Corporate Affairs and Audit Committee (CAAC) Meeting - June 27, 2014

Public Agenda

1. Approval of Public Meeting Agenda and Review of Agenda Order 

Action: Approval

Pre-read: Agenda

Presenter: Chair

2. Chair’s Poll re: Conflict of Interest

Action: Declaration

Pre-read

• Agenda
• Conflict of Interest Policy

Presenter: Chair

3. Confirmation of the Public Meeting Minutes of April 16, 2014

Action: Approval

Pre-read: Minutes

Presenter: Chair

4. Business Arising from the Minutes and Committee Action Items Update

Action: Discussion

Pre-read: Action Item List

Presenter: Chair

Reports from Management

5. Review of Board, President and CEO and Senior Management Expenses Q1 2014

CAAC Terms of Reference: Financial Compliance

Action: Information

Pre-read: CAAC:2014-22

Presenter: Expense Clerk

6. Housing Connections (Annual Report, Quarterly Performance Reports and Audited 2013 Financial Statements)

CAAC Terms of Reference: Subsidiary & Joint Ventures

Action: Information

Pre-read: CAAC:2014-23

Presenter: General Manager, Access Housing Connections Inc.

Reports from from the Chief Internal Auditor

7. Internal Audit Report: Review of TCHC Payroll Processing

CAAC Terms of Reference: Internal Audit, Accounting System & Controls

Action: Information

Pre-read: CAAC:2014-24

Presenter: Chief Internal Auditor

8. Internal Audit Report: Employee Expense Claims 2013 Follow Up Review

CAAC Terms of Reference: Internal Audit, Accounting System & Controls

Action: Information

Pre-read: CAAC:2014-25

Presenter: Chief Internal Auditor

9. Public Disclosure of Board Member and Employee Expenses

CAAC Terms of Reference: Internal Audit, Accounting System & Controls

Action: Information

Pre-read: CAAC:2014-26

Presenter: Chief Internal Auditor

10. Whistleblower Policy, Process and Procedures

CAAC Terms of Reference: Financial and Fraud Risk

Action: Information

Pre-read: Verbal

Presenter: Chief Internal Auditor

Closed Meeting Agenda

A. Approval of Agenda and Review of Agenda Order

Action: Approval

Pre-read: Agenda

Presenter: Chair

B. Chair’s Poll re: Conflict of Interest

Action: Declaration

Pre-read

• Agenda
• Conflict of Interest Policy

Presenter: Chair

C. Confirmation of Closed Meeting Minutes of April 16, 2014

Action: Approval

Pre-read: Minutes

Presenter: Chair

D. Business Arising from the Minutes and Committee Action Items Update

Action: Discussion

Pre-read: Action Item List

Presenter: Chair

Reports from Management

E. Quarterly Consolidated Financial Statements- Q1 2014 and draft PWC’s Report to the Audit Committee Quarterly Review First Quarter of 2014

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Information

Pre-read: CAAC:C2014-27

Presenter: Chief Financial Officer and Corporate Controller

F. Financial Performance Report Q1 2014

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Information

Pre-read: CAAC:C2014-28

Presenter: Chief Financial Officer; Senior Finance Director; Director, Financial Planning & Analysis

G. 2014 Mortgage Renewals & City Loans Refinancing

CAAC Terms of Reference: Financial Reporting

Action: Approval

Pre-read: CAAC:C2014-33

Presenter: Chief Financial Officer

H. 2015 – Operating and Capital Budget Principles and Approach

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Approval

Pre-read: CAAC:C2014-29

Presenter: Chief Financial Officer

I. Q1 2014 Procurement Compliance  

CAAC Terms of Reference: Financial Compliance

Action: Information

Pre-read: CAAC:C2014-30

Presenter: Senior Director, Procurement

J. Direct Award Contracts - Q1 2014

CAAC Terms of Reference: Internal Audit, Accounting System & Controls

Action: Information

Pre-read: CAAC:C2014-31

Presenter: Senior Director, Procurement

K. Contract Awards & Rosters – Q1 2014

CAAC Terms of Reference: Quarterly Reporting

Action: Information

Pre-read: CAAC:C2014-32

Presenter: Senior Director, Procurement

L. It Strategy- Status Update

CAAC Terms of Reference: Information Technology

Action: Information

Pre-read: CAAC:C2014-34

Presenter: VP ITS

TERMINATION

Public Meeting Minutes

The Corporate Affairs and Audit Committee (CAAC or the “Committee”) of Toronto Community Housing Corporation (TCHC) held a public meeting on June 27, 2014, in the Main Floor Conference Room, 931 Yonge Street, Toronto, and via teleconference, commencing at 12:00 p.m.

Committee Directors Present:

Zahir Bhaidani, Chair

Christian Buhagiar

Brian Kwan (via teleconference)

Committee Directors Absent:

Karen Newman

Councillor Frances Nunziata

Also Present:

Marta Asturi, Legal Counsel and Assistant Corporate Secretary

Jason Gorel, Chief Financial Officer and Treasurer

Greg Spearn, Interim President and Chief Executive Officer

Michael Vear, Chief Internal Auditor

External Auditor – PricewaterhouseCoopers LLP (PWC)

Daniel D’Archivio, Partner, Audit and Assurance Group, PWC

Allen Topaloglu, Senior Manager, PWC

Access Housing Connections Inc. (AHCI)

Paul Chisholm, General Manger

A quorum being present, the Chair called the meeting to order and Ms. Mirela Bolentiru served as recording secretary.

Item 1 - Approval of Agenda

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Brian Kwan and carried, the CAAC unanimously approved the agenda as presented.

Item 2 - Declaration of Conflict of Interest

The Chair requested members of the CAAC to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. None were declared.

Item 3 - Confirmation of Public Minutes of April 16, 2014

The Committee had before it the draft Corporate Affairs and Audit Committee minutes for the April 16, 2014 meeting.

The CAAC Chair requested for a copy of the itemized list of cost savings generated through the efficiencies found subsequent to the implementation of the Auditor General’s recommendations.

Post Meeting:

Following the CAAC meeting on June 27, 2014, the Legal Counsel and Assistant Corporate Secretary circulated via email to the CAAC Chair the handout of the Auditor General presented at the May 14, 2014 TCHC Board meeting when he presented his audit report to the Board of Directors, which outline a summary of savings from the implementation of the recommendations made by the Auditor General.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Brian Kwan and carried, the CAAC unanimously confirmed the April 16, 2014 public minutes as presented.

Item 4 - Business Arising from the Minutes and Committee Action Items Update

The Committee had before it the above captioned report.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Brian Kwan and carried, the CAAC unanimously received the report for information.

Item 5 - Review of Board, President and CEO and Senior Management Expenses Q1 2014, CAAC:2014-22

The CAAC had before it the above-captioned report (CAAC:2014-22) from the Chief Internal Auditor.  

The CAAC Chair asked for a breakdown of some of the expenses and management provided detailed responses. The CAAC inquired with respect to the status of the reporting on expenses for all the employees of the Corporation. The Chief Internal Auditor confirmed that to date only the Board of Directors, the Interim President and CEO, and senior management (earning $100K and above)expenses have been posted monthly on the TCHC website.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by    Mr. Brian Kwan and carried, the CAAC unanimously received the report for information.

Item 6 - Access Housing Connections Inc. – 2013 Audited Financial Statements, 2013 Annual Report, and 2013 Quarterly Performance Reports, CAAC:2014-23

The CAAC had before it the above-captioned report (CAAC:2014-23) from the General Manager, Access Housing Connections Inc. (AHCI).  

The CAAC further inquired with respect to the status of the Housing Services Inc. (HSI), another wholly-owned subsidiary of TCHC.  The audited financial statements for 2013 have not as yet been completed. The external auditor, PWC has to conduct a final procedure to finalize the audited Financial Statements for 2013.  An HSI Board of Directors meeting is to be scheduled in the third quarter of 2014.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by    Mr. Brian Kwan and carried, the CAAC unanimously received the report for information.

Item 7 - Internal Audit Report: Review of TCHC Payroll Processing, CAAC:2014-24

The CAAC had before it the above-captioned report (CAAC:2014-24) from the Chief Internal Auditor.  

The Chief Internal Auditor presented the report and a discussion ensued, including the following salient points:

• The Internal Audit reviewed the entries in the payroll system, WTES, and it was determined that half of the managers provide their online approvals of the employee timesheets bi-weekly in a timely fashion. Approvals for mileage are also provided in relation to the employee expenses.
• The CAAC inquired whether Internal Audit has discussed with management the issue of not all the managers providing timely online approvals for the employee time sheets.
  • The Chief Internal Auditor confirmed that discussions with management occurred and explained that on page 11 of the Internal Audit report, Recommendation #4 provides four options available to management to make the time sheet electronic approval process compliant and effective. A decision with respect to the implementation of the best approach is yet to be made.  More data related to the online electronic approval rates will be available by the year-end.  The CAAC requested the Internal Auditor to report back on the status of the implementation of recommendation #4 regarding timesheet electronica approval process.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by   Mr. Brian Kwan and carried, the CAAC unanimously received the report for information.

Item 8 - Internal Audit Report: Employee Expense Claims 2013 Follow Up Review, CAAC:2014-25

The CAAC had before it the above-captioned report (CAAC:2014-25) from the Chief Internal Auditor.  

The Chief Internal Auditor presented the report and a discussion ensued, including the following highlights:

• Internal Audit followed up with its recommendations from prior internal audit reports on the employee expense claims, sample testing the purchase cards (P-cards) and the expense forms.
• It was determined that generally the rules have been followed. There were some instances where late reconciliation occurred on some employees’ P-cards.
• Internal Audit will not conduct any further reviews of the employees’ expense claims as there is an Expense Claim Clerk specifically assigned for this task.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by   Mr. Brian Kwan and carried, the CAAC unanimously received the report for information.

Item 9 - Public Disclosure of Board Member and Employee Expenses, CAAC:2014-26

Deferred

The CAAC had before it the above-captioned report (CAAC:2014-26) from the Chief Internal Auditor.  

The Chief Internal Auditor introduced the report and a discussion ensued, including the following highlights:

• Internal Audit currently has oversight of the public disclosure of expenses incurred by TCHC Board members and employees whose salaries are in excess of $100,000 per annum.
• The Chief Internal Auditor reviewed TCHC’s current expense disclosure practices to determine the appropriateness of expanding the disclosure scope to include all TCHC employees.  The Chief Internal Auditor proposed revised public disclosure practices regarding expenses, including not extending disclosure of expenses for all TCHC employees.  The CAAC discussed the impact on transparency with this approach.  The CAAC requested the Chief Internal Auditor to follow up with the Board Chair on the proposed amended public disclosure practices and report back to the CAAC. The CAAC asked for clarification with respect to the difference between the Board and the employee categories of expenses (page 6 of management’s report).

The CAAC deferred the report subject to discussion with the Chair of the Board of Directors.

Item 10 - Whistleblower Policy, Process and Procedures

The Chief Internal Auditor noted that the responsibility for this policy has been transferred to the General Counsel and Corporate Secretary. 

The CAAC received the report for information.

TERMINATION

The CAAC terminated the public meeting at 12:33 p.m.