbell, Christin Carmichael Greb, Gary Crawford, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, John Filion, Paula Fletcher, Mary Fragedakis, Mark Grimes, Jim Hart, Stephen Holyday, Jim Karygiannis, Mike Layton, Josh Matlow, Mary-Margaret McMahon, Joe Mihevc, Frances Nunziata (Chair), Cesar Palacio, James Pasternak, Gord Perks, Jaye Robinson, Neethan Shan, David Shiner, Michael Thompson, Lucy Troisi, Jonathan Tsao
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 13 Members that were absent are Josh Colle, Joe Cressy, Vincent Crisanti, Justin J. Di Ciano, Michael Ford, Michelle Holland, Norman Kelly, Giorgio Mammoliti, Miganoush Megardichian, Denzil Minnan-Wong, Anthony Perruzza, John Tory, Kristyn Wong-Tam

Motion to Adopt Item as Amended (Carried)

AU13.11 - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto

Decision Type:
ACTION
Status:
Amended
Wards:
All

Committee Recommendations

The Audit Committee recommends that:

 

1. City Council request the Deputy City Manager, Internal Corporate Services to create a governance process for any City-owned buildings, inclusive of standards, protocols and monitoring practices, that enables all Divisions, Agencies and Corporations:

 

a. to ensure compliance with all Ontario Fire Code regulations; and

 

b. to retain on file for a period of not less than two years all documentation supporting the City's compliance with the Ontario Fire Code.

 

2. City Council request the General Manager, Facilities Management, to:

 

a. bring all buildings in compliance with the Ontario Fire Code;

 

b. establish a process to monitor the completeness of fire inspections and monitor the rectification of all fire safety deficiencies for all City Divisions, Agencies and Corporations; and

 

c. report back to City Council annually on the level of compliance.

 

3. City Council request the General Manager, Facilities Management, to:

 

a. develop a training curriculum that encompasses all requirements of the Ontario Fire Code and be delivered to those delegated and/or designated responsibility by the City of Toronto to ensure compliance with the requirements of the Ontario Fire Code; and

 

b. keep records of this training consistent with the provisions of Division B, Clause 1.1.2.2 (a) of the Ontario Fire Code.

 

4. City Council request the General Manager, Facilities Management, to ensure all Fire Code-mandated reports submitted, including inspection reports and deficiency clearance reports, be in a format that is cross-referenced to invoices and facilitates the verification that work has been completed in accordance with the Ontario Fire Code.

 

5. City Council request that, for contracts involving life safety inspections, the General Manager, Facilities Management, work with Legal Services Division, Purchasing and Materials Management Division and Toronto Fire Services to:

 

a. update contracts to prohibit the submission of official legal documents, such as inspection reports, in a format that can be manipulated;

 

b. update contracts to ensure the Ontario Fire Code requirements are included;

 

c. update contracts with the appropriate terms and conditions, if not already in place, that allows for immediate suspension of a contract if there are significant performance issues with a life safety inspection contractor or if a contractor or person working for the contractor is charged and/or convicted for violations of the Fire Protection and Prevention Act and accompanying Regulations; and

 

d. develop and implement a life safety vendor training orientation and training package, to be completed prior to the commencement of service.

 

6. City Council request that, for contracts involving life safety inspections, the General Manager, Facilities Management, work with Legal Services Division and Purchasing and Materials Management Division to:

 

a. develop a protocol including establishing the appropriate qualifications, criteria, and / or background/security checks needed to be included in the contract to ensure that qualified and reputable persons are carrying-out the life safety inspections;

 

b. develop a protocol to identify the due diligence steps that will be undertaken by staff when the contractor arrives at the site to conduct inspections; and

 

c. develop a watch list to track life safety service providers that have significant performance issues, charges and/or convictions for violations of the Fire Protection and Prevention Act and accompanying Regulations.

 

7. City Council request the Toronto Fire Chief to work with the Ontario Fire Marshal to determine if such a watch list of those companies and persons charged or convicted of violations of the Fire Protection and Prevention Act and accompanying Regulations is needed province-wide because the life safety service providers may work with other municipalities and private buildings.

 

8. City Council support the Toronto Fire Chief in recommending to the Minister of Community Safety and Correctional Services to amend the Fire Protection and Prevention Act limitation period and discoverability language as required to lengthen the time to conduct complex investigations in support of fire safety.

 

9. City Council request the General Manager, Facilities Management, to develop and be accountable for the oversight of a model that:

 

a. treats the inspection of life safety systems in a building as a holistic system rather than using a fragmented approach;

 

b. uses a centralized model with Facilities Management Division as the overseer of life safety inspection services across all City-owned buildings;

 

c. standardizes inspection reports for life safety service providers and ensure they are comprehensive enough to comply with the Ontario Fire Code requirements

 

d. creates a centralized database to track the life safety inspection process;

 

e. creates a centralized complaints process regarding life safety service providers; and

 

f. clarifies roles and responsibilities of staff, life safety service providers and building owners.

 

10. City Council authorize the Toronto Fire Chief to assist the Ontario Fire Marshal, in any way possible, to address any Province-wide issues arising out of the report (June 28, 2018) from the Auditor General.

 

11. City Council request the Toronto Fire Chief to make recommendations to the appropriate Provincial authorities about the need to:

 

a. regulate the training and licensing for all life safety inspection services including emergency lighting and fire extinguishers, so that inspections of buildings is treated as a system; and

 

b. where a contractor is non-compliant, providing an avenue for delicensing, if necessary.

 

12. City Council request the General Manager of Facilities Management to design a quality control program to verify that those companies performing the inspections do so in accordance with the Ontario Fire Code.

 

13. City Council request the Toronto Fire Chief to make recommendations to the Ontario Fire Marshal to consider training and/or certification for building owners or the staff responsible on behalf of building owners so that they understand their roles and responsibilities under the Ontario Fire Code for the inspection of life safety systems, including sprinklers, emergency lighting and other fire suppression systems including the requirement for the keeping of records consistent with the provisions of Division B, Clause 1.1.2.2 (a) of the Ontario Fire Code.

 

14. City Council request Toronto Fire Chief to make recommendations to the Ontario Fire Marshal related to a brochure available in all mediums that outlines the building owner's responsibilities, and that the brochure be available on Toronto Fire Service's website and distributed as a quick reference to all building owners as part of the approval of their fire safety plans.

 

15. City Council request the Toronto Fire Chief to make a recommendation to the Ontario Fire Marshal that a Technical Advisory Committee be struck to review the system-wide issues raised in this report and make recommendations to the Minister of Community Safety and Correctional Services.

 

16. City Council direct the City Manager to advise all staff to report any allegations of potential wrongdoing involving City resources, including potential wrongdoing against the City by third-party vendors, to the Auditor General for further investigation.

 

17. City Council direct the City Manager to report to Council with advice about an obligation, in addition to those under the City of Toronto Act and the Toronto Public Service By-law, requiring City employees to report to the Auditor General allegations of wrongdoing by third parties.

 

18.City Council grant authority to the Deputy City Manager, Internal Corporate Services to negotiate and enter into a non-competitive agreement(s) for up to $650,000 ($661,440 net of HST recoveries) with third-party vendor(s) for services to conduct a fire and life safety audit of City facilities and report back to the appropriate Committee on findings, including required corrective actions. 
  

19.  City Council grant authority to the Deputy City Manager, Internal Corporate Services to terminate any contracts with vendors providing fire and life safety services, in accordance with the contract terms and conditions, if the audit finds that these vendors have failed to provide required documentation on a regular basis for services provided at City sites or any other irregularities uncovered through the audit; if charges are brought about by Toronto Fire Services, the Office of the Fire Marshall or any other jurisdiction, to be put on a watch list; and grant authority to the Chief Purchasing Officer, in consultation with the General Manager, Facilities Management and the City Solicitor, to suspend those vendors from being awarded future procurements for a period of up to 5 years.
 

20.  City Council direct the Deputy City Manager, Internal Corporate Services to complete the implementation of the recommendations from the 2005 Maintenance and Administrative Controls Review and provide a progress update to Council in Q1 2019.
 

21.  City Council increase the Facilities, Real Estate, Environment & Energy (FREEE) complement by adding an additional 5.0 temporary FTEs for a six month period commencing in July 2018, to resource the Fire and Life Safety Task Force, with funding made available from within the 2018 Approved Operating Budget for FREEE.
 

22. City Council amend the 2018 Facilities, Real Estate, Environment & Energy (FREEE) Capital Budget, to create a new sub-project called "Fire and Life Safety Audits" project that will fund the non-competitive third party agreement(s) for services to conduct a fire and life safety audits, with a total project cost of $0.661 million and cash flows of $0.661 million in 2018, with funding reallocated from previously approved emergency capital project (CCA244-16) included in FREEE's 2018-2027 Approved Capital Plan.
 

23.  City Council direct the Fire Chief, Toronto Fire Services, to report through the 2019 budget process on any operational and financial implications of increasing the number of inspections completed by Toronto Fire Services for the purposes of assessing fire safety and compliance with the Fire Code in buildings and structures within the municipality.

Decision Advice and Other Information

The Audit Committee:


1.  Requested the Deputy City Manager, Internal Corporate Services, to report directly to City Council for its July 23, 2018 meeting with the inventory of the fire code compliance information of City buildings, and to report on the proposed order in which the audit of City buildings will be completed, i.e. by vendor and/or critical infrastructure.
 

2.  Requested the Fire Chief, Toronto Fire Services, to report directly to City Council for its July 23, 2018 meeting outlining the operational and financial implications of increasing the number of inspections to be completed by Toronto Fire Services during 2018, and any associated budget adjustment required to the 2018 Council Approved Toronto Fire Services Operating budget, for the purposes of assessing fire safety and compliance with the Fire Code in buildings and structures within the municipality.  The report should include different levels of enhanced annual inspection services for Council's consideration.

 

3.  Confirmed instructions to staff in closed session, in requesting the City Manager and the City Solicitor to report directly to City Council on July 23, 2018.

 

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 or one of its agencies and corporations;

 

- personal matters about identifiable individual(s), including City or local board employees;

 

- labour relations or employee negotiations; and

 

- receiving advice that is subject to solicitor-client privilege.

 

Beverly Romeo-Beehler, Auditor General, and Josie Scioli, Deputy City Manager, Internal Corporate Services, gave public presentations to the Audit Committee on this Item.

Origin

(June 28, 2018) Report from the Auditor General

Summary

The Auditor General's Fraud and Waste Hotline received a complaint about a vendor that has had many contracts with the City. These contracts were to perform inspections and repairs of life safety systems such as emergency lighting, fire alarms, sprinkler systems and fire extinguishers. The vendor also performs life safety inspections for private buildings.

 

The complainant alleged that the vendor routinely submitted inspection reports and invoices for work that was not done, forged signatures of their own staff, operated as multiple companies, and used false identities as signatories to contracts.

 

This report details the Auditor General's investigation findings into this particular vendor and makes 17 recommendations.

 

The findings in this report brings awareness for the requirement, under the Ontario Fire Code, to have proper documentation for life safety inspection services. It calls for management to be diligent in following up on issues that occur with vendors and it highlights the risks of not conducting proper due diligence when hiring life safety inspection vendors.

 

It should be noted that the findings in this report do not necessarily mean that City buildings are unsafe. In addition, because there are some third-party vendors we are concerned about, it does not mean that all vendors conducting life safety inspections are problematic.

Background Information

(June 28, 2018) Report from the Auditor General - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-117986.pdf
Investigation at a Glance: Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118386.pdf
Revised Attachment 1: Auditor General's Report - Raising the Alarm: Fraud Investigation of a Vendor Providing Life Safety Inspection Services to the City of Toronto - revised on August 14, 2018
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118387.pdf
Presentation Material submitted by the Auditor General
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118726.pdf
Presentation Material submitted by the Deputy City Manager, Internal Corporate Services
https://www.toronto.ca/legdocs/mmis/2018/au/bgrd/backgroundfile-118727.pdf

Communications

(July 6, 2018) Letter from Mayor John Tory (AU.New.AU13.11.1)
https://www.toronto.ca/legdocs/mmis/2018/au/comm/communicationfile-86098.pdf

Motions

Motion to Meet in Closed Session moved by Councillor Josh Matlow (Carried)

3:18 p.m. - That the Audit Committee recess its public session and meet in closed session to consider confidential information on this Item as it relates to:

 

- the security of property belonging to the City or one of its agencies and corporations;

 

- personal matters about identifiable individual(s), including City or local board employees;

 

- labour relations or employee negotiations; and

 

- receiving advice that is subject to solicitor-client privilege.

 

The Audit Committee recessed its public session and met in closed session to consider the above matter.

 

The Audit Committee reconvened in public session at 3:57 p.m.  Councillor Holyday took the Chair and advised that the Committee had completed its closed session consideration of confidential information related to this Item.  The Audit Committee issued confidential instructions to staff in closed session.  The Audit Committee would now proceed with the public debate on this Item.


1 - Motion to Amend Item (Additional) moved by Councillor Stephen Holyday (Carried)

That the Audit Committee recommend that:

 

1.  City Council grant authority to the Deputy City Manager, Internal Corporate Services to negotiate and enter into a non-competitive agreement(s) for up to $650,000 ($661,440 net of HST recoveries) with third-party vendor(s) for services to conduct a fire and life safety audit of City facilities and report back to the appropriate Committee on findings, including required corrective actions.
 

2.  City Council grant authority to the Deputy City Manager, Internal Corporate Services to terminate any contracts with vendors providing fire and life safety services, in accordance with the contract terms and conditions, if the audit finds that these vendors have failed to provide required documentation on a regular basis for services provided at City sites or any other irregularities uncovered through the audit; if charges are brought about by Toronto Fire Services, the Office of the Fire Marshall or any other jurisdiction, to be put on a watch list; and grant authority to the Chief Purchasing Officer, in consultation with the General Manager, Facilities Management and the City Solicitor, to suspend those vendors from being awarded future procurements for a period of up to 5 years.
 

3.  City Council direct the Deputy City Manager, Internal Corporate Services to complete the implementation of the recommendations from the 2005 Maintenance and Administrative Controls Review and provide a progress update to Council in Q1 2019.
 

4.  City Council increase the Facilities, Real Estate, Environment & Energy (FREEE) complement by adding an additional 5.0 temporary FTEs for a six month period commencing in July 2018, to resource the Fire and Life Safety Task Force, with funding made available from within the 2018 Approved Operating Budget for FREEE.
 

5. City Council amend the 2018 Facilities, Real Estate, Environment & Energy (FREEE) Capital Budget, to create a new sub-project called "Fire and Life Safety Audits" project that will fund the non-competitive third party agreement(s) for services to conduct a fire and life safety audits, with a total project cost of $0.661 million and cash flows of $0.661 million in 2018, with funding reallocated from previously approved emergency capital project (CCA244-16) included in FREEE's 2018-2027 Approved Capital Plan.
 

6.  City Council direct the Fire Chief, Toronto Fire Services, to report through the 2019 budget process on any operational and financial implications of increasing the number of inspections completed by Toronto Fire Services for the purposes of assessing fire safety and compliance with the Fire Code in buildings and structures within the municipality.
 

7.  Audit Committee request the Deputy City Manager, Internal Corporate Services, to report directly to City Council for its July 23, 2018 meeting with the inventory of the fire code compliance information of City buildings, and to report on the proposed order in which the audit of City buildings will be completed, i.e. by vendor and/or critical infrastructure.
 

8.  Audit Committee request the Fire Chief, Toronto Fire Services, to report directly to City Council for its July 23, 2018 meeting outlining the operational and financial implications of increasing the number of inspections to be completed by Toronto Fire Services during 2018, and any associated budget adjustment required to the 2018 Council Approved Toronto Fire Services Operating budget, for the purposes of assessing fire safety and compliance with the Fire Code in buildings and structures within the municipality.  The report should include different levels of enhanced annual inspection services for Council's consideration.

Vote (Amend Item (Additional)) Jul-13-2018

Result: Carried Majority Required - AU13.11 - Holyday - motion 1
Total members that voted Yes: 4 Members that voted Yes are Michael Ford, Jim Hart, Stephen Holyday (Chair), Josh Matlow
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 2 Members that were absent are Christin Carmichael Greb, Janet Davis

2 - Motion to Amend Item (Additional) (Carried)

That the Audit Committee confirm instructions to staff in closed session, in requesting the City Manager and the City Solicitor to report directly to City Council on July 23, 2018.


Motion to Adopt Item as Amended (Carried)

Vote (Adopt Item as Amended) Jul-13-2018

Result: Carried Majority Required - AU13.11 - Adopt Item, as amended
Total members that voted Yes: 4 Members that voted Yes are Michael Ford, Jim Hart, Stephen Holyday (Chair), Josh Matlow
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 2 Members that were absent are Christin Carmichael Greb, Janet Davis
Source: Toronto City Clerk at www.toronto.ca/council