Corporate Affairs and Audit Committee (CAAC) Meeting - March 6, 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 November 29, 2013

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 the Management

5. Review of Board, President and CEO and Senior Management Expenses Q4 2013

CAAC Terms of Reference: Financial Compliance

Action: Information

Pre-read: CAAC:2014-01

Presenter: Corporate Secretary/Expense Clerk

6. Implementation of Auditor General’s 2010  and 2011 Audit Recommendations: Status Report

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

Action: Information

Pre-read: CAAC:2014-02

Presenter: Chief Financial Officer

Reports from the Chief Internal Auditor

7. Chief Internal Auditor 2013 Annual Report

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

Action: Information

Pre-read: CAAC:2014-03

Presenter: Chief Internal Auditor

8. Internal Audit Report: Cell Phone Usage Compliance Audit

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

Action: Information

Pre-read: CAAC:2014-04

Presenter: Chief Internal Auditor

9. Update on Audit Recommendations from Internal Audit Reports

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

Action: Information

Pre-read: CAAC:2014-05

Presenter: Chief Internal Auditor

Closed Meeting Agenda

E. Approval of Agenda and Review of Agenda Order 

Action: Approval

Pre-read: Agenda

Presenter: Chair

F. Chair’s Poll re: Conflict of Interest

Action: Declaration

Pre-read

• Agenda
• Conflict of Interest Policy

Presenter: Chair

G. Confirmation of Closed Meeting Minutes of November 29, 2013

Action: Approval

Pre-read: Minutes

Presenter: Chair

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

Action: Discussion

Pre-read: Action Item List

Presenter: Chair

Reports from the Management

I. Confidential item respecting recommendations of proposed policy or processes

Action: Information

Pre-read: CAAC:C2014-09

Presenter: Chief Financial Officer

J. Confidential item respecting matters that are or may be the subject of litigation or potential litigation, and recommendations of proposed policy or process.

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Information

Pre-read: CAAC:C2014-10

Presenter: Chief Financial Officer

K. Confidential item respecting matters that are or may be the subject of litigation or potential litigation, and recommendations of proposed policy or process.

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Information

Pre-read: CAAC:C2014-11

Presenter: Chief Financial Officer

L. Confidential item respecting personal matters about identifiable individuals, a proposed or pending transaction with a third party, and recommendations of proposed policy or processes.

CAAC Terms of Reference: Financial Compliance

Action: Information

Pre-read: CAAC:C2014-12

Presenter: Senior Director, Procurement

M. Confidential item respecting personal matters about identifiable individuals, a proposed or pending transaction with a third party, and recommendations of proposed policy or processes.

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

Action: Information

Pre-read: CAAC:C2014-13

Presenter: Senior Director, Procurement

N. Confidential item respecting personal matters about identifiable individuals, a proposed or pending transaction with a third party, and recommendations of proposed policy or processes

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

Action: Information

Pre-read: CAAC:C2014-13

Presenter: Senior Director, Procurement

O. Confidential item respecting recommendations of proposed policy or processes

CAAC Terms of Reference: Financial Reporting and Financial Statements

Action: Approval

Pre-read: CAAC:C2014-15

Presenter: Director, Strategic Communications / Director, Strategic Planning & Stakeholder Relations

TERMINATION

Public Meeting Minutes

The Corporate Affairs and Audit Committee of Toronto Community Housing Corporation held a public meeting on March 6, 2014, in the Main Floor Conference Room, 931 Yonge Street, Toronto, commencing at 1:36 p.m.

Committee Directors Present:

Zahir Bhaidani, Chair

Christian Buhagiar

Brian Kwan

Committee Directors Absent:

Councillor Frances Nunziata 

Karen Newman

Also Present:

Marta Asturi, Legal Counsel and Assistant Corporate Secretary

Jason Gorel, Chief Financial Officer

Pamela Spencer, General Counsel and Corporate Secretary

Michael Vear, Chief Internal Auditor

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. Brian Kwan, seconded by Mr. Christian Buhagiar and carried, the Corporate Affairs and Audit Committee approved the agenda as presented.  

Item 2 - Declaration of Conflict of Interest

The Chair requested members of the Corporate Affairs and Audit Committee to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. Mr. Christian Buhagiar declared a conflict of interest related to the public agenda Item 5 “Review of Board, President and CEO and Senior Management Expenses Q4 2013” due to his current employment with the Institute of Corporate Directors (ICD).

Item 3 - Confirmation of Public Minutes of November 29, 2013

The Committee had before it the draft Corporate Affairs and Audit Committee minutes for the November 29, 2013 meeting.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Zahir Bhaidani and carried, the Corporate Affairs and Audit Committee confirmed the minutes of November 29, 2013 subject to the following amendment: deletion of “such as PWC” on page 2, Item 5.

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

The Corporate Affairs and Audit Committee had before it the above captioned report.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Christian Buhagiar and carried, the Corporate Affairs and Audit Committee received the report for information.

Item 5 - Review of Board, President and CEO and Senior Management Expenses Q4 2013, CAAC:2014-01

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2014-01) from the President and Chief Executive Officer.  

A discussion ensued, including the following highlights:

• The Committee discussed the Board expenses for memberships, and noted the need for an adjustment in future reporting for the Board Chair and another Board member whose memberships with ICD are paid by their respective employer.
• Management confirmed to the Committee that the expenses are posted on the external website on a monthly basis before they are presented at and discussed by the Committee, which are reported on a quarterly basis.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Christian Buhagiar and carried, the Corporate Affairs and Audit Committee received the report for information.

Item 6 - Implementation of Auditor General’s 2010 and 2011 Audit Recommendations: Status Report, CAAC:2014-02

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2014-02) from the President and Chief Executive Officer. 

A discussion ensued, including the following:

• The Auditor General is working towards reporting directly to the Committee in April 2014 and to the Board of Directors if required.
• The Committee asked for clarification with respect to the total number of the Auditor General’s recommendations fully implemented. The Auditor General reported at the April 19, 2013 Committee meeting that 43 of his original 80 recommendations contained in his five audit reports (two 2011 audit reports and three 2012 audit reports) have been fully implemented or no longer applicable. On January 28, 2014, management provided the Auditor General with an update on the implementation status of his recommendations, proposing that 26 of the remainder of 37 outstanding recommendations are ready for a post-implementation review. Management confirmed that 11 of the 37 outstanding recommendations are deemed as partially implemented. Management is not aware of any other additional reports or investigations from the Auditor General’s office at this time.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Brian Kwan and carried, the Corporate Affairs and Audit Committee received the report for information.

Item 7 - Chief Internal Auditor 2013 Annual Report, CAAC:2014-03

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2014-03) from the Chief Internal Auditor.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by Mr. Brian Kwan and carried, the Corporate Affairs and Audit Committee received the report for information.

Item 8 - Internal Audit Report: Cell Phone Usage Compliance Audit, CAAC:2014-04

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2014-04) from the Chief Internal Auditor. 

A discussion ensued, including the following:

• With a view to address the issue of the cell phone excessive usage, the Committee asked whether a stipend to the employee’s expenses or a “bring your own device” program was considered.  The Chief Internal Auditor did not explore such programs for the purposes of this report.
• The Chief Internal Auditor clarified that there are two aspects that have to be considered during an internal audit: monitoring the excessive cell phone usage and monitoring the employees' usage of the cell phones for personal issues.
• The Committee requested clarification with respect to the measurement of the implementation status of the Internal Audit recommendations. The Chief Internal Auditor explained that the  Internal Audit Unit staff test samples of the different items related to a specific recommendation through a follow up audit process. 

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Christian Buhagiar, the Corporate Affairs and Audit Committee received the report for information.

Item 9 - Update on Audit Recommendations from Internal Audit Reports, CAAC:2014-05

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2014-05) from the Chief Internal Auditor. 

A discussion ensued, including the following highlights:

• The Committee asked how the follow-up internal audits work. The Chief Internal Auditor explained that there is a plan in effect to test the level of implementation for each internal audit recommendation.
• The Committee asked whether there are any savings as estimated by the Auditor General and management for the transfer of the TCHC’s fleet operations to the City. It was estimated $2.6 million in savings over a five year period, or $520,000 annually, relative to what would have been spent to appropriately maintain the fleet under TCHC’s management.  The Committee asked for information with respect to the City’s management of the TCHC’s fleet and comparison of the annual costs. Management explained that TCHC pays a monthly amount to the City and towards a car reserve fund for new vehicles, which it had not so established before. Management iterated that operating costs had decreased in comparing 2013 to 2012.  
• The Committee noted that the Auditor General requested a simplified process to receive internal audit reports even though accessible on TCHC’s external website. The Committee emphasized the importance of having an appropriate protocol in place to submit the Chief Internal Auditor’s reports to the Auditor General’s office for information and the transparency and ease of access for the Auditor General.  The Chief Internal Auditor recommended that going forward, the future Internal Audit reports will be submitted to the City’s Auditor General’s office for information subsequent to the Committee meetings.

Motion carried

ON MOTION DULY MADE by Mr. Christian Buhagiar, seconded by 
Mr. Brian Kwan, the Corporate Affairs and Audit Committee received the report subject to the amendments discussed.

TERMINATION

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Christian Buhagiar and carried, the public meeting of the Corporate Affairs and Audit Committee terminated at 2:04 p.m.