HomeMy WebLinkAboutFCS-14-020 - 1st Quarter Audit Status ReportI
Staff Report
finance and Corporate Services Department wvmkitchener ca
REPORT TO:
Audit Committee
DATE OF MEETING: March 4, 2014
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 21, 2013
REPORT NO.:
FCS -14 -020
SUBJECT:
1st QUARTER AUDIT STATUS REPORT
RECOMMENDATION:
For information only.
EXECUTIVE SUMMARY:
The following report provides a summary of the Internal Audit activities completed during the
period of December 2013 to February 2014. The chart below shows the audits and other work
contained in this report.
The following items are currently in progress and will be brought forward at a future audit
committee meeting in 2014:
• Purchasing comprehensive audit
• Market capacity review
• Centre in the Square and Kitchener Waterloo Symphony operational and strategic
review
BACKGROUND:
The Internal Audit 2014 work plan was approved during the audit committee meeting held on
December 9, 2013. This report provides a summary of the work completed during the 1 st
quarter of 2014.
2 -1
REPORT:
1. The Aud and Arenas — Comprehensive Business Review
Status: Complete, February 18, 2014
Audit Objectives:
The objective of this review was to examine the services provided, processes, resourcing and
culture within the unit. The review assessed the positive aspects which should continue, as
well as possible areas to improve efficiency and effectiveness, mitigate risks and improve the
culture within the unit.
Methodology:
The following research and analysis was undertaken for this review:
• Employee interviews - 13 Aud and Arenas front line staff were interviewed to gain an
understanding of the strengths of the unit as well as areas for improvement.
• All unit staff were given the opportunity to fill out a feedback survey; 35 responses were
received including all management staff which represents a 15% response rate which is a
normal response rate for this type of survey.
• Internal stakeholder interviews — 23 interviews were held with internal stakeholders (such as
facilities management, economic development, athletics, etc.) including a cross - section from
management and staff levels and Council regarding the strengths of the unit and areas for
improvement.
• External stakeholder surveys — 22 external stakeholders such as seasonal user groups,
leagues and tournament groups were surveyed regarding the strengths of the unit and
areas for improvement.
• Risk register created through interviews with management and a facilitated workshop
exercise.
• Financial analysis
• Review of unit's strategic planning documents, goals and directions.
• Literature review of relevant internal and external research, reports, and internal
correspondence
• Review of processes which had been identified by staff or customers as possible areas for
improvement.
• Benchmarking with 4 other municipalities of similar size including Burlington, Windsor,
Peterborough and London.
Findings and Recommendations:
Strengths:
When asked about the strengths of the unit, many stakeholders commented on the knowledgeable,
talented staff who work in the unit, who provide excellent customer service and take pride in their
workplace. It was also mentioned that the unit delivers excellent programming and events and that
they have a very strong brand identity and marketing platform.
The unit also feel that one of their greatest strengths is the staff. They are highly technical and
professional. They felt that they are able to pull together as a team to provide excellent
customer service. Many felt that it was a very positive work environment. A secondary theme in
2-2
this area was the quality of facilities that the City has to offer to the public. Some felt that they
were clean and safe facilities.
Areas for Improvement:
Training
Arenas are a seasonal business and therefore there is annual turnover of staff. Much time is
spent training (and retraining) staff at the beginning of each season. There are also staff
shortages due to vacations and required gapping which make training an ongoing task. Having
manuals for each position would help new staff and those staff who backfill other positions.
Work is already underway on this initiative.
The unit should also investigate the use of an online training course and testing similar to what
Operations implemented last year. This will allow seasonal staff to be trained and tested prior to
their start date, leading to more productive time once they start. It will be important to continue
to include the option for face to face training for those without internet access.
Performance Measurement
Staff were asked about how their unit and individual performance is measured, if at all. Several
people said that they did not know or felt that it was not measured at all. Others were able to
name several ways in which division and individual performance is measured or rewarded. The
main theme here is that staff did not have a consistent answer about how performance is
measured. All staff should be made aware of the goals they are trying to achieve related to their
role and the unit as a whole and specifically how they will be measured against those goals.
Pending Retirements
Several employees are due to retire in the next few years, including several of the "B- operator"
employees. This is a legislated position and difficult to fill. It is recommended that management
engage in proactive succession planning and involve their HR Associate to help capture
knowledge and leverage the workforce planning model. This will help mitigate the risks related
to pending retirements. They should also recruit and train in -house for the B- operator positions
to ensure no gaps in service or non - compliance with legislation.
Financial Management
It was found that the budget and actuals financial data for the Aud and Arenas is misleading if
viewed in isolation for decision making purposes. First, the Aud and Arenas cost centres do not
include any facilities management, capital costs, or reserve fund revenues meaning that it is not
a true picture of the total costs to run the arenas. Second, many of the overhead costs are
charged to the Aud rather than individual arenas which also distorts the true cost of operating
each arena. Similarly the Aud numbers are distorted in that they include debt repayment
charges and costs for the stadium and ball field.
In addition, due to limited budget increases each year there is very little budget to allocate to
preventative maintenance which could lead to premature failure of equipment or buildings.
All of these factors may mean that not enough budget is estimated for new arenas in the future
if all costs are not considered or that sub - optimal decisions may be made based on the data. It
is recommended that all relevant costs be analyzed by arena on a regular basis, including
facilities management, capital costs, reserve fund revenues, debt repayment charges and
2 -3
overhead allocations. This will lead to better decision making and more accurate cost estimates
when deciding on the future of the Aud and the construction of new arenas such as the South
District arena.
Communications
Having staff at different locations and working different shifts makes it difficult to share important
messaging and training. Staff mentioned that current methods of communications (emails /
mandatory training sessions) are not effective for all staff. It is recommended that management
focus on experimenting with a variety of communication methods in order to reach all staff. This
would include supervisors reinforcing and following up on messages delivered to ensure
understanding and receipt by all staff.
In addition, it is recommended that cell phones or blackberries be purchased for all lead hands.
This would facilitate more effective and timely communication between the lead hands and their
supervisors, staff, contractors and the by -law division. In addition, these units can be used to
adjust building controls remotely rather than having to drive -in after hours.
Service Offerings
As part of this review a financial analysis by arena was created. This analysis showed that the Aud
and Arenas are subsidized by the tax base. Given the current role of the Dom Cardillo Arena as a
provider of both entertainment and recreational and leisure programing thought should be given to
whether its function should solely be for spectator events and entertainment. Internal stakeholders
felt that the Dom Cardillo arena should be a revenue generating business, and not a drain on the tax
base. When the future of the Dom Cardillo arena is discussed it will be important to review all the
costs and revenues related to operating a spectator venue, and also alternate sites, facility design
and operating models should be considered.
Technology
Staff were asked what technology they wished they had in order to perform their duties more
effectively and efficiently. In addition to the cell phones for lead hands already mentioned, a
sampling of suggestions include adding TV screens in the lobbies to show programming;
purchasing event management software; purchasing more 2 -way radios; and standardizing the
age and quality of equipment for all staff. It is recommended that management consider the
feasibility of each of the requests and implement those which will benefit the unit in terms of
improved customer service or operating efficiencies.
Conclusions:
Through the use of various techniques the review team examined the strengths and
weaknesses of the Aud and Arenas unit. Overall the findings were very positive and the
recommendations focus on small improvements in order to make processes as efficient and
effective as possible, mitigate the key risks and improve the culture of the division.
2 -4
2. Municipal Election - Process Review
Status: Complete, February 7, 2014
Audit Objectives:
To analyze current and past processes for preparing for a municipal election to determine if
sufficient attention has been placed on continuous improvement and whether the process is well
organized.
Methodology:
Interviews were conducted with all current election committee members to gain an
understanding of what their role is, strengths and weaknesses of past elections, and what will
be improved for the 2014 election.
Findings:
Summary
Observation of the 2010 election had indicated that there may be some manual, labour intensive
processes and perhaps some outdated philosophies regarding the municipal election
preparation process. The interviews aimed to uncover those areas still requiring adjustments or
improvements and / or ensure that sufficient attention has been placed on improving the overall
process.
The review team found that the planning process for the 2014 election is well underway and
many improvements have already been made since the 2010 election. The staff committee
involved in preparing for the election started planning in June 2013. They have built on
successes from the 2010 election and made several improvements to the processes. They have
reviewed all of the complaints from the last election and have tried to address each one. One
key to success so far has been the creation of a multi - functional election committee and
improved governance. Another major improvement will be the introduction of new software
which will make the process more efficient.
The committee is committed to continuous improvement and plan to debrief the 2014 election in
order to capture lessons learned and areas for improvement for the 2018 election. A follow up
to this review will be done at that time as part of the debrief process to see if the expected
benefits and cost savings of changes were realized and if there are further areas for
improvement.
It is the review team's opinion that the 2014 election process is in control and sufficient attention
has been placed on improvement initiatives.
A sampling of some of the many improvements is included below.
Governance
For the first time the committee has developed a vision, goals and objectives for the election to
guide all of their decisions and actions. The vision is: "Efficiently facilitate an open, fair and
impartial process that encourages participation and inspires confidence in the 2014 municipal
election ".
2 -5
Internal Partnerships
The philosophy on ownership for the election has changed. It is not just Legislated Services'
responsibility any more but rather becoming more of a corporate initiative. The following are
some examples of this partnership approach and drawing on complementary skills and
knowledge across the organization:
• Early involvement: Staff outside of Legislated Services who are key to the process were
brought in at the early planning stages including Communications & Marketing, IT and
Purchasing.
• Voting location inspections: In the past members of the committee had to inspect the
voting locations for Accessibility for Ontarians with Disabilities Act compliance which was
time consuming. This year they have partnered with the building division. Building
inspectors will undertake these inspections and because there is adequate lead time it
will not impact their regular work schedules.
• Supplies delivery: In the past legislated services staff has transferred supplies to voter
locations in personal vehicles. This is sometimes a challenge given the size of the
equipment and supplies relative to the size of the vehicles. The committee is going to
reach out to Facilities Management this time to arrange for the transfer of supplies and
equipment.
Polling stations management: The committee will be encouraging more City staff to work
at and manage the polling stations. The committee is working on an arrangement to
provide City staff with a day off in lieu of payment which would also save out of pocket
costs.
Technology
They will be using the same tabulators as last time since it is a proven system, known to
withstand scrutiny based on the 2010 challenge and recount. It will also mean less training of
staff than if a new system was used.
They also will be using a new software program called "Municipal Voter View" by DataFix. This
software will facilitate the use of electronic voter strike -off which means that if the citizen has
their voter card with them the bar code on it can be scanned rather than having to look up their
name on the list and strike it off manually. Although paper lists will still be used for this process,
the electronic strike -off will reduce wait times. It will also facilitate more accurate voter lists over
time and reduce negative voter experiences related to deceased persons. Efficiencies are
expected over the existing in -house election management system both in general information
management and for tasks such as letter generation.
There will be "ballots on demand" for the advance polls. This means that ballots can be printed
on demand for people from different wards who show up at the advance polls. This will save
having to print and carry ballots for all wards to every advance poll which saves time, money,
and paper.
Similar to last time there will continue to be a live tally of results on election night in Council
Chambers which is open to the press. This provides openness and transparency to the
process.
2 -6
Voter Locations
More thought has been given to the location of advance polls through reviewing population
concentrations and access to major highways. This will improve access for advance voting
since citizens can vote at any location near their home, place of work or along their daily
commuting route.
The apartment building advance polls will be discontinued due to low turnout in previous
elections which will save staff costs and require less equipment. In addition, the advance polls
will be done in contiguous days which means that the equipment does not need to be set up /
torn down multiple times and can be stored there over night. This saves time and effort.
There is a new philosophy for voting locations which aims to consolidate several smaller
locations into larger locations with more parking such as high schools. Smaller churches were
used in the past which the City had to pay to use. This time the voting locations have been
reduced from 65 to 56 and we do not have to pay for any of them.
In the past polling stations were set up in 17 institutions such as nursing homes or hospitals for
the whole day. This time teams will go to a few different institutions at specific times of day
around meal times, when residents typically gather in common areas where polls are set up.
This method will be more efficient, require less equipment, cost less to staff, and potentially
increase voter turnout.
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 and service reviews 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.
FINANCIAL IMPLICATIONS:
While there are no immediate financial implications related to this report, a few of the
recommendations contained in the Aud and Arenas review may require funding should
management adopt the recommendations. The manner in which they are funded will be left to
the discretion of the management team and could include existing program funding,
partnerships, or new operating or capital budget requests.
COMMUNITY ENGAGEMENT:
Members of the community have been informed of the results of this audit status report through
the posting of this report on the internet on February 26, 2014.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO, Finance and Corporate Services
2 -7
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