Item - 2023.AU2.9

The Audit Committee recommends that:  

1. City Council request the Chief Building Official and Executive Director, Toronto Building Division, to consider developing and implementing a risk-based approach to its processes, including inspections, and assignment of more experienced staff to higher-risk projects.

2. City Council request the Chief Building Official and Executive Director, Toronto Building Division, to enhance and strengthen building code and enforcement training for both plan review and inspection staff, including key aspects that must be reviewed when a firewall is included as part of the building design and construction.

3. City Council request the Chief Building Official and Executive Director, Toronto Building Division, to implement controls, including training and supervisory oversight, to ensure that:

a. inspectors pass inspection stages in order; and

b. when exceptions are required to passing inspections in order and are approved by a supervisor, clearly document the reasons for moving on to subsequent inspection stages.

4. City Council request the Chief Building Official and Executive Director, Toronto Building Division, to provide training and supervisory oversight for inspectors on when to set a time limit on requested reports from professionals, as well as reasonable expected time limits.

5. City Council request the Chief Technology Officer, in consultation with the Chief Building Official and Executive Director, Toronto Building Division, to ensure that any necessary enhancements to system functionality and data fields are implemented to support better tracking of deficiencies, and also allow for builders/permit holders to access the status of their inspections, including any deficiencies that must be fixed before being passed to the next stage.

6. City Council request the Chief Building Official and Executive Director, Toronto Building Division, to implement policies, procedures and training to ensure:

a. inspectors retain all relevant plans and drawings for a project on file;

b. inspectors clearly document which plans they used for their inspection work; and

c. inspectors use the City-approved plans for their inspection work, and if also using other plans such as engineered wood drawings from a manufacturer, that they match them to the City-approved plans.

Tara Anderson, Auditor General, gave a presentation on Investigation into Allegations of Wrongdoing Regarding Building Inspections of 2 Houses.

This report summarizes an investigation into allegations of wrongdoing related to the construction of two large houses by one builder in Toronto. The complaint came to the Auditor General through the Chief Building Official (CBO) on April 20, 2021.

The complainant alleged that the builder was not constructing the houses in accordance with the permits approved by Toronto Building Division (TB) and that the builder was making changes to the houses that were not in compliance with the Ontario Building Code (OBC or Building Code or the Code). The complainant said it was possible that  inspectors were not catching these changes and was concerned that the houses, once complete, would not be safe.

In addition, the complainant also alleged that the builder was fraudulently using the project architect's credentials to make changes. The last allegation was that the builder had connections at the City of Toronto who were in some way helping the builder to bypass the regular Toronto Building plan review and / or inspection process.

The Auditor General's Office took these allegations seriously and conducted a review of the building files for the two houses, conducted more than a dozen interviews, contracted a structural forensics engineer, reviewed hundreds of documents, and conducted data analysis on building inspection information.

Regarding the allegation of the builder not constructing the houses in accordance with the approved permits, we found that the builder made changes on-site during construction at the two houses without having the changes reviewed and subsequently approved by Toronto Building staff.

Builders can make changes to the buildings they are constructing, but the Building Code Act (BCA) states that "material" changes cannot be made without approval from the Chief Building Official. A material change is not defined in the Building Code Act, but it is generally a larger or more significant change that would require approval from Toronto Building before construction occurs.

Throughout this investigation, senior inspectors, the Chief Building Official and the structural forensics consulting engineer we contracted confirmed that most of the changes made to the houses in this investigation would be considered “material”.

For this file, we determined the following for each of the allegations:

- Allegation 1 was substantiated
- We were unable to determine a conclusion for Allegation 2 due to challenges in obtaining information
- Allegation 3 was unsubstantiated
- Allegation 4 was unsubstantiated
 

More details about each allegation and our conclusions are included in the report.

Further, while conducting this investigation, the Auditor General identified several other issues. These issues are similar to some of the findings from our recent performance audit report entitled “Building Better Outcomes: Audit of Toronto Building’s Inspection Function” (the audit was being conducted at the same time as this investigation, was dated January 27, 2023 and was presented at the February 13, 2023 Audit Committee meeting). In parts of this report, we refer to our audit report for details and relevant recommendations (the audit report recommendations are also outlined in Appendix 5). The potentially wider-ranging issues we found in this investigation included:

- A risk-based approach to inspections is not used
- The importance of using powers to enforce compliance
- Material and note-worthy changes were not identified through the inspection process
- The inspection order is not always logical
- The City-approved plans are not always used for inspecting
 

Further details about each of these other issues are included in the report, along with recommendations for the Division.