Presentation Annual Report Audit 2015

7/24/2019 Presentation Annual Report Audit 2015

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Annual Report

Presentation to AuditCommitteeNovember 26, 2015

Office of the Auditor General


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OAG Annual Report: Audits

AUDIT OF 3-1-1 CONTACT CENTRE AUDIT OF ACCOUNTS PAYABLE

AUDIT OF INFRASTRUCTURE SERVICES DEPARTMENT ADMINISTRATION

TECHNICAL

AUDIT OF IT RISK MANAGEMENT

IT SECURITY INCIDENT HANDLING AND RESPONSE

AUDIT OF THE MACKENZIE KING BRIDGERESURFACING

AUDIT OF SPECIES AT RISK

AUDIT OF WINTER OPERATIONSCAPACITYPLANNING AND PERFORMANCE MEASUREMENT


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OAG ANNUAL REPORT: AUDIT OF 3-1-1CONTACT CENTRE

3-1-1 agents are courteous, knowledgeable and service-oriented clients aregenerally satisfied with the service

Opportunities to better support the 3-1-1 agents by improving the informationin the knowledge base that they rely upon

Scheduling of agents could be improved

New scheduling system could be better used to eliminate unnecessary manualactivities

3-1-1 service standard is lowest of other municipalities

This standard not approved by Council

Semi-annual performance report is misleading

Wait times are longer than might be expected

Potent ial s avings

Recommendations to automate a number of processes could createefficiencies for 3-1-1 operations

Management agreed with all 34 recommendations


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OAG ANNUAL REPORT: AUDIT OF ACCOUNTSPAYABLE

Controls over the accounts payable process are adequate,

Sample invoices: 20% were paid late and 5% missed discounttotaling a potential savings loss of $603,437

Application controls within MarkView and SAP are operatingeffectively

Increase use of application controls

Systems can be configured to search for duplicate payments


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OAG ANNUAL REPORT: AUDIT OF ACCOUNTSPAYABLE

Potent ial Savings

Use receipt date rather than the invoice date to increasediscounts taken

Tracking and sharing penalties paid for late payments wouldallow the City to be aware of money that is being lost as a

result of inefficient/ineffective internal processes Further opportunities to leverage existing technology to

prevent duplicate payments

Opportunities for potential savings through enhancedanalytics/monitoring tools



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OAG ANNUAL REPORT: AUDIT OFINFRASTRUCTURE SERVICES DEPARTMENT

ADMINISTRATIVE MANAGEMENT

No budget management for capital expendituresplanned for the year

Could assist cash-flow management and improveover-sight and control of projects

Current process of quarterly reviews of theoperating budget status could be improved bymonthly reviews


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OAG ANNUAL REPORT: AUDIT OFINFRASTRUCTURE SERVICES DEPARTMENT -

ADMINISTRATIVE MANAGEMENT

Overtime, sick leave and vacation were generallyfound to be well managed

Opportunity to automate some paper forms

Minor issues found with ISDs training processes



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TECHNICAL MANAGEMENT

Project management and inspection processes in place

Those processes not consistently applied

Areas requiring further attention Project schedules

Budget control

Communications

Quality assurance

Project reviews

Issues identified in previous audits Responsibility for redesign costs

Recovery of change orders due to errors

Exercising of contract liquidated damages Project oversight and others


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TECHNICAL MANAGEMENT

Potential Savings

Modify procedures and/or the contract terms

requiring a reduction of 10% on the rates will delivera saving of $350,000 annually

Using more in-house construction inspectors



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OAG ANNUAL REPORT: AUDIT OF IT RISKMANAGEMENT

IT-related risk is significant

Low maturity level of most City departments for IT RiskManagement due to Governance and Leadership issues

Comprehensive Governance component of an InformationTechnology Risk Management (ITRM) Framework notdeveloped

Some components of an effective ITRM Framework embeddedin the ERM

Potential vulnerability of the IT risks could have significant

impacts on the Citys business lines


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Little flexibility for required adjustments to the ITSinfrastructure budget and/or other departmental budgets forhigh priority

Decentralized approach used to fund IT projects and absenceof a City-wide priority ranking system impacts the effectiveness

of CITMTs authority relative to its mandate Decisions made regarding IT investments/expenditures may

not be aligned with overall corporate priorities and/or riskmanagement objectives

The reporting structure to and from the CIO is not consistent

with best practises


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IT issues and priorities that are critical to City-wide objectivesdo not necessarily rise to the top

In some business units, people who have little or no technicaltraining are being tasked, under the ERM Framework, with the

identification of risks and/or related mitigation strategies The process of identifying IT risks is first impeded by the

absence of a full inventory of the IT universe across the City(applications, business owners, networks, interdependencies,etc.)

No complete risk register that is developed with input from

trained and qualified IT professionals


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Potent ial Saving s

Overall efficiencies and improved direction, advice and reporting of ITactivities on a City-wide basis will lead to economies of scale andbetter decision making for IM/IT related decisions

Improved identification, assessment and mitigation initiatives will

protect the City against potential system failures or security breaches,including cyber-attacks, which could interfere with business activities

Necessary changes to upgrade/replace the Citys infrastructure and toadequately increase the Citys IT security protection will requiresignificant investment in coming years.



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OAG ANNUAL REPORT: AUDIT OF THEMACKENZIE KING BRIDGE RESURFACING

Part of the OC Transpo Transitway

Also part of the NAC parking garage, leakage a chronicproblem

These factors affected conditions of pavement

City had to mill and repave portions of the bridge annually

2004 study of options concluded that most economicalsolution: Annual pavement repairs for 30 years

Mill and repave the entire surface every 15 years

Replace the waterproofing and asphalt every 30 years

By 2007 staff worked to find a different approach


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OAG ANNUAL REPORT: AUDIT OF THEMACKENZIE KING BRIDGE RESURFACING

Staff decided to remove the waterproofing and asphalt, and repave

using a new product Total cost of removing the waterproofing for the entire length of the

bridge and repaving was $625,000 in 2008

In 2009 asphalt had to be removed and repaved using conventionalwaterproofing and asphalt at a cost of $718,000

A portion of the cost of the 2008 and 2009 repaving contracts (a totalof $1,243,000) could have been avoided if the City had continued withthe program of milling and repaving only those sections of the bridgepavement requiring repair in accordance with the recommendations ofthe 2004 report

The decision to repave using a new product was made without properdesign and testing, and without following alternative evaluation

methods that were formalized in the guidelines for structure renewal There were 38 findings



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OAG ANNUAL REPORT: AUDIT OF SPECIES ATRISK

Good understanding of the requirements to comply with theregulation

Protocols and official documents to guide City operations

Operational improvements are required

Mitigation measures by Public Works department are not specificenough for maintenance activities

For major infrastructure projects, there is no protocol to review theenvironmental and legislative contexts before starting the workon-site.

Up-to-date list of species at risk in the Ottawa area, but it is notavailable to all staff members having to deal with such species

Improvements to the communication process are required


OAG ANNUAL REPORT AUDIT OF WINTER


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OAG ANNUAL REPORT: AUDIT OF WINTEROPERATIONSCAPACITY PLANNING AND

PERFORMANCE MEASUREMENT

City Council approved Maintenance Quality Standards (MQS) in Mayof 2003

MQS are higher than Provincial Minimum Maintenance Standards

MQS not been reviewed or assessed for financial impact since theywere set

City has a high ratio of owned to contracted equipment The City has not conducted a full analysis to determine the optimum

mix of internal and external services to achieve the highest level ofeconomy and efficiency for these services

There is a risk that City staff are spending time on tasks that areavailable at lower cost and therefore is paying more than necessary

for winter control services

OAG ANNUAL REPORT AUDIT OF WINTER


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OAG ANNUAL REPORT: AUDIT OF WINTEROPERATIONSCAPACITY PLANNING AND

PERFORMANCE MEASUREMENT

Potent ial Savings

The demand for these miscellaneous activities has not beenquantified to clearly demonstrate the need and legitimacy

High likelihood that these activities could be reduced to lowercosts

City could conduct a review to ensure the City has the optimalmix of internal and contracted services for Winter Operations

Review of and changes to current MQS to bring them in linewith provincial standards

Better controls over receipt and use of materials



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OAG ANNUAL REPORT: COMMON THEMES FROMAUDITS

Lack of financial analysis used in decision-making

Full efficiencies are not realized or evaluated whennew technology implemented


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OAG Annual Report

Reporting going forward: Report annually on audit reports completed

during the year

Follow-up audits will be presented as they arecompleted

Fraud and Waste Hotline report will bepresented annually


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AcknowledgementWe wish to express our appreciation for the continued

cooperation and assistance afforded the audit teams bythe City Manager, management and staff.

Staff of th e Off ice of th e Aud itor General

Suzanne Bertrand

Sonia Brennan

Alina Chimet

Ken Hughes

Ed Miner

Janet Onyango

Louise Proulx

Lise Renaud

Margaret Sue


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Questions

Thank you

Presentation Annual Report Audit 2015

Documents

Transcript of Presentation Annual Report Audit 2015