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HomeMy WebLinkAboutAudit - 2016-09-26AUDIT COMMITTEE MINUTES SEPTEMBER 26, 2016 The Audit Committee met this date commencing at 3:30 p.m. CITY OF KITCHENER Present: Mayor B. Vrbanovic - Chair Councillors S. Davey, F. Etherington, Y. Fernandes, K. Galloway - Sealock, J. Gazzola, B. loannidis, Z. Janecki, S. Marsh, and D. Schnider. Staff: J. Willmer, Chief Administrative Officer M. May, Deputy CAO, Community Services J. Readman, Interim Executive Director, Infrastructure Services C. Fletcher, Interim Executive Director, Infrastructure Services B. Johnson, Director of Accounting, Finance & Corporate Services R. Lebrun, Manager of Accounting, Finance & Corporate Services C. Tasker, Internal Auditor D. Livingstone, Committee Administrator 1. FCS -16 -142 — 3 d QUARTER AUDIT STATUS REPORT The Committee considered Finance and Corporate Services Department report FCS -16 -142, dated September 16, 2016 regarding the 3rd Quarter Audit Status Report. Ms. C. Tasker presented the Report which included a follow -up audit of the Legislated Services Division and a comprehensive audit of the Accounting Division. In addition, she explained audits of the capital balances and a comprehensive review of the Revenue Division are currently underway and will be brought forward once completed. Ms. Tasker reviewed the objective of the Legislated Services follow -up audit which was to assess the outcome of the original audit completed in January 2012. She reviewed the methodology for completing the follow -up, the positive impacts to the division since the original audit was completed, as well as the unaddressed issues and new risks to the division as outlined in the Report. Ms. Tasker presented five new recommendations and encouraged staff and management to continue to work together to address the outstanding recommendations from the original audit as well as the new recommendations presented this date. With regard to next steps, Ms. Tasker advised an additional follow -up audit is not required. Ms. Tasker responded to questions advising that although there are outstanding and additional recommendations resulting from the audit, an additional follow -up is typically only required if significant issues come forward through the review. She stated that through the follow -up audit, she is confident that the Director of Legislated Services is implementing the recommendations within as outlined in the Report. Mr. J. Willmer elaborated on the process indicating that the audit provides the performance objectives for senior management to continually seek efficiencies within their divisions. Ms. Tasker presented the comprehensive audit of the Accounting Division as detailed in the Report, outlining the objective, methodology and findings of the review. She highlighted the strengths, issues and risks, noting that 68 recommendations were developed and provided an overview of key recommendations within process reviews and controls testing. In addition, she specifically recommended all Accounting staff dedicate time monthly to develop desk procedures and cross -train each other on mission critical tasks in order to ensure business continuity. In response to questions regarding cross - training of staff, Ms. Tasker indicated the need for cross - trained staff has been identified as a risk more than once during internal service reviews and is currently the responsibility of management. Committee members encouraged staff to develop a corporate protocol for cross - training to reduce the risk to service. FCS -16 -144 - SERVICE REVIEW PRIORITIZATION REFRESH The Committee considered Finance and Corporate Services Department report FCS -16 -144, dated September 19, 2016, regarding the Service Review Prioritization Refresh. Ms. C. Tasker presented the Report which provides a refreshed prioritized list of services from the risk data gathered from each of the Divisions. She explained the list has been provided to inform the creation of the 2017 integrated service review work plan and lists in order, areas of AUDIT COMMITTEE MINUTES SEPTEMBER 26, 2016 - 4 - CITY OF KITCHENER 2. FCS -16 -144 - SERVICE REVIEW PRIORITIZATION REFRESH (CONT'D) high risk within 44 divisions or sections within the corporation. She indicated the intent of the data collection is for use by senior management to align strategies and resources to address common high risk areas or opportunities in a coordinated fashion to meet strategic and business plan objectives. Committee members were asked to provide input regarding the prioritized list, as outlined in the Report, and bring forward any additional areas for review to be considered in the 2017 work plan. Ms. Tasker noted the annual work plan will be brought forward for consideration at the December 2016 Audit Committee meeting. Members indicated the desire to have the following service areas re- prioritized or added for inclusion in the 2017 integrated service review work plan: water and gas utilities operations review to better understand the possible cross - training opportunities of technicians; by -law enforcement operations review; parks and open space design and development operational review; engineering services operations review with an examination of the value -add of consulting fees; information technology review with a focus on cyber security; engineering services review of fees and best practices compared to other municipalities, minor variance fee review; and, operations comprehensive review. Ms. Tasker requested, and it was agreed, that each service area would be voted on for consideration to be included in the 2017 work plan. In response to questions, Ms. Tasker confirmed Information Technology, specifically cyber security, would be included on the 2017 work plan. With regard to winter maintenance operations, Ms. Tasker advised staff are collecting information on current processes this winter to assist a review in future. Mr. J. Willmer responded to questions regarding fees, advising the analysis and review of the Fees and Charges By -law is presented for Council approval annually, noting that minor variance fees for fences could be addressed through budget deliberations. He added that the process for review of engineering, building and planning fees for 2017 is underway, with groups such as the Homebuilders' Association, and would be identified for review for 2018. On motion by Councillor Y. Fernandes, seconded by Councillor K. Galloway- Sealock, the following areas of services are to be considered to be included in the 2017 integrated service review work plan: • Water and Gas Utility - operational review; • By -law Enforcement - operational review; • Open Space Design and Development - operational review; • Engineering Services - review of consulting services; • Minor Variance Fees; • Information Technology - cyber security assessment; and, • Operations Division - comprehensive review. Carried. ADJOURNMENT This meeting adjourned at 4:42 p.m. D. Livingstone Committee Administrator