M I N U T E S ASC-2005-5
The Audit Subcommittee met on October 6, 2005, at 8:35 a.m. in the Council Chamber, Regional Administrative Headquarters, 10 Peel Centre Dr., Brampton.
|Members Present:||N. Iannicca, E. Kolb, G. Miles, R. Paterak, N. Stewart|
|Also Present:||D. Labrecque, Treasurer and Commissioner of Finance; M. Zamojc, Commissioner of Public Works; L. Nashman, Commissioner of People, Information and Technology; S. Hewitt, Director, Business and Information Services, Public Works; M. Schiller, Director, Water & Wastewater Treatment, I. Murray, KPMG; K. Travers, KPMG; B. Wilson, Director, Internal Audit; J. Payne, Legislative Co-ordinator, Clerk's|
J. Payne, Legislative Co-ordinator, presided.
1. ELECTION OF CHAIR AND VICE-CHAIR
a) Election of the Audit Subcommittee Chair
That Councillor N. Stewart be appointed Chair of the Audit Subcommittee for a term ending November 30, 2006 or until a successor is appointed.
b) Election of the Audit Subcommittee Vice Chair
That Councillor N. Iannicca be appointed Vice Chair of the Audit Subcommittee for a term ending November 30, 2006 or until a successor is appointed.
Councillor N. Stewart assumed the Chair.
2. DECLARATIONS OF CONFLICTS OF INTEREST
3. APPROVAL OF AGENDA
That the agenda for the October 6, 2005, Audit Subcommittee meeting be approved.
a) Internal Audit Accomplishments, Challenges and Direction for 2006 (Oral)
Presentation by Beate Wilson, Director, Internal Audit
Beate Wilson, Director, Internal Audit presented to the members of the Audit Subcommittee, highlights of recent accomplishments of the Internal Audit division as follows:
- The 2004 Corporate Wide Risk Assessment;
- The 2005 to 2007 Risk Based Work Plan;
- Enhancement of mutually valuable relationship with Peel Regional Police;
- Meeting increasing requests from management and Councillors for Audit services
- Internal Audit Procedures Manual;
- Audit Subcommittee Oversight Manual
- Internal Audit Charter
- Updated Terms of Reference for the Audit Subcommittee;
- Quality Assurance Accreditation; and
- Recognition of Commitment (ROC) Award.
Beate Wilson then addressed some of the issues facing the Internal Audit division for 2006 and beyond including:
- Maintaining the current level of excellence;
- Pursuing continuous improvement initiatives;
- Developing and motivating staff;
- Enhancing audit program and coverage;
- Meeting the growing demand for Internal Audit services;
- Measuring and reporting on quality of audit results;
- Increasing audit frequency of high and medium risk areas;
- Delivering 12 audit reports annually (currently 8 reports are presented annually) to ensure timely review of all high and medium risk areas; and
- Completing audit projects from the Peel Regional Police work plan in a timelier manner.
In light of the challenges set out above, Beate Wilson sought input from the members of the Subcommittee regarding a request for the addition of one staff complement (Full Time Equivalent - FTE) as part of the 2006 budget submission.
Councillor Miles suggested that as part of the service review process, the Audit division should present comparative values from other municipal Internal Audit groups to aid Council in making its decision regarding the request. Dan Labrecque, Treasurer and Commissioner of Finance noted that the suggested addition of one FTE for the Internal Audit division would be funded from the existing Finance departmental budget base.
Audit Subcommittee Chair Stewart noted that there was an Acting Manager in place during 2004 and the first two months of 2005 and inquired if this was necessitated by succession planning or if it was a response to workload issues. Dan Labrecque responded that at the time Beate Wilson was assigned to a number of key projects while the Acting Manager assumed responsibility for ongoing scheduled audits and Internal Audit division staff. He explained that the proposed addition of a second manager (FTE) in the Internal Audit division would allow for a divisional restructuring and that further details, including a draft organizational chart, would be brought to a future service review meeting for consideration.
a) Employee Benefits Review
Laura Nashman, Commissioner of People, Information and Technology expressed her thanks to Beate Wilson and staff of the Internal Audit division for the recent audit and report regarding the employee benefits program at the Region of Peel. She indicated that she was pleased with the report findings, that steps have been taken to address the report findings and that the process had proven to be very beneficial.
Councillor Paterak noted that the Employee Benefits report and the Water and Waste Water Capital Project Management report identified issues with the tracking of the Federal Goods and Services Tax (GST). He queried the Treasurer and Commissioner of Finance as to the administrative costs of tracking GST and processing refunds with the federal government. He further asked if action should be taken to request that the federal government streamline the current GST rebate process. Dan Labrecque confirmed that municipalities across the country are encountering similar GST rebate tracking issues and that efforts are being made to communicate municipal concerns to the federal government.
Councillor Miles asked for a status update on the "Flexible Benefits" options under review for Regional staff. Laura Nashman responded that there is currently a complete review of the Regional Employees Benefits Program underway and that area municipal counter parts are receiving regular updates. She further added that when the review is completed the findings will be reported to Regional Council. Currently, Regional employees have the benefit of a "Health Spending Account" which provides considerable flexibility to employees to cover certain defined expenditures that are allowable under provincial and federal regulations.
b) Review of Water and Wastewater Capital Project Management
Mitch Zamojc, Commissioner of Public Works thanked the Audit team for their hard work in recognizing current departmental strengths and for the identification of areas where improvements could be made.
Shaun Hewitt, Director, Business and Information Services, Public Works presented an overview of the response by the Public Works department to the 19 recommendations set out in the report to the Audit Subcommittee titled "Review of Water and Wastewater Capital Projects Management". Key responses are as follows:
- Review of expenditure tracking procedures;
- Documentation of expenditure tracking procedures;
- Review of contract payment, specifically related to GST and PST procedures;
- Complete invoicing of internal charges;
- Review of construction contract process to identify and implement efficiencies;
- Adoption of project management methodologies;
- Implementation of routine post project completion reviews; and
- Continued adoption of improvements identified in the 2004 External Management letter from KPMG.
Shaun Hewitt reiterated the remarks of the Commissioner of Public Works recognizing the work of the Audit team in the completion of the report. He further acknowledged the contributions of the Financial Services division in the department of Finance during the audit process.
Chair Kolb inquired if key project documents have been evaluated to mitigate potential risk to the Region. Mitch Zamojc responded that all contractual documents have undergone a complete review and many documents have been revised and/or consolidated in an effort to reduce risk to the Corporation.
Chair Kolb enquired as to what steps had been taken to ensure that insurance certificates remain valid. Beate Wilson noted that the Risk Management section of the Finance department is now working with Public Works to ensure certificates are not allowed to lapse through the creation of procedures and electronic tracking tools. Chair Kolb emphasised that any procedure developed must ensure that any lapses in risk coverage are reported at a senior level. Dan Labrecque confirmed that the procedure currently being developed will identify any issues directly to the Treasurer. Mitch Zamojc remarked that this was a positive opportunity for Public Works to centralize processes and create responsive procedures.
Councillor Miles expressed concern that the audit report contained 19 recommendations. She requested that action to address these recommendations be undertaken by Public Works immediately and that the Audit division remain very vigilant during the follow up Audit report process. She further requested that a separate report be prepared regarding issues related to GST and PST from a corporate wide perspective. Beate Wilson assured the members of the Committee that the Region has accounted for all potential GST rebates. A corporate wide committee has already been struck to address the issues of GST rebates and PST payments, purposed with improving staff knowledge regarding the GST rebate and other commodity tax processes.
Councillor Miles questioned if there was enough resources within Public Works to manage the scope and the scale of the projects currently underway in the areas of water and wastewater. Beate Wilson indicated she could not answer this question, acknowledging that the Business Unit in Public Works was responsible for addressing many of the identified recommendations.
7. SCHEDULE OF FUTURE MEETINGS
8. OTHER BUSINESS
The meeting adjourned at 9:25 a.m.