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2. OFFICE OF THE
AUDITOR GENERAL - 2005 ANNUAL REPORT AND 2005 DETAILED AUDIT REPORTS
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That Council:
1. Receive
on May 10, 2006 the 2005 Annual Report and 2005 Detailed Audit Reports of the
Office of the Auditor General; and,
2. Give
notice on May 10th of its intention to receive public submissions on
the Auditor General’s reports while sitting as Committee of the Whole at the
Council meeting of May 24th as per Section 47 of the Rules of Procedure.
Que le Conseil municipal:
1. reçoive le 10 mai 2006 le Rapport annuel 2005 et les Rapports de vérification détaillés 2005 du
Bureau du vérificateur général;
2. donne avis le 10 mai de son intention
de recevoir les soumissions publiques concernant les rapports du vérificateur
général alors qu’il siège en tant que Comité plénier à sa réunion du 24 mai,
conformément à l’Article 47 des Règles de procédure.
DOCUMENTATION
1. Auditor
General’s report dated 24 April 2006
(ACS2006-OAG-BVG-0001).
2. Extract of Draft Minute, 02 May 2006.
Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
24 April 2006 / le 24 avril 2006
Submitted by/Soumis par : Alain Lalonde, Auditor General/Vérificateur
général
Contact
Person/Personne ressource : Alain Lalonde, Auditor General
(613) 580-9602, Alain.Lalonde@ottawa.ca
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SUBJECT: |
OFFICE OF
THE AUDITOR GENERAL - 2005 ANNUAL REPORT AND 2005 DETAILED AUDIT REPORTS |
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OBJET : |
Bureau du
vérificateur général - RAPPORT ANNUEL 2005 ET RAPPORTs DE VÉRIFICATION
DÉTAILLÉs 2005 |
REPORT RECOMMENDATION
That the Corporate Services and Economic Development
Committee receive and refer to City Council for consideration on May 10, 2006, the 2005 Annual Report and 2005 Detailed
Audit Reports of the Office of the Auditor General.
Que le Comité des services organisationnels et du développement
économique reçoit et réfère au Conseil municipal pour considération le 10 mai,
2006, le Rapport annuel 2005 et les Rapports de vérification détaillés 2005 du
Bureau du vérificateur général.
BACKGROUND
On December 15, 2004, Council approved The Office of the Auditor General – Statute and Mandate, By-Law and 2005-2007 Audit Plan report which outlined the audits to be conducted during 2005. All of these audits, as well as a number of additional projects, have been successfully completed. The attached reports present the results of all work undertaken during 2005.
DISCUSSION
In accordance with the By-Law governing the Office of Auditor General, these reports are to be provided to Council via the Corporate Services and Economic Development Commmittee. As such, the reports are being tabled today for transmittal by Committee to Council for its meeting of May 10, 2006.
The first Annual Report of the Office of the Auditor General (OAG) of the City of Ottawa summarizes the activities of the OAG since its creation in late 2004. Included is a summary of the results of all audits completed during 2005 along with the management responses to all recommendations. Also included is the first Annual Report on the Fraud and Waste Hotline implemented in November of last year.
A second document contains the full detailed reports for all audits completed in 2005.
Part of the on-going work plan of the OAG will include a follow-up on audits conducted in the previous year. Follow-ups will be conducted in all areas where management has indicated its intention to implement recommended changes. In areas where management is in disagreement with the recommendations, the OAG will follow up on only those areas where Council has directed management to implement recommended changes. Follow-up on 2005 audits will be conducted after the first year of implementation of recommendations. It is intended that a separate report on these follow-ups will be provided to Council in 2007.
CONSULTATION
Consultation with management occurred throughout all audits, particularly in developing management responses to all recommendations.
FINANCIAL IMPLICATIONS
Any financial implications of the OAG’s recommendations are outlined in the management responses to specific recommendations.
SUPPORTING DOCUMENTATION
The following reports issued separately to Members of Council and on file with the City Clerk:
-2005 Annual Report of the Office of Auditor General
-2005 Rapport annuel du Bureau du vérificateur
général
-2005 Detailed Audit Reports of the Office of the Auditor General
DISPOSITION
The 2005 Annual Report and 2005 Detailed Audit Reports of the Office of the Auditor General will be referred to Council for consideration at the Council meeting of May 10, 2006.
The Office of the Auditor General will undertake to follow up on all 2005 recommendations where management has indicated its intention to implement recommended changes or where Council directs management to implement recommended changes.
OFFICE
OF THE AUDITOR GENERAL - 2005 ANNUAL REPORT AND 2005 DETAILED AUDIT REPORTS
BUREAU DU VÉRIFICATEUR GÉNÉRAL - RAPPORT ANNUEL
2005 ET RAPPORTS DE VÉRIFICATION DÉTAILLÉS 2005
ACS2006-OAG-BVG-0010
As the Auditor General’s 2005 Annual Report and 2005 Detailed Audit
Reports were not distributed with the Agenda, the Committee considered and
approved the following procedural motion.
Moved by Councillor M. McRae
That
the Corporate Services and Economic Development Committee approve the addition
of this item for consideration by the Committee at today’s meeting, pursuant to
Section 81(3) of the Procedure By-Law (being By-Law No. 2005-431).
CARRIED
Alain Lalonde, Auditor General, provided a brief overview of his
reports. A copy of his speaking notes
are held on file with the City Clerk. The
following summarizes the salient points made:
·
The City is performing well in a number
of areas but there are still opportunities for improvement;
·
More than 100 recommendations were
provided to management in the Audits (an unprecedented level of independent
scrutiny) and management has committee to implementing a large majority of
these recommendations;
·
Efforts should be made to make the
concept of centres of expertise work;
·
There is inconsistent use of the City’s
information system;
·
There is a need for greater focus on
performance measurement and monitoring;
·
Budget development and cost controls can
be improved;
·
More creative approaches are required to
deliver services without simply incurring more overtime and opportunities for
doing so are included the report;
·
The City needs to better manage the
standing offers process with a greater focus on price;
·
An important part of the work plan is
follow-up on the audits and these will be done in all areas where management
has indicated its intention to implement the recommended changes. Where there is disagreement, follow-ups will
only be done where Council has directed management to implement recommended
changes.
In response to questions from Mayor Chiarelli, Mr. Lalonde confirmed
the wording of the recommendation contained in his cover report was in
accordance with the By-law governing the office of the Auditor General. Namely, the reports would be tabled with
Corporate Services and would be considered by Council at its next meeting. Mr. Lalonde and his staff would be available
to answer questions of Council at that time.
The City Manager, Kent Kirkpatrick, then made a few comments. He thanked the Auditor General and his staff
for the reports tabled. He said the
audits represent a significant undertaking by the Auditor General and his staff
and also by scores of City staff involved in this audit work. Mr. Kirkpatrick said that although receiving
some of the findings of these audits was not a pleasant occurrence, working
with Mr. Lalonde and his staff on the recommendations has been a positive
experience for management. He stressed
that staff share a commitment to the need to examine the City’s operations and
identify opportunities for improvement, over and above what the City is doing
on its own.
Mr. Kirkpatrick went on to say the City is such a large and complex
organization to manage (the Auditor General notes it is one of the most
difficult municipalities in Canada to manage) and, it is hard to fix things
that are not known and easier to fix things before problems get big. The vast majority the recommendations are
supported by management and a key indication of how seriously staff take these
recommendations, is that work is already underway on many of them. A plan of action to make changes was
developed as soon as the Auditor General delivered his preliminary findings at
the end of 2005. Some examples of
actions taken include:
·
Tightening controls on overtime and
undertaking a comprehensive review of the management of overtime across the
City;
·
Completing the City’s evacuation plan;
·
Immediately increasing the weighting for
the pricing component in awarding of engineering contracts to 20%;
·
Reviewing purchasing activities related
to fleet services and developing appropriate standing offers and/or tenders;
·
Ensuring that all requests for proposals
contain a clause requiring bidders to certify that the rates offered are those
offered to their best most favoured clients and that this be subject to
verification;
·
Updating the City’s anti-virus software and
firewalls and revising the responsible computing policy.
Speaking to the Auditor’s recommendation regarding standardizing the
price component for professional services contracts at 30%, Mr. Kirkpatrick
noted the difference in view of the Auditor General and staff is significant
enough that staff are recommending Corporate Services and Economic Development
Committee have a full discussion on this issue. In this regard, he noted a benchmarking of best practises for
procuring engineering services has been initiated by InfraGuide and it is
staff’s opinion that their draft report (which is expected to be released soon)
should be used as a foundation document for Committee and Council’s review of
this issue.
In concluding his remarks, Mr. Kirkpatrick indicated that staff would
be responding to the specific findings, recommendations and inquiries when this
matter is before Council.
Councillor Cullen asked if there were any personnel actions undertaken
as a result of these documents coming forward.
Mr. Kirkpatrick noted there were a few instances identified in the
findings section by the Auditor General of instances where management had made
errors and in those cases, management has reviewed the instances and has
applied appropriate discipline where it was determined necessary.
Councillor Stavinga inquired about the possibility of Committee tabling
the audit reports for consideration at the next meeting, thereby permitting
members of the public to address Committee.
She asked if this would contravene the by-law governing the Office of
the Auditor General. Mr. Lalonde
responded his understanding of the by-law was that he reports to Council. However, he indicated if it were the will of
Council to alter this process, he would take such direction. He went on to note that Auditor Generals do
not normally answer questions from the public rather they would respond to the
public’s representatives (e.g. Councillors, Members of Parliament, etc.). Councillor Stavinga indicated her intent to
put forward a motion to table the matter to the next Committee meeting to allow
for public input.
In response to questions from Mayor Chiarelli, Rick O’Connor advised
that in accordance with the By-law governing the Office of the Auditor General,
it would be Council’s decision as to whether this report goes through a public
hearing process or any type of delay.
He opined therefore that the report should be referred to Council next
week for their decision.
Mr. O’Connor confirmed for Councillor Stavinga the Committee could recommend
to Council that the report be returned to Committee for public
consultation. Councillor Stavinga
indicated her intent to revise her motion to reflect this.
Councillor Chiarelli made reference to reports from the media, that
managers in the City had resigned as a result of using City computers to access
pornography. He asked the City Manager
and the Auditor General to comment on this matter. In response, Mr. Kirkpatrick pointed out there was nothing in the
Auditor General’s report that relates to findings of use of the City’s internet
for accessing pornography. He said
during the course of the audit, the Auditor General provided him with a short
list of individuals that had accessed URLs the Auditor General felt contravened
the City’s Responsible Computing Policy.
The City Manager pointed out the City does use an effective blocking
software that prevents access to sites prohibited by the Policy. Mr. Kirkpatrick indicated that Greg Geddes,
Chief Corporate Services Officer and IT Security investigated the URL
descriptions and determined that pornography had not been accessed through the
City’s portal. He stated he was not
aware of any member of management resigning nor was he aware of any involvement
by a Councillor. Mr. Kirkpatrick
stressed management takes these audits very seriously and indicated it was very
unfortunate a miss-statement in the media would overshadow such a productive
exercise.
Mr. Lalonde expressed agreement with the comments made by Mr.
Kirkpatrick in this regard. He confirmed
he had brought some instances to the City manager’s attention and any follow-up
action would be the responsibility of management.
Referencing the motion put forward by Councillor Stavinga, Councillor
Bellemare suggested it would be more appropriate to utilize the Committee of
the Whole process to hear public delegations.
Councillor P. Feltmate expressed her agreement with this
suggestion. Councillor Stavinga
indicated she would accept this as a friendly amendment.
Councillor McRae had questions with respect to the discrepancy of
overtime numbers provided by staff during budget deliberations and the numbers
used by the Auditor General in his report.
Mr. Lalonde indicated his intent (over the next few days) to look at
these numbers to determine where the differences are (e.g. it might be
explained by on-call pay, time-in-lieu of money, etc.)
In response to further questions from Councillor McRae, regarding the
recommendation coming out of the 2002 audit of OC Transpo (i.e. to cap the
number of hours that a person works bi-weekly), Mr. Lalonde indicated he would
review the details and follow-up with the Councillor.
Councillor Chiarelli questioned if in his examination of the issue of
overtime, the Auditor General had also looked at the health and safety
implications of excessive overtime. Mr.
Lalonde responded he had not looked at this aspect but indicated perhaps this
should be the subject of a separate audit.
Responding to questions from Councillor Cullen with respect to
overtime, Mr. Kirkpatrick noted as part of the 2006 budget approval, the issue
of overtime was discussed. At that time
management indicated it would be conducting an independent Corporate overview
of overtime usage. This review is currently
underway and Mr. Kirkpatrick anticipated the report would be coming forward to
Council in late summer or early fall.
Speaking to her motion, Councillor Stavinga noted the City Solicitor
had advised that according to the Procedure By-law, Council would have to give
notice that public delegations would be heard by Committee of the Whole at
their next following meeting (i.e. 24 May 2006). The Councillor advised she had amended her motion to reflect
this.
Moved by Councillor J. Stavinga
Whereas the
first Annual Report of the Auditor General and Detailed Reports of Audit
completed in 2005 are to be received by Corporate Services and Economic
Development Committee on May 2, 2006;
And
Whereas, the reports will be referred to City Council on May 10 in keeping with
the process set out in Subsection 11(1) of By-law 2005-84, being the by-law
governing the office of the Auditor General;
And
Whereas, there are more than 100 recommendations provided to management
representing an unprecedented level of independent scrutiny for Council, senior
management and the citizens of Ottawa;
And
Whereas, to ensure a comprehensive review of the report and to enable
participation of public delegations;
Therefore
be it resolved that Corporate Services and Economic Development Committee
recommend Council give notice on May 10th of its intention to
receive public submissions on the Auditor General’s reports while sitting as
Committee of the Whole at the Council meeting of May 24th as per Section
47 of the Rules of Procedure.
CARRIED
YEAS (8): Councillors A.
Cullen, R. Bloess, J. Stavinga, M. McRae, M. Bellemare, P. Hume, R. Jellett and
Mayor R. Chiarelli
NAYS (0)
The report as amended was the approved.
1.
That the Corporate Services and Economic Development Committee receive
and refer to City Council on May 10, 2006, the 2005 Annual Report and 2005
Detailed Audit Reports of the Office of the Auditor General; and,
2. Whereas the first
Annual Report of the Auditor General and Detailed Reports of Audit completed in
2005 are to be received by Corporate Services and Economic Development
Committee on May 2, 2006;
And
Whereas, the reports will be referred to City Council on May 10 in keeping with
the process set out in Subsection 11(1) of By-law 2005-84, being the by-law
governing the office of the Auditor General;
And
Whereas, there are more than 100 recommendations provided to management
representing an unprecedented level of independent scrutiny for Council, senior
management and the citizens of Ottawa;
And
Whereas, to ensure a comprehensive review of the report and to enable
participation of public delegations;
Therefore
be it resolved that Corporate Services and Economic Development Committee
recommend Council give notice on May 10th of its intention to
receive public submissions on the Auditor General’s reports while sitting as
Committee of the Whole at the Council meeting of May 24th as per
Section 47 of the Rules of Procedure.
CARRIED as amended