Corporate Affairs and Audit Committee

Transcription

1 931 Yonge Street Toronto M4W 2H2 Page 1 of 14 The of Toronto Community Housing Corporation met on, in the Main Floor Conference Room, 931 Yonge Street, commencing at 9:10 a.m. Committee Directors present: Jason Gorel, Chair Brian Kwan Councillor John Parker Regrets: none Additional Directors present: Also present: Ms. Catherine Wilkinson Marta Asturi, Assistant Corporate Secretary and Legal Counsel Paul Chisholm, General Manager, Access Housing Connections Inc. Michelle Haney-Kileeg, General Manager Ismail Ibrahim, Legal Counsel Len Koroneos, Chief Executive Officer (Interim) Brian Laur, Manager, Risk Management and Insurance Hugh Lawson, Director - Strategic Planning & Stakeholder Relations Roman Mesec, Senior Director of Strategic Procurement Josie Scioli, Chief Executive Officer, Housing Services Inc. Deborah Simon, Chief Operating Officer Michael Vear, Chief Internal Auditor Bora Zekavica, Director, Budget & Financial Services Mr. Jason Gorel, the Chair, called the meeting to order and Ms. Mirela Bolentiru served as recording secretary. DECLARATION OF CONFLICT OF INTEREST The Chair requested members of the to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. None were declared. CONFIRMATION OF AGENDA ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the unanimously approved the agenda as presented.

2 Page 2 of 14 MINUTES CONFIRMATION OF CORPORATE AFFAIRS AND AUDIT COMMITTEE MINUTES MARCH 30, 2012 The Committee had before it the draft Corporate Affairs and Audit Committee minutes for the March 30, 2012 public meeting. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the confirmed the above-captioned minutes subject to the following amendments and recommended they be forwarded to the Board of Directors for information. Page 4, Item 2 Referral Motion re: Review of Material Contracts : second paragraph, last sentence deleted and replaced with the following: o Mr. Michael Vear will review and propose a materiality threshold to this Committee for its consideration. Page 8, Item 5 External Audit Work Planning: Year Ended December 31, 2011 : Second paragraph, first sentence deleted and replaced with the following: o The Committee Chair noted that the accounting policy of dealing with certain joint ventures is proportionate consolidation, whilst for others the equity method is used. Third paragraph deleted entirely. Page 9, Item 5, in the first paragraph, last sentence the words is using replaced with will evaluate. Page 10, Item 6 Interim Quarterly Comprehensive, Consolidated Financial Statements : Fifth paragraph: o In the first sentence, the word what inserted between and and the services ; o The third sentence will read as follows: The process will be similar to the review of financial statements for public companies. Delete the rest of the sentence but it will not be for public release. o The last sentence deleted entirely. Sixth paragraph deleted entirely.

3 Page 3 of 14 Page 11, Item 8 Toronto Community Housing Financial Performance Report Q : Second paragraph: the first sentence retained and the remainder of the paragraph deleted. Third paragraph deleted entirely. Page 14, Item 10 Implementation of Auditor General Procurement and Employee Expense Recommendations: Status Report : Second paragraph, in the first sentence the word dialog replaced with dialogue. Business Arising from the Minutes and Action Item List The Committee Chair recommended that under Item 14 Toronto Community Housing Subsidiaries, the second action item with respect to the evaluation of the current status of all subsidiaries, management identify sooner than Q what subsidiaries might be wound up, in order to alleviate the workload. ITEM 1 Q QUARTERLY PERFORMANCE REPORT CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. The Committee Chair raised the issue of vacancy loss, reminding that management was asked to report back to the Committee on this matter. Management s report should include a better measurement of the vacancy loss, the number of units hard to rent (such as bachelor units), the reasons as to why those units are hard to rent and the target date as to when a report would be expected. Management informed the Committee that while the report is due in September 2012, staff will be aiming to present it at the July Committee meeting, due to the importance of the data and the impact on tenants and the Corporation. A question was raised with respect to Management Actions on page 5 of the attachment to the report, fifth bullet, as to whether a list with people waiting for accessible units has been developed. Management confirmed that such a list has been created and updated on an ongoing basis. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the unanimously received the report and recommended to forward the report with performance measures that are below target to the Board of Directors

4 Page 4 of 14 for information. ITEM OPERATING PLAN CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. The Committee Chair discussed the 2012 Operating Plan and asked for clarification with respect to page 11 of the attachment to the report, fifth line under Revenue, Other (Extraordinary) Revenue, as to whether it includes the proceeds from the sale of houses. He recommended that the funds from the sale of houses should not be mixed with other funds. Staff explained to the Committee that Other (Extraordinary) Revenue includes any irregular proceeds. The revenue amount included in the 2012 Operating Plan under this category includes the January sale of 44 Maclean and expected sale of Jarvis. Staff confirmed that Jarvis is a commercial property and that the City s approval for its sale has been obtained as its sale was directed by the City. The Committee Chair recommended that management ask the Shareholder (City) for clarification as to where the funds from the sale of Jarvis should be allocated. The Committee asked for clarification with respect to CMHC mortgages (50-year term) on three buildings that expired in March 2012 (page 3 of the attachment to the report). Staff explained to the Committee that there will be a switch in the funding formula and not a change of the program. By agreement with the City s Social Housing Unit, those buildings will switch from funding under the subsidy formula in the Operating Agreement to funding through the rent supplement program. There will be a small increase in overall net subsidies on the transfer of those buildings to the rent supplement program. The amount may change at the portfolio level, but not on a particular building. The Committee Chair noted that some mortgages are fixed while other mortgages are variable. He requested that management provide the Committee with the structure of the Corporation s debt in future reports. The Committee Chair requested that the revenues from the sale of the houses be included in Table A, which is the Net Operating Cash Flow. Staff explained to the Committee that the 2012 Net Operating Cash Flow is $71.1 million, which is about $5.6 million lower than the 2011

5 Page 5 of 14 budget. The extraordinary revenue from the sale of the houses will be added to the funding of investments. A question was raised with respect to the sale of the 44 Maclean house. Staff explained that the house was sold for $1 million and that resulted in net proceeds of $641,000. The Committee agreed that it is very important that the sale of the houses be a transparent process. The Committee Chair recommended that staff track the State of Good Repair reserve and report back on a quarterly basis on increases in the reserve fund, including an opening and closing balance position at each quarter. In response to a question raised, staff explained that a resolution from the Board of Directors is required with respect to the allocation of the funds from the Sparkle sale. The sale occurred in 2011, but it is not reflected in the 2012 budget. ON MOTION DULY MADE by Mr. Jason Gorel, seconded by Mr. Brian Kwan, the recommended that the funds from the sale of Sparkle and Jarvis Roller Rink be allocated to the State of Good Repair reserve fund. ON MOTION DULY MADE by Mr. Jason Gorel, seconded by Mr. Brian Kwan, the adopted the report and, subject to the following amendments, recommended that the report be forwarded to the Board of Directors to: 1. Approve the revised 2012 Operating Plan to give the CEO spending authority for 2012; and 2. Authorize the appropriate Toronto Community Housing officials to take the necessary action to give effect to the recommendations, subject to the following amendments: The revenues associated with the sale of real estate (houses) be taken out of the quarterly operating statements. Additional schedule to be provided quarterly on the State of Good Repair reserve fund, including an opening balance position at the beginning of the quarter and a closing balance position at the end of the quarter. The 2012 Operating Plan updated to show all sales in 2012 and reflect the above mentioned motion of reallocating the sale of Sparkle and Jarvis.

6 Page 6 of 14 ITEM 3 AUDITOR GENERAL S REPORT RE: RESULTS ON THE RECOMMENDATIONS OF THE 2011 AUDITOR GENERAL S REPORTS The had before it the abovecaptioned report from the Auditor General. The Committee Chair requested that management: Invite the Auditor General to present his report to the Board of Directors at its June 22, 2012 meeting. He further noted that 10 out of 41 recommendations are fully implemented, while 31 recommendations are still outstanding. The Auditor General follows up with his recommendations every 12 months. Provide timelines for the implementation of the outstanding recommendations as the report does not include any timelines, just the current status of the implementation of the recommendations. There was general discussion with management about the (i) process of management in implementing the Auditor General s recommendations and (ii) procedures followed by the Auditor General s office in assessing same. The Committee Chair requested that future reports from management show, using tracked changes, the modifications from the previous version presented to the Committee. ON MOTION DULY MADE by Mr. Jason Gorel, seconded by Mr. Brian Kwan, the unanimously received the report and recommended that the report be forwarded to the Board of Directors for review and information. The Committee further requested that management invite the Auditor General to present his report to the Board of Directors at its June 22, 2012 meeting. ITEM 4 ACCESS HOUSING CONNECTIONS Q PERFORMANCE REPORT CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. The Committee Chair requested clarification with respect to vacancy loss (page 25 of the attachment to the report) to better understand what objective is (i) set for Access Housing Connections Inc. (AHCI) and (ii) brought forward to the Committee. In response, management explained

7 Page 7 of 14 that AHCI has flexibility to adjust its portfolio by moving it across the city. The units are being vacated within 30 days of prior written notice. 50% of the vacated units are filled within 30 days. It reflects on AHCI s performance and ability to move across the city based on demand. Continuous improvement is noticeable in performance in General Wait List application acknowledgement and eligibility reviews, special Priority and Terminally Ill Application Assessment, timelines to process applications, staff training and fraud escalation processes, effective implementation of the new Housing Services Act (including the City Guidelines released by the City Manager on December 23, 2011), information system that calculates household subsidy in the Rent Supplement Program, and in customer service overall. The Committee Chair noted that the less desirable / hard-to-rent units, such as bachelors, require allocating more resources to fill them in long term. Management explained that they try to move away from the bachelor units. In response to a request from the Committee Chair, management presented the Committee with an update on the workflow process at AHCI. Management reported that there is a proactive housing access system. Their internal review is now completed and they know the stage where they are at. There have been identified issues and ways to resolve them, as well as places that require future changes. There has been identified an informed, larger process that includes: Investment in Information Management and Information Technology; recommendations have been prepared for AHCI s Board of Directors. Workflow and process review have been completed for Centralized Wait List Management, which will impact IM/IT decisions and support improved performance against targets. Improved customer service strategy for better understanding and to provide faster turnaround timelines. In response to a question raised by the Committee with respect to the nature of partnerships, management explained that AHCI has partnerships with different organizations dealing with violence and women. 40% of such applications received per year are approved. Management is reaching out to other organizations to increase awareness in this matter and to provide clarity as to what rules are applicable. The Committee noted that in Q4 2011, a response was received from the call centre within 72 hours, which is a long waiting time. The Committee requested an update on changes, if any, since Q to

8 Page 8 of 14 improve the wait time. Management informed the Committee that there is a decrease in work volume and in performance while applying a customer service strategy to determine the reasons why people contact AHCI. Councillor John Parker joined the meeting at 10:05 a.m. The Committee Chair noted a dialogue between AHCI and the Corporation is encouraged to discuss hard-to-rent units. The issue of combining such units has been raised, but it is not allowed. Management should consider this alternative and start applying it. The Committee Chair requested that AHCI report on the vacancy loss issue at the next committee meeting. In response to a question raised with respect to the legislative framework, management explained that there are some changes in the Housing Services Act, including the City Guidelines released by the City Manager on December 23, 2011 that impact AHCI. Management will have a system in place to address such legislative changes by Q Applicants are always informed in writing with respect to the status of their application and the way the eligible criteria are applied. The Committee Chair noted that people are not being serviced adequately, within reasonable timelines to alleviate the service issues. He further asked whether management plans to bring forward this matter to the Committee in Management confirmed that the intention is to present this matter to the Committee in 2013, showing that the service standards are met. The Committee Chair noted that to have the service standards met more resources are needed as well as potential changes in legislative criteria. In response to a question raised by the Committee with respect to the target date when all the performance indicators will turn into green, management informed the Committee that by the end of Q all performance indicators are expected to be yellow (for issues related to violence) and green (for internal transfer matters). Management is looking for sustainable performance and continuous improvement. The Committee Chair requested that management report back to the Committee on the status of performance indicators providing an update at the end of Q ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Councillor John Parker, the unanimously received the report for information.

9 Page 9 of 14 ITEM 5 MAY 22, 2012 LETTER FROM ACCESS HOUSING CONNECTIONS INC. TO MR. BUD PURVES The had before it the abovecaptioned letter from the Chair of the Board of Directors of Access Housing Connections Inc. Mr. Paul Chisholm explained that it takes longer than 120 days from the end of the fiscal year for the subsidiary to provide audited consolidated financial statements as required by the Shareholder Direction. Six months is a more reasonable timeline that can be met. June 30 th is acceptable to the City. The Committee is concerned about the letter and that the subsidiary has not yet complied with this mandatory requirement set out in the Shareholder Direction. Mr. Chisholm informed the Committee that in previous years, the subsidiary received an exemption and was not required to provide separate audited financial statements. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Councillor John Parker, the unanimously received the letter from the Chair of the Board of Directors of Access Housing Connections Inc. and resolved that the subsidiary s management: work to meet the June 30, 2012 deadline; and discuss with the auditor, PricewaterhouseCoopers LLP, to provide AHCI s financial statements in draft form at a Corporate Affairs and Audit Committee meeting to be scheduled next week. ITEM 6 REVIEW OF BOARD, CEO AND SENIOR MANAGEMENT EXPENSES Q CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Councillor John Parker, the unanimously received the report for information.

10 Page 10 of 14 ITEM 7 IMPLEMENTATION OF AUDITOR GENERAL 2010 PROCUREMENT AND EMPLOYEE EXPENSE RECOMMENDATIONS: STATUS REPORT CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. The Committee discussed the mechanisms that are in place to implement the Auditor General s recommendations contained in his 2010 reports on procurement and employee expenses and their timelines. Management informed the Committee that: An Enterprise Risk and Compliance Workgroup has been created, comprising senior staff, to lead, track and implement changes related to the Auditor General s recommendations. It meets on a regular basis. The Corporation has established a relationship with the City to address procurement for Information Technology. In the very near future, management will meet with senior procurement staff from the City to discuss this matter. An external procurement consultant (Procurement Law Office) has begun the risk assessment stage of the Corporation s procurement review. Taking into consideration best practices, the consultant s review will include: o A snapshot review; o Field study including meetings with people within the organization; o Developing a procurement playbook; o Drafting policies and procedures; and o Putting together a road map. The consultant s findings will be reported to the Board of Directors in late summer or early fall The Committee Chair recommended that management spend time now on planning to ensure that the Internal Auditor Department will have enough time to review the new procedures and processes that will have been implemented. Management informed the Committee that internal auditing process will occur in stages. The Committee Chair recommended that management discuss with the Chief Internal Auditor the timelines and staging of the process(s) and report back to the Committee at a future meeting.

11 Page 11 of 14 ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Councillor John Parker, the unanimously received the report for information. ITEM 8 IMPLEMENTATION OF AUDITOR GENERAL 2011 AUDIT RECOMMENDATIONS: STATUS REPORT CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. The Committee Chair recommended that the implementation of the Auditor General s recommendations be expedited, if possible. He further requested that management: Provide the Committee with the rationale with respect to what subsidiaries are needed and what subsidiaries are not needed. Provide charts of subsidiaries in future reports. ON MOTION DULY MADE by Councillor John Parker, seconded by Mr. Brian Kwan, the unanimously received the report for information. ITEM 9 FINANCIAL PERFORMANCE REPORT Q CAAC: The had before it the abovecaptioned report (CAAC: ) from the Interim Chief Executive Officer. ON MOTION DULY MADE by Councillor John Parker, seconded by Mr. Brian Kwan, the unanimously received the report for information. ITEM 10 INTERNAL AUDIT COMPLAINTS RECEIVED Q1/12 (JANUARY 1, 2012 TO MARCH 31, 2012) CAAC: The had before it the abovecaptioned report (CAAC: ) from the Chief Internal Auditor. The Committee asked for clarification with respect to the number of complaints received, ways of addressing them and seriousness of the complaints. The Chief Internal Auditor explained that: 241 complaints were received from the Fraud Hotline, 117 complaints were received from EasyTrac system and 47 complaints were received from other sources.

12 Page 12 of 14 The Investigations Unit of the Internal Audit Department ( Unit ) receives and reviews the complaints. The complaints may originate from staff, tenants, third parties, etc. The complaints received are subject to the staff s triage process, based on their evaluation and prioritization, using a cost recovery strategy that could bring additional revenue into the organization. All complaints are tracked by the Unit. By the end of Q2 2012, it is anticipated that there will be statistical data available related to the number of investigations that have been triggered so far, the number and type of actions taken subsequent to investigations and the rate of success. Staff is now looking at the 2010 and 2011 data to align it with the current system in use. The Chief Internal Auditor recommended that the frequency of reporting should be on an annual basis rather than quarterly. There were concerns with respect to the volume of complaints received across the Corporation and the necessity of a system capable to record and address all those complaints. The Committee Chair noted that: Generally, in the private sector, a whistle blower hotline would generate perhaps a few calls per year. For the Corporation, the number of whistle blower calls has far exceeded this. Due to the volume of complaints received, management and staff are resource challenged to review them all. Therefore, the Unit is developing a system to triage and prioritize the matters to be reviewed. Staff performance complaints are complaints related to a performance issue about a staff member. Such complaints are not reviewed by the Unit; they are forwarded to the appropriate operating unit for follow up. The Committee Chair recommended that management focus on fraud and ethics, and report back quarterly to the Committee on complaints received. The Chief Internal Auditor will provide data on dropped calls at a future meeting. The Committee Chair requested clarification with respect to the nature of complaints. The Chief Internal Auditor explained that the complaints received that are neither fraud nor ethical related are redirected by the call centre to EasyTrac line.

13 Page 13 of 14 The Committee recommended that statistics related to tenant complaints be sent to the Tenant and Community Services Committee on an annual basis. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the unanimously received the report for information. ITEM 11 INTERNAL AUDIT: 2012 WORK PLAN STATUS UPDATE CAAC: The had before it the abovecaptioned report (CAAC: ) from the Chief Internal Auditor. The Committee Chair noted that there are not enough resources for allocation to all the activities included in the work plan. He further recommended that management revisit the budget for better allocation of the resources and report back to the Committee with respect to other resources that may be available. ON MOTION DULY MADE by Councillor John Parker, seconded by Mr. Brian Kwan, the resolved to: receive the report for information; and provide the Chief Internal Auditor with guidance with respect to prioritizing items listed on the work plan. CLOSED MEETING PROCEEDINGS The resolved to meet in closed meeting at 11:24 a.m. to consider items A to J. PUBLIC PROCEEDINGS At 12:40 p.m. the Committee Chair announced the resumption of the public proceedings and the public meeting reconvened at that time. ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the ratified the actions authorized during the closed meeting.

14 Page 14 of 14 TERMINATION ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the meeting of the was terminated at 12:40 p.m. Secretary Chair,