Item - 2023.AU2.8

The Audit Committee recommends that:

1. City Council direct that the confidential information contained in Confidential Attachments 1 and 2 to the report (June 26, 2023) from the Auditor General remain confidential in its entirety, as it involves the security of property belonging to the City or local boards.

This report provides the results of our follow-up of selected recommendations for the first half of 2023, and a high-level summary of outstanding recommendations for all City divisions and its agencies and corporations. Since inception (January 1999) to May 31, 2023, the Auditor General has verified 83[1] per cent of recommendations as fully implemented or no longer applicable.

The Auditor General follows up on the status of outstanding recommendations from her audits, investigations, and other reports on an ongoing basis to ensure management has taken adequate action. Implementing the Auditor General’s recommendations lead to various benefits, such as, improved controls and more effective and efficient delivery of programs and services for the City. The resulting financial and non-financial impacts are reported in the Auditor General’s Annual Report.

As of February 28, 2023, there were 694 outstanding recommendations[2] and management reported 356 of them as fully implemented. We selected 128 recommendations management reported as fully implemented for review. Our follow-up focused on the following divisions that had a larger number of high priority recommendations:

·       Shelter, Support and Housing Administration / Housing Secretariat

·       Parks Forestry and Recreation

·       Transportation Services

·       Corporate Real Estate Management

·       Toronto Fire Services

We concluded that of the 128 recommendations, 83 are fully implemented, 38 are not fully implemented, and 7 are no longer applicable (Figure 1). These recommendations are listed in Attachment 1.
 

(See Figure 1 titled "Status of Outstanding Auditor General Recommendations"),

in the Summary section of the report dated June 26, 2023 from the Auditor General

Recommendations which management has reported as fully implemented but are not yet verified by the Auditor General are listed in Attachment 2 and Confidential Attachment 1. We will continue to review these recommendations in future follow-up cycles focusing mainly on high-priority recommendations in order to make the most efficient use of our resources.

Recommendations that have a significant potential for savings, mitigate health and safety risks, or have been outstanding for more than five years are classified as high priority. Delays in implementing these recommendations results in the City missing out on the intended improvements in controls and more effective and efficient delivery of programs and services at the City. A total of 191 high priority recommendations that are not fully implemented are listed in Attachment 3 and Confidential Attachment 2. Management needs to expedite their implementation as more than 100 high priority recommendations have been outstanding for over five years (Figure 2).

(See Figure 2 titled "Aging of High Priority Not Fully Implemented Recommendations"),

in the Summary section of the report dated June 26, 2023 from the Auditor General

Management actions to implement recommendations have resulted in various benefits to the City. These include service efficiencies, improving controls over contracted services, as well as preventing and correcting overpaid subsidy funds. In some areas we reviewed, further action is required to fully achieve the intended benefits of the recommendations. Noteworthy results from our follow-up are discussed in detail in the Comments section below.

[1] The actual implementation rate at the date of this report may vary from this rate, when taking into account the recommendations reported by management as fully implemented that the Auditor General has not yet verified. In addition, reports published after the June 6, 2022 Audit Committee meeting to the current date are also not yet reflected in these statistics.
[2] Reports presented to the Audit Committee after the June 6, 2022 meeting are excluded from this statistic as we typically provide management an appropriate amount of time before commencing the follow-up.