M I N U T E S ASC-2007-5
The Audit Subcommittee met on October 4, 2007, at 8:31 a.m. in the Council Chamber, Regional Administrative Headquarters, 10 Peel Centre Drive, Brampton.
|Members Present:||C. Corbasson; E. Kolb*; R. Paterak; R. Whitehead|
|Members Absent:||G. Miles, due to other municipal business|
|Also Present:||D. Szwarc, Chief Administrative Officer; R.K. Gillespie, Commissioner of Corporate Services and Regional Solicitor; D. Labrecque, Chief Financial Officer; L. Nashman, Commissioner of Employee and Business Services; K. Ward, Commissioner of Human Services and General Manager, Peel Living; M. Zamojc, Commissioner of Environment, Transportation and Planning; R. Wiseman, Chief Information Officer; B. Wilson, Director, Internal Audit; K. Travers, Associate Partner, KPMG; J. Payne, Committee Clerk|
Chaired by Councillor R. Whitehead
1. DECLARATIONS OF CONFLICTS OF INTEREST - Nil
2. APPROVAL OF AGENDA
That the agenda for the October 4, 2007 Audit Subcommittee meeting be approved.
3. DELEGATIONS/PRESENTATIONS - Nil
a) Engineering Technical Services Inspection Process Review
Presentation by Shaun Hewitt, Director, Operations Support, Environment, Transportation and Planning Services
Shaun Hewitt, Director, Operations Support, Environment, Transportation and Planning Services (ETPS) advised that management had requested the review of the Engineering Technical Services inspection process by Internal Audit. He indicated that the review findings have validated processes and controls that have previously been put in place by management. The report did identify areas for further enhancement as it relates to the management of inspector overtime hours, mileage costs, data management, and development of skills inventory and training program. Action plans have been developed for each of the identified areas of improvement, which Shaun Hewitt indicated, will result in further process improvements resulting in additional program efficiencies.
Councillor Paterak asked if the Region of Peel is utilizing alternatives such as time-in-lieu to manage overtime and if there was a specific time-in-lieu policy. Shaun Hewitt responded that the Region of Peel does have a time-in-lieu policy for management that sets time banked ceilings but he was not aware if that policy applied to field staff.
Councillor Paterak inquired if staff had reviewed the audit findings regarding the use of cell phones by Regional staff to determine if similar improvements in other program areas could be realized. Shaun Hewitt noted that the findings spoke specifically to better use of alternative forms of technologies for communication such as text messaging by inspectors in the Engineering Technical Services section.
Chair Kolb arrived at 8:40 a.m.
b) Information and Technology Services Asset Management Audit
Beate Wilson, Director, Internal Audit explained that the Information and Technology Services (I&T Services) Asset Management Audit was the second phase of a three part review of I&T Services. The findings showed that appropriate management of information technology assets is in place for a wide range of equipment and devices utilized by the Region. Areas for improvement were identified as part of the audit findings and management is working to implement both process and control improvements.
Laura Nashman, Commissioner of Employee and Business Services thanked Internal Audit staff for their work on this report. She also noted that I&T Services has developed a plan with the support of Internal Audit to action the findings in the report.
c) Contract Audit of the 10 Peel Expansion Project
Beate Wilson explained that the audit of the 10 Peel Centre Drive Expansion Project was the second in what will be a series of ongoing updates to the Audit Subcommittee through to the completion of the project. The review looked at the period from construction commencement through to June 2007 and examined various aspects of the project including risk management, contractual terms, contractor payments and change requests. The audit found no exceptions to the contract, that all supporting documentation was available, that all necessary approvals were in place and that all payments had been made. The audit findings had identified three improvements related to the management of project timelines and the 10 Peel Expansion Project team has implemented all three timing improvements.
Chair Kolb asked if there were any additional costs thus far in the project. Julie Pomerleau, 10 PEP Project Integration Manager, responded that the project budget is $56.5 million which includes a $2.5 million contingency fund. As of July 31, 2007, approximately 25 per cent of the total project budget has been spent. Of the $2.5 million contingency $900,000 was on record as having been approved or under investigation with a further $660,000 being set aside to fund tactics to speed up construction. Chair Kolb asked what types of issues had thus far resulted in the commitment of the contingency funds. Julie Pomerleau noted that 88 change orders were on record with an average cost of $15,000 and all were within the range of normal for a project of this magnitude.
d) Current Status of Actions Taken as a Result of the 2005 and 2006 External Audit Management Letters for The Region of Peel
Beate Wilson stated that Internal Audit annually performs a follow up regarding the External Auditors Management Letter. The 2006 management letter had identified four points, two of which have already been implemented, one will be implemented by October 31, 2007 and the fourth will be implemented with the year-end accounting process. There was one item outstanding from the 2005 Management Letter and that item has been resolved in 2007 cooperatively between the Region of Peel and the Peel Housing Corporation.
Councillor Corbasson inquired about the $8 million development related write-off that was, according to the report, deemed not collectable. Mitch Zamojc, Commissioner of Environment, Transportation and Planning Services responded that the write-off noted in the report, to the best of his recollection, related to a front end financing agreement in the Bram-West area of Brampton and that there was no recoverable because the infrastructure had already been completed. Councillor Corbasson sought clarification that the Region was not out $8 million and requested that further information regarding this particular write-off and the Region’s policy on write-offs be brought to the next Audit Subcommittee meeting. Mitch Zamojc responded that the Region was not out $8 million, that the costs were allocated within budget. Beate Wilson agreed to bring a report to the December 6, 2007 Audit Subcommittee meeting with additional information regarding the $8 million write-off and the Region’s policy regarding write-offs.
e) KPMG 2007 Audit Planning Report
Kevin Travers, Associate Partner, KPMG (Region of Peel External Auditor) provided the Audit Subcommittee with a high-level overview of the Planning report. He advised that the report addressed the oversight role of the external auditor; identification of any new accounting standards or practices; an initial resource assessment of materials; staffing requirements and timelines to conduct the external audit process. Further, he noted that next year the Audit Planning report for the Region and the Peel Housing Corporation would be drafted separately.
a) "Tone at the Top" Newsletter: July 2007
6. SCHEDULE OF FUTURE MEETINGS
December 6, 2007
8:30 a.m. - 9:30 a.m.
Council Chamber, 5th Floor
Regional Administrative Headquarters
10 Peel Centre Drive
7. OTHER BUSINESS - Nil
The meeting adjourned at 9:03 a.m.