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Home My WebLink About2009-04-06 AUDIT COMMITTEE MINUTES APRil 6, 2009 CITY OF KITCHENER The Audit Committee met this date commencing at 1 :07 p.m. Present: Mayor C. Zehr - Chair and Councillors J. Smola, J. Gazzola (was in attendance for part of the meeting), K. Galloway, G. Lorentz, B. Vrbanovic and C. Weylie Staff : C. Ladd, Chief Administrative Officer D. Chapman, General Manager, Financial Services T. Speck, General Manager, Corporate Services J. Will mer, Acting General Manager, Dev & Tech Services C. Fletcher, Director of Facilities Management, Corporate Services T. Hare Connell, Director of People Services & Organizational Development K. Dever, Organizational Change Facilitator, CAO's Office L. Alonzo, Performance Measurement & Internal Auditor R. Gosse, Committee Administrator 1. CAO-09-014 AND CRPS-09-036 - FACiliTIES MANAGEMENT ORGANIZATIONAL AND FUNCTIONAL REVIEW The Committee considered Chief Administrator's Office report CAO-09-014, dated March 18, 2009, regarding the Facilities Management Organizational and Functional review and, Corporate Services Department report CRPS-09-036, dated March 2, 2009, being the Director's response to the review. Ms. K. Dever advised that in November 2007, an organizational and functional review of the City's Facilities Management (FM) Division was completed, however, it was not presented in order to allow the newly appointed Director time to formulate a response. Ms. Dever provided the objective of the review highlighting: · Identifying the best role for approved supervisor position; · Addressing staff to supervisor ratio; · Gaining understanding of Division evolution over time roles / responsibilities, scope, facilities and staffing · Documenting and analyzing work processes; · Determining best alignment of functions; · Identifying areas of success and areas for improvement. Ms. Dever then reviewed and highlighted the findings of the review: · High staff to supervisor ratio; · Supervisory focus; · FM staff dedicated, knowledgeable and skilled; · Access decentralized in-house expertise valued; · Information sharing and communications could be improved in several areas; · Several functions require role clarification or further investigation. On summary, Ms. Dever advised that the recommendations from the review included organizational change which should result in clarification of roles, better alignment of functions and reduced staff to supervisor ratio. Current processes should be reviewed for efficiencies which would include outsourcing when appropriate and cost effectiveness of in-house services. The third recommendation revolved around customer service which would include work order status and costing information, clarifying roles and improved planning for budget preparation, clarifying roles for capital project administration, improved links in communication within FM sections and customized custodial service agreements for each facility. Ms. C. Fletcher advised that the key issues the Division will focus on are workload, supervising custodial staff, defining core business and focusing efforts to adhere to the core business. Ms. Fletcher then highlighted the next steps to be taken by the Division in implementing these changes which included a customer service / communications strategy, strategies to manage change, asset management, administrative support for project management and, identifying the impact of the central maintenance facility on the Division business processes. Councillor J. Gazzola entered the meeting. AUDIT COMMITTEE MINUTES APRIL 6, 2009 - 2- CITY OF KITCHENER Mayor C. Zehr asked if there were particular areas of the Division that require shifting of roles due to the inequities identified in the review. Ms. Fletcher advised that the focus will be within the custodial and trades area to ensure effective supervision for those two staff groups. On motion by Councillor C. Weylie- it was resolved: "That report CAO-09-014, dated March 18, 2009, and report CPRS-09-036, dated March 2, 2009, regarding the Facilities Management Organizational and Functional Review, be received for information." 2. CAO-09-016 - KITCHENER MARKET REVIEW The Committee considered Chief Administrator's Office report CAO-09-016, dated March 20, 2009, regarding the Kitchener Market Administrative Review. Ms. L. Alonzo advised that at the request of the Director of Economic Development an audit review of the Kitchener Market was undertaken. Ms. Alonzo explained that the objective of the review was to analyze cash handling, rent collection and deposit processes to identify control weaknesses and recommend improvements to reduce risk and increase efficiency. In addition, a review of the general administrative functions was included to identify areas for improvement. Ms. Alonzo then highlighted a few of the 36 recommendations which included: · An improved process for keeping of cash and negotiable items; · Use of the Class System for rental contracts; · Rates charged to vendors to be in compliance with Council approved fee and charges; · Delinquent vendor accounts handled by the City's Accounting Department; · Vendor files brought up to date and to include all pertinent information for each vendor. Ms. Alonzo advised that the Director has taken steps to ensure that all of the Auditor's recommendations have been fully implemented or are underway. On motion by Councillor B. Vrbanovic- it was resolved: "That Chief Administrative Office report CAO-09-016, dated March 20, 2009, regarding the Kitchener Market Administrative Review, be received for information." 3. CAO-09-017 - HUMAN RESOURCES REVIEW - DIRECTOR'S RESPONSE The Committee considered Chief Administrator's Office report CAO-09-017, dated March 30, 2009, regarding the response to the Human Resources Review by the Executive Director of People's Services and Organizational Development. Ms. T. Hare-Connell advised that an audit of the Human Resources Division was completed in November 2008 with three objectives: effectiveness of the HR Division as a whole; recruitment process; and, attractiveness of the City of Kitchener as an employer. Ms. Hare- Connell further advised that the HR team has identified the following priorities / objectives: · Develop and enhance business partnerships; · Adopt a continuous improvement focus; · Align resources to deliver HR services; · Facilitate an on-going culture of safety. Ms. Hare-Connell then reviewed some of the initiatives planned and/or underway under three key areas. Effectiveness · Develop a 'dashboard' to track large amount of data; · Five-year review cycles of policies; · Review of group and health benefits; · Tender in Fall 2009 for health benefits; · Strengthening relationships with Unions; AUDIT COMMITTEE MINUTES APRIL 6, 2009 - 3- CITY OF KITCHENER Recruitment · Implement changes to make recruitment process more efficient and effective; · Consider a Candidate Management System to assist in process; Attractive Emplover · Improve web presence; · Benefit review; · Application for top 100 employers; · Living the People plan. Councillor B. Vrbanovic suggested there would be changes as a result of the audit that will impact staff and asked how that can be measured. Ms. Hare-Connell advised that HR staff are committed to working hard to deliver the goals as outlined in the report and one method of measurement could be the Culture Survey. Mayor C. Zehr pointed out that the recommendations from the audit will have changes and asked how those would be measured and whether benchmarks have been established. Ms. Hare-Connell advised that although the final method of measuring and benchmarks have not been completed as yet, staff are working towards establishing benchmarks and key performance indicators. In response to questions regarding group benefits the Committee was advised that the last time the City tendered for the benefits was in 2001 and it is anticipated they will be tendered in September 2009. On motion by Councillor K. Galloway - it was resolved: "That Chief Administrative Office report CAO-09-017, dated March 20, 2009, regarding the Director's Response to the Human Resources Review, be received for information." 4. CAO-09-015 - CORPORATE RISK MANAGEMENT POLICY The Committee considered Chief Administrator's Office report CAO-09-015, dated March 20, 2009, regarding a proposed Corporate Risk Management Policy. Ms. L. Alonzo advised that in February 2007, KPMG Consultants were retained to deliver a workshop for senior management introducing the concept of enterprise risk management. Since that time, the internal auditors have continued to expand risk management services including the development of risk assessment and monitoring risk registers for major projects such as Delta, Consolidated Maintenance Facility and King Street Streetscape. Ms. Alonzo explained that enterprise risk management is a method or process used by an organization to manage risks and seize opportunities related to the achievement of their objectives. This typically involves identifying specific risks and opportunities, assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress. Ms. Alonzo further explained that the reason for the proposed policy is to provide guidance to advance the use of a more corporate and systematic approach to risk management, contribute to building a risk smart workforce and environment that allows for responsible risk taking, and establishes a set of risk management practices that a department can adopt. Ms. Alonzo then reviewed the categories of risk for the City being: · Service delivery; · Employees; · Public; · Physical Environment; · Reputation; · Financial; · Regulatory. Ms. Alonzo explained that capital projects requiring a business case or those with potential exposure greater than $50,000. will be assessed under the categories, assigned an impact score based on a scale of 1 - 4 representing minor to catastrophic and given a score for the likelihood of a risk based on a scale of 1 - 5 representing rare to almost certain. Once assigned an impact and likelihood scale, the two numbers would be multiplied for a total score. This score would then be compared to the risk matrix resulting in the appropriate action being taken. AUDIT COMMITTEE MINUTES APRIL 6, 2009 - 4- CITY OF KITCHENER Councillor J. Gazzola asked how many full-time staff will it take to administer the project risk management program. Ms. Alonzo advised that no FTE's have been assigned, the Audit Team would undertake the analysis in conjunction with the various divisions as part of their regular workplan. Councillor Gazzola suggested that there may be considerable time spent on analyzing risks, more than is necessary and questioned the need for the proposed process. Ms. C. Ladd responded advising that the focus would be on large projects such as the Delta System and the Consolidated Maintenance Facility to help identify barriers and risks prior to proceeding with the project. This will ensure plans are in place to mitigate risk and have the projects completed on time and within budget. Mayor C. Zehr questioned the threshold for business cases at $50,000. wondering if this should be reviewed and the threshold raised. Ms. Alonzo advised that the threshold is a guide and a decision to undertake a full risk assessment will be done on a case by case review. She added if there is no need for a full assessment, they will not proceed however, all stakeholders will be made aware of any risks no matter how minor. On motion by Councillor J. Smola- it was resolved: "That the Corporate Risk Management Policy and Framework as outlined in Chief Administrator's Office report CAO-09-015, be approved." 5. AUDIT WORKPLAN UPDATE Ms. L. Alonzo provided a brief overview of the performance measurements activities and internal audit activities that have taken place between December 2008 and March 2009. Councillor B. Vrbanovic expressed concern regarding the internal audit of the Social Planning Council as it was his understanding the review would be conducted by Community Services Department. Ms. Alonzo advised that the internal audit is only a subset of the larger review being conducted by the Community Services Department. Ms. C. Ladd advised that it was decided it would be more cost effective to use the internal auditor for this particular review rather than going to an outside consultant. 6. ADJOURNMENT On motion, the meeting adjourned at 3:36 p.m. R. Gosse Committee Administrator