Presentation to the Audit Committee February 27, 2015

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Transcription:

Presentation to the Audit Committee February 27, 2015 Auditor General s Office: 2015 Operating Budget Request, 2015-2024 Capital Request and Plan, and 2015 Audit Work Plan Beverly Romeo-Beehler, CPA, CMA, B.B.A., JD Auditor General

Mandate of the Auditor General The Auditor General is responsible for assisting city council in holding itself and city administrators accountable for: the quality of stewardship over public funds and for the achievement of value for money in city operations 2 s.178(1) COTA

3 Three Lines of Business

AG Office Organization Chart 29.5 FTE s Auditor General Admin Support Staff (3 FTE s) Audit Unit Director (2 FTE s) Forensic Unit Director (1 FTE) Senior Audit Manager (7 FTE s) Senior Investigator ( 2 FTE s) Audit Manager (10.5 FTE s) Auditor (1 FTE) Audit Manager (1 FTE) Auditor (1 FTE)

Key messages 1. Results The Office Adds Value 2. Budget Requests Are Reasonable 3. Opportunities to Provide More 5

Results: 2014 Reports 14 Audit reports totalling 110 recommendations - Examples include: Sony Centre Improving the Quality of Building Inspections Bus Maintenance Curbside Collection Contract Strengthening Oversight of Social Housing Programs Telecommunications Continuous Controls Monitoring Reports 12 Other reports - Examples Include: Fraud & Waste Hotline Annual work plan Annual recommendation follow-up report 6 AGO Benefits report

2014 work status Facilities Management Security and Safety Procedures TTC Vehicle Maintenance Non-Revenue Vehicles & Fuel usage Expenditures on Consultants Operational Review of Build Toronto Operational Review of Invest Toronto Divisional Purchase Orders Controls over the Acquisition and Use of Major Software Licences Human Resources Review of Organization, Learning and Workforce Planning Property Tax Billing and Collection Process (Underway) Toronto Parking Authority (Underway) 5 year City-wide Risk Assessment (Underway) Those shown in Blue will be presented to the Audit Committee in the spring 2015 7

Return on Investment: 2010-2014 Total one-time and projected 5-year savings since 2010 $236.8 Cost of AG Office since 2010 $19.9 0 50 100 150 200 250 $ Million For every $1 invested the return is $11.80 8 Average $47 million/year

Operating Budget Request Being Frugal 2015 Budget Request ($000s) 2014 Council Approved Budget ($000s) Difference 2015 over 2014 ($000) Percent (%) Change Salaries 3,634.2 3654.2 (20.0) (0.54) Benefits 926.3 927.1 (0.8) (0.08) Gapping (39.5) (39.5) 0.0 0.0 Sub Total 4,521.0 4,541.8 (20.8) (0.62) Services, Materials, Supplies & Other 195.6 143.3 52.3 36.5 Total $4,716.6 $4,685.1 $31.5 0.67 9

2015 Gross Expenditure By Category Budget Request Equipment, Materials and Supplies $24,071 0.5% Services & Rents $142,383 3.0% Insurance & Interdepartmental charges (Computer Hardware & Oper. Support, etc.) $29,113 0.6% Payroll $4,520,927 95.9%

Approved positions 50 45 40 Long Term Illness Gapping Staff Only for last four years 35 30 1.3 1 1 2 2 25 48 20 15 10 20 21 25 26 26 26 26 28 29 29 29 29 29 27.7 26 27 28.5 5 0 11

Benchmarking of Audit Costs 2014 Municipal Budget (in $000s) 2014 Audit Budget (in $000s) Audit Budget as a % of Municipal Budget $ $ % Canadian Jurisdictions Toronto 11,176,154 4,685 0.04 4 th largest City Vancouver 1,177,500 720 0.06 Ottawa 2,916,200 1,711 0.06 Calgary 3,679,300 2,236 0.06 Halifax 845,000 868 0.10 Edmonton 2,075,800 2,195 0.11 Quebec City 1,333,800 1,465 0.11 Montreal 4,895,400 5,951 0.12 Laval 761,200 1,295 0.17 U.S. Jurisdictions Chicago 8,672,100 5,769 0.07 5 th Largest City Austin 3,270,500 2,677 0.08 Dallas 2,810,400 2,391 0.09 Los Angeles 7,685,500 6,924 0.09 3 rd largest City Phoenix 3,502,500 3,944 0.11 San Jose 2,912,600 3,298 0.11 Detroit 2,439,500 2,960 0.12 12 San Diego 2,795,300 3,889 0.14 San Francisco 7,915,900 13,672 0.17

Percentage 4 th Largest City 5 th Largest City 3 rd Largest City Audit Budget as a Percentage of Municipal Budget - 2014 0.17 0.17 0.14 0.06 0.06 0.06 0.1 0.11 0.11 0.12 0.07 0.08 0.09 0.09 0.11 0.11 0.12 0.04 Canadian Municipalities US Municipalities 13

Summary of Capital Budget Request Balancing frugality and functionality 2015-2024 Capital Budget Request and Plan 2015 Capital Request ($000s) 2016 Capital Plan ($000s) 2016-2019 Capital Plan ($000) 2015-2014 Capital Plan ($000) Fraud and Waste Complaint Management System Audit Management Software 451.0 114.0 565.0 565.0 0.0 130.0 130.0 130.0 Sub Total 451.0 244.0 695.0 695.0 14

2015-2024 Capital Budget Request Fraud and Waste Complaint Management System 1,100 allegations/year 12 years old, split database, being decommissioned Audit Management Software Industry uses automated working papers 89% of staff hired in the past six years left an automated audit management software environment Better security, better collaboration, increased efficiencies over time, more effectively work at other sites 15

Sample of new 2015 Projects being considered (Project selection & scope depends on results of the risk assessment) Lifecycle management paving contracts (TTC, Toronto Water & City Contracts) Information Technology network vulnerabilities & access controls Major Information Technology projects Enterprise-wide risk management Long-term disability (LTD) approval and payment processes Toronto Water Billing Collection Shared Services 16

Sample of Audit Backlog Emergency Preparedness & Response Management Major Engineering and Construction Contracts Court Fine Collection Fire Services Space Utilization Optimization Across the City Affordable Housing Progress in Implementing the Senior s Strategy IBMS Revenue Controls Facilities Management - Custodial Care Sewer Infrastructure Management & Basement Flooding Toronto Zoo

Opportunity Value Proposition Balancing frugality with investing in the future 4 Positions 6 Positions 3-4 additional projects or Forensic Audits 6 additional projects or Forensic Audits Full year cost $534K Full year cost $836K Conservatively, return on investment $5:1 Conservatively, return on investment $5:1 2015 Part year budget cost $267K 2015 Part year budget $418K 2016 Annualized impact $267K 2016 Annualized impact 418K 18

Recap Adding value Budget Stable Operating Budget Request 2015 2015 Capital Request is the first ever capital request Opportunity to increase value with increased investment 19