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HomeMy WebLinkAboutJune 18, 2001 :'\-{ OF PIC~ c} 'I~ 1#"\ ~œ~ ~ Audit Committee Meeting Minut£:s Subject to Adoption Present: Councillor Maurice Brenner - Chair Mayor Wayne Arthurs Councillor Mark Holland Councillor Dave Ryan Tom Quinn, Chief Administrative Officer Gil Paterson, Director of Finance & Treasurer Kristine Senior, Manager, Accounting Services Debbie Kearns, Committee Coordinator Others In Attendance: Jacqueline Smart A meeting of the Audit Committee was held on Monday, June 18, 2001 at 4:00 p.m. in the Board Room of the Pickering Civic Complex. The following matters were discussed: 1. Election of Chair of the Committee for the term to expire on November 30, 2003 Moved by Councillor Holland That Councillor Brenner be elected Chair. Moved by Councillor Ryan That Councillor Ryan be elected Chair. A vote was taken and Councillor Brenner was elected as Chair of the Audit Committee for a term to expire on November 30,2003. 2. Adoption of Minutes of Mav 23, 2000 Moved by Councillor Holland that the Minutes of the May 23, 2000 Audit Committee Meeting be approved. CARRIED ..../2 --2-- Councillor Ryan commented on the delay in receiving the Draft Request for Proposal Procedures. Gil Paterson, Treasurer, advised that the revised target date for the draft procedures is September 1 S\ 2001, but Tom Quinn, c.A.O. suggested that this date would not be possible and that a date would be set next week after the Senior Staff Retreat. Councillor Ryan stated his concern that this item, requested back in 1999, has been and is still being delayed. 3. Discussion of the Millennium Account Councillor Holland noted that under Account 4246 (Millennium Account) Capital Items a number of purchases were made. He questioned if these capital items have been returned to the City, suggesting that they are the property of the City and should be returned. Councillor Holland suggested that action be taken on this item and in particular, if children's vehicles were auctioned off, to whom and when, as well as the location of the beer wagon. Tom Quinn advised that he doesn't know of any paper work on the children's vehicles but understands that they were auctioned off. It was suggested that a letter be sent requesting the return of all capital items purchased under Account 4246. Mayor Arthurs suggested that the Chair of the Millennium Committee be contacted first asking status and disposition of these items. Mr. Patterson will prepare and send a letter. Councillor Ryan questioned if the Audit Committee were aware of the Millennium 2000 account. Councillor Brenner advised of the Committee's involvement. Councillor Brenner noted that, on behalf of the Audit Committee, the external auditor was requested to conduct an external audit and full review of the account in 1999 and 2000. Councillor Ryan suggested that the Committee become aware of the history of this item, become proactive, set out guidelines and document the process for the assigning of authority by Council. Councillor Holland suggested that procedures be written, setting out parameters of purchasing capital assets. . .../3 --3-- Tom Quinn, advised that he will review with the Director of Finance how the committee was struck, its financial account and how the signing authority was put in place. Staff will consult with the City Clerk to obtain copies of all resolutions directed by Council on this matter. Councillor Ryan suggested that this item be dealt with as a case study by the Committee, ensuring the involvement of staff. Tom Quinn will deal with this item over the summer and provide a report to the Audit Committee early fall. 4. Discussion of Account 2113-2399 (Outside A2encv Services-Councillor's Office) Councillor Ryan stated his concern with respect to payments for outside agency services. In particular, cheques are issued for reimbursement to the Councillor and/or direct to the service provider. Councillor Brenner provided a history of this account and explained that having the two options of payment was a direct result of the Auditor, who had stated, that if cheques were being made out to an outside individual, a T4 would have to be prepared for that individual as they could be seen as being an employee of the Corporation. Gil Paterson advised that either process is acceptable as long as invoices are accompanied by proper documentation. Mr. Paterson will provide his notes on this matter as it pertained to discussions with the Auditor. Councillor Ryan stated that signatures should be required on invoices or contractual letters. He further suggested that procedures be followed and standardized practice should be in place. Mr. Paterson advised that this was the process being followed however acknowledged that some form of standardization was necessary. Gil Paterson will draft a process to be followed which will be brought back to Committee for approval in September. Councillor Ryan further stated his concern with respect to family members on City Payroll for outside agency services and questioned the need for additional secretarial assistance. He questioned if it would not be more appropriate for the Clerk or Supply & Services to be approached if outside services are required. ..../4 --4-- Mayor Arthurs advised that this account was provided for outside assistance to perform work outside of the scope of regular secretarial duties. He further advised that this account evolved from the budget process not by by-law. 5. Municipal Performance Measurement Pro2ram Gil Paterson advised that this package has been included for information purposes. Councillor Holland suggested that bench marks and internal criteria be set and sent back to the Province. Gil advised that the Province has already set down criteria and that the deadline is June 30th. Tom Quinn directed that once the report is complete it should be sent to Council for information. Councillor Brenner advised that normally a draft would be forwarded to the Audit Committee then to Council. 6. Public Sector Account and Auditin2 Board Requirement This package was included for information purposes only. 7. Year 2000 Audit & Annual Financial Statements A draft copy of the financial statements were distributed. Copies have not yet been forwarded to the Auditor. 8. Request for Proposal for Auditors Selection This report will be going to Council at their meeting of June 25, 2001. 9. Other Business a) Councillor Ryan questioned if this Committee has a mandate and requested background documentation. (Documents enclosed for all members) b) Councillor Ryan questioned if their is a schedule for Audit Committee Meetings. He suggested that a schedule be prepared and if a meeting is not required then it could be cancelled. The Treasurer will sent the agenda for future Audit Committee Meetings. 10. Adjournment The meeting adjourned at 5:35 p.m. ,t • INEROFFICE MEMORANDUM COUNCILLORS' OFFICE if TO: Mayor Arthurs, DATE: March 6th, 1997 4 Members of Council & Department Heads FROM: Debbie Kearns, Coordinator of Council Services SUBJECT: Minutes of the 1997 Budget Meetings Please find attached, for your information, copies of the Minutes of the 1997 Budget Meetings held on February 20th and February 28th, 1997. Debbie Encl. ij • 1997 BUDGET RECOMMENDED OPTIONS • • Recommended options to reduce the net increase of$81,983 which resulted from the February 20, 1997 budget meeting:- (a) Delete from Account 2191 -Elections -the rental of the vote tabulating equipment$75,802 and increase the Transfer from Reserves 1910 (Reskilling and Redeployment) by $6,181 to fund part of the seminar and education expenditures reported in the departmental operating budgets. This option would leave a balance of$77,719 in the Reserves for Reskilling and Redeployment as at December 31, 1997. (b) Increase Account 1910 - Transfer from Reserves (Reskilling and Redeployment) by an amount of$81,983 to fund almost all of the seminars and education expenditures reported in the departmental operating budgets. This option would leave a balance of$1,917 in the Reserves for Reskilling and Redeployment as at December 31, 1997. (c) Delete a part ($81,983) of the $87,000 Transfer to Reserves (Contingency). This $87,000 was made to cover 1997 increases (Firefighters) due to the end of the Social Contract. This option would leave only $92,017 in the Reserves (Contingency) to cover any negotiated increase for the Firefighters for 1996 and 1997. (;d) Reconsider and decrease the various provisions included in the 1997 budget submission for positions not currently filled - as follows:- (1) 2113-2399 Secretarial $12,000 - 12 month provision at Services $1,000 per month. 2) 2121- C.A.O. $113,925 - 12 month provision at 1100/1400 $9,495 per month. (3) 2192- Econ. Dev. Officer $20,825 - 6 month provision at 1100/1400 $3,470 per month. (4) 2240- Assistant Training $49,490 - 9 month provision at 1100/1400 Officer $5,500 per month. (5) 2821 Director of Human $61,250 - 8 month provision at Resources $7,655 per month. iE - 7 - The meeting was re-convened by Mayor Arthurs at 9:40 a.m. on February 28th, 1997. PRESENT: ,,Mayor Arthurs Councillor Brenner Councillor Dickerson Councillor Johnson 1[Councillor Pistritto Councillor Ryan ;Councillor Senis Staff: T. Quinn - Executive Director Operations I. Berrey - Temporary Acting Treasurer/Collector J. Hodgson - Executive Assistant D. Kearns - Coordinator of Council Services Moved by Councillor Johnson that Option A of the memo dated February 27th, 1997 ,from the Executive Director Operations and the Temporary (Acting) Treasurer-Collector regarding the 1997 Proposed Budget be approved. LOST 2191 ELECTIONS Moved by Councillor Senis that Account 2191 (Elections) be increased by $7,500 to reflect the purchase of 3 additional Vote Tabulators. CARRIED 2195 GRANTS TO ORGANIZATIONS & INDIVIDUALS 1 Moved by Councillor Senis that Account 2195 (Grants to Organizations & Individuals) be increased by $25,000 to reflect a donation to the Ajax/Pickering General Hospital. LOST • \ f, - 8 - Moved by Councillor Pistritto that a contribution of $25,000 be divided between the Ajax/Pickering General Hospital, Markham/Stouffville General Hospital and Scarboro Centenary Hospital. LOST II Moved by Councillor Ryan that Option D of the memo dated February 24th, 1997 from the Executive Director Operations and the Temporary Acting Treasurer-Collector regarding the 1997 Proposed Budget be approved as follows: #2 Account, 2121- 1100/1400 - CAO be amended to a 9 month period, #4 Account 2240-1100/1400 - Asst. Training Officer be amended to a 6 month period and #5 Account 2821 - Director of Human Resources be amended to a 6 month period. The remaining outstanding amount should be taken from Option B of the February 24th, 1997 memo. Moved by Councillor Pistritto that the above motion be divided. CARRIED Option D CARRIED Option B CARRIED LA memo from the Manager of Information Systems concerning Property System Assessment Tape Data was distributed and accepted by Council. Moved by Councillor Johnson that the 1997 Budgets go before the Executive Committee on March 24th. CARRIED The meeting adjourned at 11:10 a.m. 'N Page 2 TOWN OF PICKERING — g N 1997 BUDGET "� ° "m m a 2113 GENERAL GOVERNMENT - COUNCIL 2394 Public Relations and Special Events $10,000 4144 •,� ii An allocation of $10,00.0•has been provided to include4,6 the provision for luncheons, floral tributes, pins, flags, 1 plaques, etc. and is a reflection of what was expended from this accounts in 1996. f2395 Memberships $6,500 4a f , This account provides for membership in the IL. 1 Association. of Municipalities of Ontario which is 61. expected to cost $6,500 in 1997. °^-, 1 l 2399 Outside Agency Services $12,000 An allocation of $12,000 has been provided ($2,000.for each Councillor) to provide secretarial/typing services 44 .' : ..; $2,500 5300 Stationery & Office Supplies 'l An allocation of $2,500 has again been provided for stationery and office supplies which is a reflection of 1996 expenses. E,,,' a $1,380 �1 1 t 5398 GSA Exempt6;6, This account.is 3% of all operating expenditures except � •i Salaries and Employer contributions and computes to ; $1,380. ' `� I izV 1 INTERNAL AUDIT POLICY li li I. Policy • 'The Corporation of the Town of Pickering will maintain an internal audit function to provide audit services to Council and to management. IL Purpose of the Policy • jjThe main purpose of the internal audit policy is to provide reasonable assurance to Council and to management that: 1. financial management controls are satisfactory or improvements are implemented where necessary; ij 2. financial resources are managed effectively and efficiently; 3. financial activities are carried out in compliance with the applicable legislation, policies and ii procedures; and 4. financial management reporting systems and processes needed to provide accountability are satisfactory. _ III. Organizational Independence of the Internal Auditor The internal auditor has complete independence in order to permit the rendering of impartial and II unbiased judgments essential to proper audit conduct. Ii This is achieved through, 1. independent reporting —the internal auditor reports as necessary to the Town Manager, II Council,the external auditor, or any one or more of them; and 2. unrestricted access —the internal auditor has generally unrestricted access to records. documents,personnel and facilities in carrying out his or her responsibilities. II IV. Responsibilities under the Policy 1. The internal auditor is responsible for: (a) developing an internal audit plan to provide adequate internal audit coverage for the Town; II (b) conducting internal audit work in accordance with acceptable standards; • {P' :54� Internal Audit Policy (continued) Paget flI (c) conducting planned internal audit projects, reporting to Council and to management the conclusion,findings and recommendations on a timely basis after each audit; (d) making effective and efficient use of resources to provide quality internal audit services; it I (e) reporting to Council on a regular basis the activities of the internal audit function and audit observations; ii (f) advising management on issues respecting audit, risks, control and compliance, ii especially at the design stage of systems and program development; (g) acting as a liaison between the Corporation and its external auditors, and providing assistance to its external auditors; (h) monitoring implementation of approved corrective action in response to internal or external audit reports; and (i) carrying out special assignments as directed by the Council or the Town Manager. li for: 2. The Town Manager is responsible (a) ensuring that the Corporation has an internal audit program that follows this Policy; and (b) providing the necessary support and independence for the internal audit function. 3. Each member of senior management(i.e. department head)is responsible for: full co-operation to the internal auditor to enable the auditor's responsibilities (a) providingp P to be carried out; (b) keeping the internal auditor apprised of major system changes, risks and fraud cases, actual or potential, in his or her area of responsibility; (c) considering audit reports and providing written responses to them within 30 days, including corrective action taken or planned, regarding the audit issues with an implementation timetable; and (d) implementing approved corrective action within the committed timetable, and reporting through the internal auditor to Council or to the Town Manager, as necessary, on the status of implementation. L:ltthnAtf6100`misc inaudpoLdoc I � II iR li e r, y•-4,1,'''1,';'-,-;-,.';-','','-' "• h. 165 ; t.,. 11111 RESOLUTIONS Resolution#208/95-See Appendix#1 { Moved by Councillor Johnson II Seconded by Councillor Brenner • That the Report of the Executive Committee dated September 27, 1995 be adopted 11 � 7 ;. i' s CARRIED ' • >'� y. Resolution#209/95 Moved by Councillor Brenner , • Seconded by Councillor Y'istrilto "";;,. 'o; is WI IEREr,S in the private sector, an Audit Committee is a required sub-conunittec of the Hoard of Directors of a company that offers securities to the public and its principal purpose is to review • ;', the company's affairs primarily by critically examining the audited annual financial statement, prepared by the management;and i f WillREAS a 1981 Canadian Institute of Chartered Accountants research study indicated that an ,' rt1:4);,' , •, Audit Committee would strengthen procedures used by Council in approving financial statements iC v ty, ff i. particularly in view of the large amount of public funds under their control;and ', WI UREAS the objectives of an Audit Committee arc to: • 41 a - help Council meet its fundamental.responsibilities of protecting the municipal assets ane! ',` ai 1 managing operations as efficiently as possible; ,� I tri � ,, t�,.. ; ,w' - provide better communication between the auditor and Council and promote better i ;:1t11 . understanding of the audit process; �` • riI - enhance the external auditor's independent position; x` ` increase the credibility end objectivity of the municipality's financial report; and ^ • Q• strc,rgthen the!ole of the Members of Council i ' i �j�q i! NOW'1'1 ItiRliFORl: the Council of the Corporation of the Town of I'ickering hock. rstahlkhes !.,t;"1 t't,t,,,, a: 4' ,tt-- r n I y °�I r*",.'+'} i 'r+°.-u F' { 'k "A 4..F 4 ; t. , F ,S,'y st {w 3� a tis ,-, �I`.• ." '`#A,-". t .: c'4,,45'..='''s-t ,,c 1,t, s ,, ri r yrs - t ,,Lr 1p- .. ''.4''' H rye +,r{� Z,3^ r3�l4,r� � yg��jj����"yy'//b.'�r�+ '' S,,@�,.,/� r i , -11;,..,„,..,%•.0,,,,,:7duu i f .¢ i�if � ,,i '� 'X'^f":'%`:;A;#144—‘ r' ''',,,,.''P' lt r ,+ 7 ". .,;'-'i-- F i�. ..,0,1,;.,1.4.,...6,14.,44,,;.;t�� a .: , Iv ��}' h45 ,.'i' THAT Councillors(1) �, ,:; fl-(2)'� r'r and(3):.. are hereby appointed to the Audit Committee for a term to expire on November 30, 1997;and THAT the Terms of Reference of the Audit Committee shall be as follows: pp7 - to review the audited annual financial statements in depth with management and the external auditor, ` r ' yy�� �i - to review any changes in accounting principles and practices followed by the Town; F -. :r - to discuss with the auditor the annual evaluation of the internal control ' systems and the recommendations for improvements; - to discuss extent, timing and completion of audit including the level of th, materiality to be used; - to review estimated and final audit fee; • - to recommend to Council the change of the municipal auditor; 1 - to review the problems and restrictions encountered by the auditor and degree of co-operation received; ' - to promote co-operation between the management and the auditor; to review the letter of representation; - to enquire fully into any'activities or transactions that may be illegal, questionable or unethical,and into the municipality's control procedures to ' j ensure that such activities are being guarded against; - to review the adequacy of staffing in relation to both number and competence for accounting and financial responsibilities; J - to review the overall expenses of the Members of Council and the Town Manager; 1 to review the reporting relationship of the internal auditor within the •, �`" organization. The internal auditor shall meet with the Audit Committee ' once per year without management present and the internal auditor shall have free access to the Audit Committee and be responsible for bringing to the Committee's attention any actual or potential problems on a timely basis: i • - to review goals and plans,including the nature and extent of work and the degree of integration with the external auditor's work; • - to follow up significant recommendations made by the internal auditor to management concerning improvements and the management's response. ,1 I CARRIED: MAYOR I rAY F Ai cf,; 1F': 1.