HomeMy WebLinkAboutFCS-13-007 - 1st Quarter Audit Status ReportStaff Report
l t finance and Corporate Services Department wvwuu kitchener ca
REPORT TO: Audit Committee
DATE OF MEETING: March 4, 2013
SUBMITTED BY: Corina Tasker, Internal Auditor, 519 - 741 -2200 EXT 7361
PREPARED BY: Corina Tasker, Internal Auditor, 519 - 741 -2200 EXT 7361
WARD(S) INVOLVED: ALL
DATE OF REPORT: February 26, 2013
REPORT NO.:
SUBJECT:
RECOMMENDATION:
For information only.
FCS -13 -007
1st QUARTER AUDIT STATUS REPORT
EXECUTIVE SUMMARY:
The following report provides a summary of the Internal Audit activities completed during the
period of December 2012 to February 2013. The chart below shows the audits and other work
contained in this report.
AUDIT
Division /Topic
Scope
Legal division
Follow up audit
Cash Counts
Controls review
The following 2012 work plan items are currently in progress and will be brought forward at a
future audit committee meeting in 2013:
• Operations review
• Emergency Plan audit
BACKGROUND:
The Internal Audit 2013 work plan was approved during the audit committee meeting held on
December 3, 2012. This report provides a summary of the work completed during the 1st
quarter of 2013.
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REPORT:
1. Legal Division — follow up audit
Status: Complete, February 21, 2013
Audit Statistics
Date Audit Completed
November 2010 (Original)
February 2013 (Follow-up)
# of Recommendations
17
# of Recommendations Complete
15
# of Recommendations In Progress
2
# of Recommendations Not Started
0
Objectives
Each division which has been reviewed by Internal Audit in the past will participate in a follow up audit
at least one year following the completion of the original audit. The purpose is to assess the outcome
of the audit in terms of which recommendations have been implemented, what the impact to the
division has been, and to identify any new or existing challenges the division is facing. This will help
determine if a further in -depth review is required and will highlight any high risk issues proactively.
The original audit of the Legal Services division was completed in November 2010.
Methodology
The following research and analysis was undertaken for the follow up audit:
• 8 staff surveys, representing 100% of the division's employees
• Review of relevant literature, including the original audit report and output related to the
original recommendations
• Review of Employee Culture Survey results specifically related to satisfaction with Legal
Services
• Review of feedback gathered during outreach sessions with client divisions as part of the
Finance and Corporate Services Internal Services Strategy
Key Findings
Positive Impacts
As with the original audit, the results of the follow up audit are very positive. The auditor is
pleased with the progress made to date.
Staff noted that they were also pleased with the positive audit results as they helped to dispel
any misconceptions about Legal operations. The audit report also helped to bring attention to
the workload issues.
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Several process improvements have been made as a result of the audit recommendations. For
example, circulating documents electronically rather than hardcopy has helped to improve
turnaround time and save money on paper. Staff have made an effort to communicate
turnaround times and better manage customer expectations. Expected turnaround / submission
times from clients have been cut by 25% which helps to reduce overall cycle time. Signing
authority has been delegated wherever possible to avoid having to wait for Council meetings
which further decreases the cycle time.
Staff feel they continue to have good relationships with other divisions and Council. This is
evidenced through the results of the custom questions on the recent Employee Culture Survey
results. These custom questions were completed by any staff across the corporation who have
had recent interactions with the Legal division. 89.8% of the 247 client respondents agree or
strongly agree that Legal staff are courteous and professional. 74.9% agree or strongly agree
that Legal services are accessible and 78.1 % agree or strongly agree that they are satisfied with
the overall quality of services provided by the division. 70.8% agree or strongly agree that the
division provides timely and clear communications / outputs.
Part of the Finance and Corporate Services Internal Services Strategy involves engaging with
client divisions through outreach meetings to dialogue about their needs and how FCS divisions
can work together with them. Input gathered through the outreach meetings between Legal
staff and various client divisions further supports the positive relationships that the division has
built throughout the corporation. Many noted that they currently have an excellent relationship
with the division, find that they are accessible, supportive, and that they provide good service.
There were still some suggestions for improvement which echoed the original audit comments
and are noted below.
Relationships and communication within the division are reported to have improved since the
audit and are rated as good to excellent by the staff.
Emerging Issues and New Recommendations
Workload continues to be a major issue in this division. Although the audit recommended hiring
another lawyer the budget climate in the last few years has precluded them from pursuing
additional resources. In addition, one of the administrative positions is vacant due to a
retirement which is adding stress and workload to the entire division. However, management
has indicated that they are actively exploring solutions to maximize the use of the vacant FTE
with a view to decreasing workload.
Another outstanding issue is the lack of filing space. Given the short staffing and general
workload issues file management has not been a priority for the division. The filing cabinets are
completely full with no room for new files. Staff have suggested hiring a summer student to
address the need for sending files to records retention.
As noted above, although the feedback through the Employee Culture Survey and the
subsequent outreach meetings was very positive overall, there were a few recurring themes of
areas for improvement. Some customers still feel that Legal staff are too conservative and need
to adopt a more proactive philosophy. The continuing workload problem has made some
customers frustrated with the turnaround times. They also suggested that staff could do better
at communicating their priorities and timelines.
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Recommendations:
Once the job duties of the vacant role are confirmed, communicate them across the
corporation to demonstrate how workload and turnaround issues are being addressed
within existing headcount given the inability to increase staffing levels at present.
2. Hire a co -op or summer student to assist with the records retention backlog, to be funded
through the gapping savings associated with the vacant position.
3. Incorporate more comprehensive records management duties into the administrative
positions and ensure that this work is being attended to on a more regular basis going
forward.
4. Continue to work with customers to set and communicate expectations and timelines in
conjunction with the Service Strategy work currently underway across the Finance and
Corporate Services department.
Next Steps
No further follow -up audits will be conducted.
2. Cash Counts
Status: Complete, February 21, 2013
Objectives:
• Verify all cash floats, petty cash and miscellaneous cash at City facilities
• Evaluate controls and safekeeping of cash and other valuables
• Ensure accurate reporting to finance and accounting
• Identify opportunities for efficiencies
Scope:
The internal audit division conducts annual "surprise" cash counts at all City facilities that have cash
operations. A full review of the facility's administrative functions is not conducted unless the auditor
feels it is warranted based on preliminary findings. All cash is counted by two auditors and a
checklist is completed for each location.
Summary Findings:
All cash variances are considered minor and records were generally organized and current. Controls
appear to be sufficient and staff are generally following established policies. There are a few minor
recommendations listed below.
Lyle Hallman pool has only one safe which contains the petty cash float, coin float, swim tickets and
the daily deposits. All staff have access to the safe as they need access to the coin float, swim
tickets and to insert daily deposits. It is recommended that a second safe be purchased which has a
slot for deposits. The petty cash float could then be kept in the new safe along with the deposits and
access could be limited to 2 to 3 people.
The Forest Heights pool float was kept in an unsecured location during business hours since the safe
is too far away from the front counter area to access quickly during busy periods if extra change is
needed. Therefore it was recommended that the float be moved to a locked cabinet within the
counter area instead.
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The Pro Shop float at Rockway Golf is taken from the petty cash float. This was only evidenced by a
post -it note in the cash tray of the petty cash float. It is recommended that a sign -out process be
developed to confirm and reconcile the float being taken by the Pro Shop each time.
Bridgeport Community Centre had several gift cards in their safe but no record or log to track
disbursement. They should implement a disbursement log and reconciliation process as gift cards
should be treated as cash.
The Kitchener Market had two floats — one for petty cash and one for special events. The special
events float was over by $162. This was because staff had submitted their receipts for
reimbursement but had not received their cash yet as there was not enough to cover the expenses.
The amount of the special events float should be increased to $1000 to avoid this happening in
future. The petty cash float could be reduced to $1000 as it is not used as much.
At Williamsburg Community Centre the petty cash receipts had not be reconciled or submitted for top
up since early 2011. It is recommended that the float be balanced at least every 6 months. The
amount could also be reduced to $150.
Location
Cash
Over (Short)
Reconciliations
Safe
Deposits are
Remarks
agrees to
$$
are current
locked,
current
control
funds
reports
secure
Centreville Chicopee
Yes
$0
Yes
Yes
Yes
Community Centre
Woodland Cemetery
No
Over $161.34
No
Yes
Yes
Williamsburg holds petty cash
(Overage due to
for both cemeteries.
deposits not being
sent with receipts
to Williamsburg
Cemetery)
Lyle Hallman
Yes
$0
Yes
Yes
Yes
Recommend 2" safe
Pool /Grand River
Community Centre
Stanley Park
Yes
Over $0.15
Yes
Yes
Yes
Community Centre
Grand River Arena
N/A
N/A
N/A
N/A
N/A
No one available to open safe
Victoria Hills
Yes
Short $0.01
Yes
Yes
Yes
Community Centre
Forest Heights Pool
Yes
Short $0.15
Yes
No
Yes
Float kept in an unlocked
cabinet during operations
Petty cash float locked in safe
or locked drawer at all times
Forest Heights
Yes
Over $4.75
Yes
Yes
Yes
Community Centre
Grand River Arena
N/A
N/A
N/A
N/A
N/A
No one available to open safe
Chandler Mowat
Yes
$0
Yes
Yes
Yes
Community Centre
Country Hills
Yes
$0
Yes
Yes
Yes
Community Centre
Don McClaren Arena
N/A
N/A
N/A
N/A
N/A
No one available to open safe
Activa Arena
Yes
Over $4.73
Yes
Yes
Yes
Mayor & Councils
Yes
$0
Yes
Yes
N/A
Office
The Auditorium
No
Over $24.11
Yes
Yes
Yes
Rockway Golf
Yes
Over $9.67
Yes
Yes
Yes
Post -it note for $750 from
petty cash not explained
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Overall the cash count results were very positive and indicate a low risk in the area of cash
management. The recommendations noted have been communicated to management for
action.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Work falls within the Efficient and Effective Government plan foundation area of the Strategic
Plan. The goal of Internal Audit work is to protect the City's interests and assets through
— ensuring compliance with policy, procedures and legislation
— ensuring adequate controls are in place to protect our assets
— ensuring our operations are as efficient and effective as possible
This helps support the financial goal of long term financial stability and fiscal accountability to
our taxpayers.
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Pro shop float was sitting on
the desk. Pro shop should
have sign off for float
Rockway Centre
Yes
Short $1.00
Yes
Yes
Yes
Mill Courtland
Yes
$0
Yes
Yes
Yes
Community Centre
Bridgeport Community
Yes
Over $0.90
Yes
Yes
Yes
Tracking log recommended
Centre
for Gift Cards
Breithaupt Community
Yes
Over $1.71
Yes
Yes
Yes
Centre and Pool
Kitchener Market
Yes
Over $9.72
Yes
Yes
Yes
Recommend petty cash
decreased to $1000
Kitchener Market
No
Over $162.04
Yes
Yes
Yes
Petty cash cheques not
Program Special
cashed yet and staff had not
Events
received reimbursement yet
since there wasn't enough
cash. Recommend increasing
petty cash to $1000
Downtown Community
Yes
Over $0.65
Yes
Yes
Yes
Centre
Doon Pioneer
Yes
$0
Yes
Yes
Yes
Community Centre
Williamsburg
No
Short $121.68
Yes
Yes
Yes
Cemetery
(Due to Woodland
Receipts)
Williamsburg
Yes
Over $1.66
No
Yes
Yes
Petty cash receipts had not
Community Centre
been turned in for cheque
reimbursement in over a year.
Recommend that petty cash is
reconciled every 6 months
minimum and petty cash is
decreased to $150
Doon Golf
N/A
N/A
N/A
N/A
N/A
Closed in the winter
KOF
Yes
Over $0.17
Yes
Yes
Yes
Sportsworld Arena
N/A
N/A
N/A
N/A
N/A
No one available to open safe
Overall the cash count results were very positive and indicate a low risk in the area of cash
management. The recommendations noted have been communicated to management for
action.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Work falls within the Efficient and Effective Government plan foundation area of the Strategic
Plan. The goal of Internal Audit work is to protect the City's interests and assets through
— ensuring compliance with policy, procedures and legislation
— ensuring adequate controls are in place to protect our assets
— ensuring our operations are as efficient and effective as possible
This helps support the financial goal of long term financial stability and fiscal accountability to
our taxpayers.
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FINANCIAL IMPLICATIONS:
None
COMMUNITY ENGAGEMENT:
Not applicable
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO, Finance and Corporate Services
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