Item - 2018.AU13.11

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.

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.

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.