M I N U T E S ASC-2003-2
The Audit Subcommittee met on May 8, 2003, at 2:33 p.m. in the Council Chambers, Regional Administrative Headquarters, 10 Peel Centre Dr., Brampton.
|Members Present:||E. Kolb, G. Miles, P. Mullin, R. Whitehead|
R. Maloney, Chief Administrative Officer; D. Labrecque, Treasurer and Commissioner of Finance; L. Hawes, Director, Internal Audit; J. MacCrae, Director of Finance, Housing and Property; I. Murray, Engagement Partner, KPMG; K. Travers, Audit Senior Manager, KPMG; E. Corazzola, Legislative Co-ordinator
Councillor Whitehead assumed the Chair.
1. DECLARATIONS OF CONFLICTS OF INTEREST
2. APPROVAL OF AGENDA
That the agenda for May 8, 2003 Audit Subcommittee meeting be approved.
a) Region of Peel Audited 2002 Consolidated Financial Statement
Ian Murray, Engagement Partner and Kevin Travers, Audit Senior Manager, KPMG provided an overview of the audited financial report to the Audit Subcommittee, highlighting key responsibilities in external reporting.
Councillor Mullin, expressed concern about the funding cap required by the Fairness for Taxpayers Act, and suggested that it may become difficult to finance. She questioned how the Region may approach the variance and commented that this could become a taxpayer issue until such time as the Province takes action with respect to phasing out the requirement for capping.
Dan Labrecque, Treasurer and Commissioner of Finance responded by advising that he is continuing to work with the area municipality Treasurers in consideration of this issue. He explained that each year the variance is different and advised that the primary tool being considered for use in addressing this difference is to amend tax ratios, effectively allocating any shortfall to the other classes. He stated that, once decided upon, their proposals will be brought forward to each area municipal council for consideration.
Councillor Mullin requested clarification of a notation in the report that the Province had assumed of a portion of the debt.
Kevin Travers, Audit Senior Manager, KPMG explained that it has been determined by the Province that the legal title of the debentures for Peel Regional Housing Corporation remain a Provincial responsibility as funding from the Federal government continues to flow through the Province to the Region for these types of housing providers.
Councillor Mullin inquired as to whether a final figure was available for the 2002 GTA Pooling. She suggested that an update should come forward at either the next Audit Subcommittee or in the next finance report.
Dan Labrecque, Treasurer and Commissioner of Finance advised that the figure
was not presently available. He stated, however, that the recently received
adjustment for 2001 specified a further adjustment of 2 million dollars in connection
with Ontario Works. He suggested that current estimations for 2002 indicate
a surplus of approximately 1 million dollars. He advised that is was his intention
to include this information in the next tri-annual update anticipated for June.
b) 2002 External Audit Management Letter
Dan Labrecque, Treasurer and Commissioner of Finance advised that there are only three items of note this year. These items have been reviewed with the auditors and a management response has been set out in support of the directions being taken.
Councillor Mullin expressed concern with respect to the negative police vacation balances and questioned how long this has been the practice of the police. She questioned the liability and exposure/risk to the Region in this regard. She further inquired whether there was a similar issue within the Region.
Dan Labrecque, Treasurer and Commissioner of Finance, advised that he has met with police staff and was advised that action has been taken to alter this practice.
Roger Maloney, Chief Administrative Officer, commented that it was more common
for Regional staff to accumulate excessive vacation rather than assuming a negative
That further information be submitted at the next Audit Subcommittee meeting outlining the Region of Peel's practice and experience in respect to the provision of vacation time and commenting on the Region's liability and exposure as a result of the findings in respect to negative police vacation balances.
Councillor Whitehead questioned whether significant contracts were vetted through the Legal Department as well as the Finance department and whether this was included in the Region's protocol.
Dan Labrecque, advised that, in the majority of cases with which he has been
involved, the legal representative was a critical member of the review team.
He will confirm whether this practice was part of the Region's protocol.
c) 2003 Status of Management Action Plans
Roger Maloney, Chief Administrative Officer, commented that Larry Hawes, Director, Internal Audit, has been integral in assuming due diligence in following through on Audit Report recommendations. He noted that this authority has enabled him to close the loop in audit reporting.
Larry Hawes, Director, Internal Audit summarized the report and noted the support of the Chief Administrative Officer. He advised that the principal finding of the report illustrated that Peel management are committed to continuous improvement and noted that approximately 70% of the recommendations had already been acted upon.
d) 2002 Internal Audit Work Plan Budget vs. Actual Time
Councillor Mullin requested elaboration on what constituted "more issues than expected" in respect to Engineering and Infrastructure Planning and Property Services.
Larry Hawes, Director, Internal Audit responded by advising that these issues were primarily a result of the complexity of the subdivision development process. He stated that work has been completed in this area and that a report would be brought forward at the next Audit Subcommittee meeting delivering the results of that audit.
Councillor Whitehead questioned whether additional resources were being sought or whether time estimations had been altered to address areas where estimated time frames were not met.
Larry Hawes, Director, Internal Audit responded by advising that they have
moved those projects ahead and that he believed additional staffing was being
5. SCHEDULE OF FUTURE MEETINGS
a) Internal Audits in Progress (Oral) Remarks by Larry Hawes, Director, Internal Audit
Larry Hawes, Director, Internal Audit advised that a response to Council Resolution 2003-101 will be brought forward at the next meeting. In this regard he advised that he, together with the Dan Labrecque, Treasurer and Commissioner of Finance and Ian Murray, Engagement Partner, KPMG, will make a presentation on the operations of the Audit Subcommittee with a request for approval of an update on the Terms of Reference. Further in relation to this issue, a request will be made for the Audit Subcommittee to approve a Charter for Internal Audit.
In addition, he stated that reports on the Engineering and Infrastructure Planning Audit as well as Water Quality Sampling and Analysis are intended to be brought forward.
He also advised of a request by Credit Valley Conservation (CVC) for a review
of their administrative operations.
6. OTHER BUSINESS
The meeting adjourned at 3:03 p.m.