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HomeMy WebLinkAbout2007-11-26AUDIT COMMITTEE MINUTES NOVEMBER 26, 2007 CITY OF KITCHENER The Audit Committee met this date commencing at 4:07 p.m. Present: Mayor C. Zehr -Chair and Councillors J. Smola, B. Vrbanovic, J, Gazzola, K. Galloway, G. Lorentz and C. Weylie Staff: C. Ladd, Chief Administrative Office P. Houston, General Manager, Financial Services & City Treasurer R. Browning, General Manager, Development & Technical Services & Fire Chief A. Pappert, General Manager, Community Services M. May, Director, Communications/Marketing G. Murphy, Director of Engineering T. Marr, Manager of Marketing/Creative Services C. Tasker, Performance Measurement & Internal Auditor K. Dever, Organizational Change Facilitator L. Alonzo, Performance Measurement /Internal Auditor C. Goodeve, Committee Administrator 1. CAO-07-059 - PRINT SHOP REVIEW -REPORT ON ACTIONS TO DATE The Committee was in receipt of Chief Administrator's Office report CAO-07-059, dated November 16, 2007 regarding the implementation of the recommendations arising from the Print Shop Audit. Ms. T. Marr advised that in the summer of 2005 an organizational audit of the Print Shop was undertaken. In early spring 2007, Print Shop undertook a performance measurement exercise to facilitate the completion of the recommendations arising from the audit and to provide a better analysis for a new equipment business case. She then reviewed the audit recommendations, highlighting those recommendations that have yet to be fully implemented. In response to questions, Ms. T. Marr advised that some of the current offset presses and major bindery equipment are in need of replacement, as parts are no longer available for some machines and the cost of repairs are becoming exorbitant. She stated that it is unlikely that any offset equipment will remain in the Print Shop if digital equipment is brought in; however, until the Request for Proposal (RFP) and subsequent analysis are completed, staff are unable to determine which equipment will be retained. She noted that switching from the current offset presses to digital equipment, may not result in substantial cost saving, but would result in significant efficiencies and savings in staff time. 2. CAO-07-049 - PERFORMANCE MEASUREMENT PROGRAM CHANGES - KPI FRAMEWORK The Committee considered Chief Administrator's Office report CAO-07-049, dated November 26, 2007 regarding proposed changes to the Performance Measurement Program. Ms. C. Tasker presented a proposal to develop and implement a new performance measurement program that would replace the divisional program and augment the existing Compass Kitchener metrics and the Municipal Performance Measurement Program (MPMP). She advised that the new corporate program will include both strategic and operational Key Performance Indicators (KPI's) which will measure the success of the Corporate Strategic Plan and service delivery. She stated that the strategic KPI's will consist of the KPI's created by Compass Kitchener for the 6 community based themes within the Corporate Strategic Plan as well as KPI's for the 7th theme, Efficient and Effective Government, developed by staff. The operational KPI's will consist of the KPI's required by the MPMP, supplemented by additional KPI's to cover the remaining front line services not measured by MPMP. She noted that both the strategic and operational KPI's will be collected and reported at the corporate level annually through the Business Plan Update process. In response to questions, Ms. C. Tasker advised that currently the MPMP only provides a baseline narrative on specific projects. She stated that contrary to performance measurements in the private sector where bottom line targets are easily defined and results easily measured, government performance measurements are more difficult to determine. She stated that using the MPMP and Compass Kitchener metrics as a foundation staff will AUDIT COMMITTEE MINUTES NOVEMBER 26, 2007 - 6 - CITY OF KITCHENER 2. CAO-07-049 - PERFORMANCE MEASUREMENT PROGRAM CHANGES - KPI FRAMEWORK tCONT'D) create an expanded framework that captures both efficiency and effectiveness, as well as service level and quality measures. She added that this follows the O.M.B.I. (Ontario Municipal Benchmarking Institute) model adopted by other municipalities including the Region of Waterloo. Ms. Tasker further advised that Division managers will have the option to continue with their performance measurement programs and will continue to receive support from the Performance Measurement staff. However these programs will be used primarily for internal decision-making purposes and not for public reporting, although there may be some overlap in the operational metrics chosen at both the divisional and corporate levels. At the request of Councillor J. Gazzola, Ms. C. Ladd agreed to provide the members with the definition of diversity that was used in the development of the KPI's Strategic Themes. In addition, Ms. Ladd advised that in order to determine the percentage of customer satisfaction for the KPI's, a survey would be undertaken in the fall of the year prior to a municipal election, so that the results are available by the following June. She added that this survey would not be as comprehensive in scope as the Environics Survey, and estimated that it would have a statistical sample size similar to the survey conducted for the customer service strategy. On motion by Councillor B. Vrbanovic - it was resolved: "That the modification of the existing Divisional Performance Measurement Program and the implementation of a new Corporate Key Performance Indicators Program be approved, as outlined in Chief Administrator's Office report CAO-07-049." 3. ENGINEERING PROJECTS AUDIT UPDATE The Committee was in receipt of Development and Technical Services Department report DTS-07-190, dated November 22, 2007 regarding an audit of the Victoria Street Reconstruction and the Joseph-Gaukel Reconstruction projects. Mr. R. Browning advised that in early 2007 staff were requested to undertake an audit of the two noted engineering projects in response to concerns regarding cost overruns, project timing and project methodology. He stated that the consulting firm of MMM Group was retained to conduct the audit and then reviewed the findings of their interim report, as appended to report DTS-07-190. In response to questions, Mr. G. Murphy advised that the purpose behind this audit was to identify the strengths and opportunities for improvement in the City's engineering project management processes from project inception to completion. He stated that some of the recommendations proposed in the interim report are already being implemented by staff in preparation of the upcoming construction season. He added that both the Victoria Street and Joseph-Gaukel Street projects will be used in a Lessons Learned process, so that the experiential knowledge gained by the respective project teams can be passed on to the benefit of other projects. It was noted that the interim findings contain no recommendations that require immediate action by Council and staff anticipate providing the final report at the first Audit Committee meeting in 2008. 4. DELTA PROJECT RISK REGISTER The Committee was in receipt of a PowerPoint presentation regarding the Corporate Financial and Infrastructure Management System (Delta Project) Risk Register. Ms. C. Tasker reviewed the circulated presentation and advised that given the magnitude of Delta project and the potential for failure if it is not implemented properly, the firm of KPMG Chartered Accountants were retained to conduct a risk assessment. KPMG identified a total of 59 risks in their initial assessment of the Delta project, and developed a Risk Register which rates risks by two criteria; Probability of Occurrence and Impact. She added that this is then forecasted on a scale from 1 to 10, with 10 being the highest risk category. She noted the following as the results of the initial assessment conducted in June 2007: AUDIT COMMITTEE MINUTES NOVEMBER 26, 2007 - 7 - CITY OF KITCHENER 4. DELTA PROJECT RISK REGISTER tCONT'D) • 14 risks rated as category 9; • 16 risks rated as category 6; • 29 risks rated as category 4 or lower. She pointed out that since that time the Joint Steering Committee and Internal Audit staff have reduced these risks, so now only the following remain: • 3 risks rated as category 6 (due later in project); • 9 risks rated as category 4 or lower. In response to questions, Ms. L. Alonzo advised that an Internal Audit component has been incorporated into the project structure as quality assurance. She noted that the purpose of this role is to monitor the Risk Register on a bi-weekly basis to ensure accountability and resolution of risks by the Joint Steering Committee for project Delta. 5. NEW BUSINESS In response to questions regarding a potential audit of the Special Events Division, Ms. A. Pappert advised that a revised Request for Proposal (RFP) for the development of a Division Strategic Plan will be issued in early 2008. She stated that this is intended to be a review of the Division, noting that it would be similar to a value for money audit. In response to questions, Ms. C. Tasker advised that the Human Resources Division audit is scheduled to commence in 2008. 6. ADJOURNMENT On motion, the meeting adjourned at 4:55 p.m. Colin Goodeve Committee Administrator