Item - 2019.AU4.10

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 direct the City Manager to report to the Audit Committee in Q1 2020 with an update on the implementation of all outstanding audit recommendations for the City Manager's Office, all City divisions within Community and Social Services, Corporate Services, Finance and Treasury Services, and Infrastructure and Development Services, and the City's agencies and corporations, with the report to include detailed plans and timelines for implementation of all recommendations not yet fully implemented.

2. City Council receive the report (October 10, 2019) from the Auditor General for information.

This consolidated year-end report summarizes the 2019 audit recommendations follow-up results for all City divisions, the City Manager's Office, Agencies and Corporations, and recommendations issued by the Auditor General's Forensic Unit.

The number of audit recommendations implemented by management over the past year was low. The City divisions, the City Manager's Office and Agencies and Corporations implemented 18 per cent of the outstanding recommendations during this year's follow-up process.

A total of 392 recommendations were included in this follow-up review and we verified that 71 recommendations have been fully implemented, and 10 recommendations are no longer applicable. There are 311 recommendations that remain not fully implemented.

During the current follow-up process management reported that 172 out of 392 recommendations have been implemented. However, based on our review, we determined that 101 (59 per cent) of those recommendations have not been fully implemented because the steps undertaken or the extent of the improvement did not fully address the issue or the intent of the recommendation or management was not able to provide sufficient evidence of actions taken. A significant amount of work is required to verify implementation of recommendations, and in circumstances where recommendations are not implemented, it is a waste of audit resources.

Recommendations implemented in 2019, resulted in savings and revenue increases.  As a result of management actions, the City achieved approximately $3.1 million in one time savings and approximately $2.8 million in annual recurring savings.  Details of savings identified during the current follow up cycle are provided in Attachment 1.

Continued efforts to implement outstanding recommendations will provide additional financial and non-financial benefits to the City and its Agencies and Corporations. These benefits include cost savings, additional revenue, enhanced service delivery, and improved controls.