to: audit committee subject: report providing summary ......page 3 of report ca-01-15 sheila jones,...

of Report CA-01-15

TO: Audit Committee

FROM: City Auditor's Office

SUBJECT: Report providing Summary of Audit Results - Committee of

Adjustment

Report Number: CA-01-15 Wards Affected: None

File Numbers: 430-03-Planning & Building

Date to Committee: February 11, 2015 Date to Council: February 23, 2015

Recommendation:

For information only.

Purpose:

Address other area of responsibility - Considering reports from the City Manager and

the City Auditor identifying audit issues and the steps taken to resolve them including

the adequacy of the management responses to audit concerns.

Background:

Audit of Committee of Adjustment was completed in December 2014 as part of the 2014 audit plan.

Discussion:

Overall Audit Rating – GOOD (details of the overall audit ratings are located on page 25 of this report).

Summary of Audit Findings & Severity (Measure of Residual Risk)

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Category High Medium Low

Governance Framework 0 1 1

Regulatory Compliance 0 2 1

Operating Efficiency and Effectiveness 0 1 3

Total 0 4 5

Details of Audit Finding Severity Scale are located on page 25 of this report.

The audit report is as follows:

• Summary of Audit Results is located on page 4 of this report

• Detailed Audit Report is located on page 7 of this report.

• Detailed Audit Findings, Recommendations & Management Action Plans are

located on page 11 of this report.

The audit closing meeting was conducted on November 21, 2014 with the Secretary-Treasurer Committee of Adjustment and Director of Planning and Building.

Financial Matters:

City Auditor Involvement • Estimated audit hours for completion: 50 - 125 hours • Actual hours required to complete: 135 hours

Public Engagement Matters:

Not required.

Conclusion:

The Committee of Adjustment is effectively managed and the audit did not detect any

‘High’ unmitigated risks. However, the committee members are accessing private

properties without advance written authorization from the residents and the City

currently does not comply with the regulated turnaround times.

Respectfully submitted,

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Sheila Jones, City Auditor

335-7600 ext. 7872

Appendices:

a. Committee of Adjustments - Summary of Audit Results and Detailed Audit

Report

a.1 Detailed Findings, Recommendations & Management Action Plans

a.2 Additional Observations

Notifications: (after Council decision)

Approved by:

Joan Ford, Director of Finance

Nancy Shea Nicol, Director of Legal Services & City Solicitor

Pat Moyle, Interim City Manager

Reviewed by:

Name: Mailing or E-mail Address:

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APPENDIX A

AUDIT INFORMATION

Audit Unit Committee of Adjustment Distribution Sean Kenney, Secretary-

Treasurer Committee of

Adjustments

Department

Planning and Building Bruce Krushelnicki, Director of

Planning and Building

Division Development and

Infrastructure

cc Scott Stewart, General Manager Nancy Shea-Nicol, City Solicitor

Date Issued

Author

January 9, 2015

Lenka Watson, Auditor

SUMMARY OF AUDIT RESULTS

Area of Focus

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Audit Period

August 1, 2012 to July 31, 2014

What is Working

Well

− Committee members interviewed were satisfied with the staff support and quality of staff reports;

− City staff are pro-active about continuous improvement as evidenced by the ongoing Business Process Management initiative;

− Files inspected were complete and well organized; also observed file organization enhancements to 2014 files including hearing attendance sign-off sheets;

− Notices of public hearing were posted for all sites tested.

Findings by

Severity

(see definitions

on Page 18)

Refer to Appendix A.1 (page 7) for details of the audit findings and

recommendations

Category High Medium Low

Governance Framework 0 1 1

Regulatory Compliance 0 2 1

Operating Efficiency and Effectiveness 0 1 3

Total 0 4 5

Overall Rating (see definitions on

Page 25)

GOOD

Why?

Governance

Regulatory

Compliance

Established processes are in place to ensure smooth operation of the Committee of Adjustment. Although the Planning and Building Department does not track the trends in Ontario Municipal Board hearings and the case details are not readily available, management indicated that there have been historically limited complaints against the Committee of Adjustment and no appeals on procedural basis. The following are the areas of required focus going forward:

- Management is revisiting the governance framework to ensure appropriate procedure by-law / provisions in place for governing the calling, place and proceeding of meetings and that committee member roles and responsibilities are clearly defined and communicated;

- The City is currently not meeting the regulated turnaround times for processing of minor variance and consent applications and initiatives are underway to improve efficiency;

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Application

Forms

- City of Burlington does not obtain written permission to enter

private property from applicants in advance of Committee member site visits;

- City of Burlington application forms don’t include the disclosure

regarding the collection and use of personal data.

Closing

Comments

We thank management and staff of Planning and Building, Committee of Adjustment for the cooperation and support extended to us during this audit.

Management

Comments

Planning and Building concurs with the results of this audit. We thank all staff and Committee members for the work they provided during the audit. Staff feel that the recommendation of the audit will benefit the work processes of the Committee of Adjustment.

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DETAILED AUDIT REPORT

Committee of Adjustment (COA)

COA is a citizen committee established by Council via By-law 36-2007. COA makes decisions on all minor variance applications together with a limited percentage of consent applications, as delegated by Halton Region.

• Minor Variance Applications Section 45(1) of the Planning Act allows committees of adjustment to authorize minor variances from any by-laws passed under section 34 or 38 of the Act (e.g., to allow smaller yard setbacks, increase lot coverage by a dwelling or to reduce the minimum landscape areas as required by the City Zoning By-Law and the Official Plan).

• Consent Applications Planning Act consent is required to permit the creation of new lots, lot additions (lot line ‘adjustments’), permanent easements, long term leases, or correction respecting the title of a property. The Region of Halton has delegated authority to local municipalities in 1999 to grant consents and the area Planning Directors were also ‘Delegated Authority’ to approve undisputed consents, foregoing the need for a public hearing. City delegated authority to the COA to hold hearings and decide on applications for Consent, if the application also involves minor variances or the application is being disputed (Delegation of Authority By-Law 99-2012).

COA Service The City staff provide the following services to the COA, the Council and public:

1. Process applications (maintain forms and review applications); 2. Coordinate application reviews by City staff and external stakeholders

and the development of the staff report; 3. Mail hearing notices to owners 60 meters from the property; 4. Facilitate posting of notices (provide residents with signage and post

notices of hearing); 5. Accept resident inquiry and letters regarding applications; 6. Facilitate hearings (schedule hearings, create agendas, document

minutes); 7. Mail decisions; 8. Maintain website.

Regulatory Requirements The Planning Act and associated Ontario Regulations dictate the content of the application, turnaround times for the public hearing, nature and timing of notices to residents and the rights of appeal. The Statutory Powers Procedures Act governs the conduct of COA hearings. The Municipal Conflict of Interest Act provides conflict disclosure requirements.

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Recent COA Initiatives The Building and Planning staff supporting the COA completed a Business Process Management review in 2014 and identified such objectives as:

1) Identify a process to track and monitor application processing times and to reduce timeline for simple consent applications;

2) Modify and automate application forms; 3) Rebuild AMANDA to meet user needs.

Financial Information1

Financial Results

2013 2012

Revenue 383,573 258,630

Expenditure 152,763 103,218

Net Proceeds 230,810 155,412

1 Financial Results Source: SAP Report Z5YR, Cost Centre 632030; Number of Applications Source: AMANDA, Fees Source: October 2014

Application Forms

18 2413.2

144136

120

2012 2013 2014

(pro-rated)

Committee of Adjustment

Applications Processed

Consent Minor Variances

$-

$5,000

$10,000

Burlington Hamilton Milton Oakville Mississauga

Application Fee Structure

October 2014

Consent

Minimum

Consent

Maximum

Minor Variance

Minimum

Minor Variance

Maximum

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Staffing The Burlington Committee of Adjustment has five members and two alternates; the following COB staff support the Committee: 1 Director Planning and Building – grant undisputed consents, provide support to COA 1 Secretary-Treasurer – dedicated resource 1 Committee of Adjustment Clerk

Partnerships

The following City Staff are involved with consultations, application reviews and creation of the staff report:

• Zoning

• Site Planning

• Site Engineering

• City Forester

• Transportation

• Finance

• Legal The following external stakeholders may be involved in a review of an application:

• Burlington Hydro Inc.

• Ministry of Transportation

• Halton Region

• Halton Conservation

Systems AMANDA - COA uses this Planning and Building database to track resident applications, including status tracking and a review workflow. AMANDA also stores templates for key correspondence. A comprehensive Procedures Manual was documented for the entire application lifecycle, including standardized definitions for data fields to ensure consistent processing and reliable information. Point of Sale (POS) - the city-wide POS system is used to record fees received from applicants, POS is integrated with SAP and the City’s financial reporting systems.

Audit Objectives

This audit was being conducted to:

• Assess design and effectiveness of controls in place to ensure: o Compliance with the Planning Act and Ontario Regulations

200/96 and 197/96 as amended by 547/06; o Review COA processes for opportunities to improve efficiency

and customer satisfaction.

Audit Scope Specifically, the review focused on controls over:

• Design and intake of variance and consent application (review of benchmarking results available to residents on websites of

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surrounding municipalities of Milton, Oakville, Mississauga and Hamilton);

• Walkthrough of application review process, preparation of the COA Agenda and staff recommendations;

• Review of sample application files and AMANDA records for completeness;

• Review of distribution and content of resident notices;

• Financial oversight including completeness and accuracy of collected fees;

• Monitoring and oversight (e.g., committee decisions, conditions, regulatory compliance, effectiveness – tracking of Ontario Municipal Board trends).

Audit inspected and tested a sample of applications processed during the coverage period; interview City staff and committee members. Reviewed results of COA staff initiatives including the business process maps created through recent business process and customer experience self-assessment. The scope of the review specifically excluded:

• Preparation for and appearance at the Ontario Municipal Board hearings;

• Activities of the Committee of Property Standards and Committee of Revisions;

• Overall Building and Planning application processes.

Role of Management & Inherent Risk

Responsible for designing internal controls to mitigate the inherent risks and to meet the following objectives:

− Safeguarding of assets (including reputation)

− Compliance with laws, regulations and corporate policies

− Reliability and integrity of financial and operational information

− Efficiency and effectiveness of operations.

Risk Category Risk Rating

Community Trust and Confidence

Moderate

Legislative / Regulatory Risk Moderate

Legend:

High – significant/large/critical impact on City operations, financial results and/or image Moderate – moderate/modest/sensitive impact on City operations financial results and/or image Low – insignificant/little/subtle impact on City operations, financial results and/or image

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APPENDIX A.1 – DETAILED FINDINGS, RECOMMENDATIONS & MANAGEMENT ACTION PLANS

No. Audit Finding

Risk Category

& Severity

Rating Recommendations Management Action Plan

Governance

1 What is happening It is unclear, which are the governing documents in effect for the Committee of Adjustment and whether they have been effectively reviewed, communicated to / adopted by committee members. The Secretary-Treasurer was reviewing the documents at the time of the audit. - COA members interviewed were

unaware of a formal COA procedural by-law and did not recall receiving the COA Terms of Reference at the beginning of the term.

- Interim 2014 Terms of Reference are being used for the recruiting and selection of the 2015 Committee of Adjustment members. The last version of the terms appears to have been reviewed in 2009 at the January 19, 2009 Community Development Committee Hearing.

- COA Staff provided audit with COA

Procedural By-laws 001-1997, 001-2008, By-law 001-1999 is also referenced in the documents. However it is unclear which documents have been enacted,

Community Trust and

Confidence

Moderate

(Yellow)

ü Work through City Clerk with Council to ensure appropriate delegation of authority and documented roles and procedures.

ü Consider other municipal examples such as Town of Oakville COA by-law, which includes such guidelines as:

o Definition of the conflict

of interest and associated procedures;

o Meeting procedures; o Rules of conduct and

debate; o Voting; o Point of privilege; o Point of order; o Handling of requests of

deferral or withdrawals; o Site visit guidelines – i.e.,

prohibition to discuss merits of the application with any interested individuals.

Comment: Agree Action Plan: Work with Legal and P&B management staff on developing a new procedural by-law. Conduct a best practices review, rewrite terms of reference for the Committee of Adjustment (combining all work of the CofA under one terms of reference e.g., CofA, property standards court of revision) Obtain Council approval for new terms of reference, and procedural by-law. Responsibility: Secretary Treasurer CofA Target Date: March 2015

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No. Audit Finding

Risk Category

& Severity


because a signed copy is only available for a By-law 001-2008, which was enacted by committee members, not Council. These By-laws are not published on the City By-law website, which references 001-2008 as the City Adult Entertainment By-Law.

What is required Section 238(2) of the Municipal Act, 2001 requires every municipality and local board to adopt a procedure by-law for governing the calling, place and proceedings of the meetings. The City Procedure By-Law 80-2012, Section 2.4 requires that citizen advisory committees are expected to adopt similar provisions. Why does this happen Opportunity was discovered during the review of by new Secretary-Treasurer. What is the impact Issues with hearing execution, committee conduct may result in incidents and negatively impact community trust.

2 What is happening

- Roles delegated to staff by Council to assist with recruiting, COA training at beginning of term, and ongoing

Community Trust and

Confidence

ü Work with City Clerk to ensure appropriate and documented roles and responsibilities.

Comment: Agree

Action Plan:

Work new CofA members to

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No. Audit Finding

Risk Category

& Severity


support / authority during the term (e.g., professional opinion provided in the staff reports) have not been documented.

- The Director, Planning and Building

provides the COA members with an overview of the Planning Act and overview of roles and responsibilities at the onset of each term.

What is required Clear delegation of authority to ensure that new members have the resources, training and are aware of roles, while not impeding the committee’s independence.

Why does this happen Lack of comprehensive and transparent COA governing documents, operation based on adopted practices. What is the impact City staff may be perceived as over-reaching the influence over the citizen committee.

Low

(Green)

develop a training and development plan for the 2014 to 2018 term.

Responsibility:

Secretary – Treasurer CofA

Target Date:

May 2015

Regulatory Compliance

3 What is happening The City currently does not comply with the requirements of the Planning Act

Legislative / Regulatory

ü Develop reporting and monitoring mechanisms; identify and continue the

Comment: Agree Action Plan:

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No. Audit Finding

Risk Category

& Severity


related to application processing times. Over last three years the City minor variance applications were processed in approximately 74 days and 60 days in 2014. Consent applications took on average 127 days. Management is aware of this non-compliance and is reviewing processes to reduce the turnaround times. What is required Applicant can appeal to the Ontario Municipal Board if: Minor Variance: 54 (4) The hearing on any application shall be held within thirty days after the application is received. Consent: 51 (14) If the council fails to make a decision on the application within 90 days after the day the application is received by the clerk of the municipality. Why does this happen Although hearings are scheduled twice per month, City accepts the application based on an informal consultation and prior to a formal zoning review, which is in management’s opinion the most time consuming. The processing times for

Moderate

(Yellow)

process review initiatives to reduce turnaround times.

ü Communicate realistic

expectations to residents.

ITS and CofA staff are currently rebuilding the AMANDA program to better suit the needs of the CofA. Including the ability to monitor milestones such as processing times etc Additionally, the CofA subservice has completed a business process management review and has an action plan that addresses the need to monitor and track CofA processing times and customer experience. This information will be to aid in our to continuous improvement planning. CofA staff intends on tracking on ¼ basis variance and consent application turns around times. Staff is currently developing a customer experience survey which will be given to applicants. Responsibility: Secretary – Treasurer CofA Target Date: May 2015

http://www.e-laws.gov.on.ca/html/statutes/french/elaws_statutes_90p13_f.htm

http://www.e-laws.gov.on.ca/html/statutes/french/elaws_statutes_90p13_f.htm

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No. Audit Finding

Risk Category

& Severity


consent applications are often driven by the applicant delays in the process. What is the impact Residents may be dissatisfied as the application indicates that it will be processed in 40 to 45 days. Although no known complaints have been raised by residents to date, the City may incur increased costs associated with a hearing and damage to Community Trust / Confidence. The Minister may revoke the authority to process applications; the staff believes this is unlikely.

4 What is happening

All surrounding municipality application forms inspected (Oakville, Milton, Hamilton and Mississauga) include one or more of the following statements on their application forms related to collection and disclosure of information: - Owner’s authorization and consent to

use and collection of any personal information that is collected;

- Owner’s authorization to release municipal tax property information to agent;

- Consent to registration in the Halton Registry Office against subject lands


Moderate

(Yellow)

ü Include notice regarding collection and use of private data on the City application forms.

ü Consider the remaining consents obtained by other municipalities.

Comment: Agree

Action Plan:

Best practices review, plain language review and rewrite of the applications and process guidelines to include information and notices used by other municipalities.

Responsibility:


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No. Audit Finding

Risk Category

& Severity


of the Final Decision; - Note regarding the authority under,

which the information is being collected and how it will be used.

What is required Notice to residents regarding the collection and use of private data. Why does this happen Lack of periodic application review and version control. What is the impact Burlington may be either in non-compliance with applicable regulations or may not be following the best practices for collection and retention of personal information.

Target Date:

September 2015

5 What is happening Correspondence does not always include the language required by the regulation. Notice of consent application 545-02-B13/008/B did not include language to describe where residents can find additional information regarding the application. What is required Ontario Regulation 547/06, Section 13 (3)


Low

(Green)

ü Version control all key correspondence templates to evidence the last review against the applicable regulations.

ü Determine whether additional document protection is required to prevent accidental language omissions and change.

Comment: Agree Action Plan: Through 2015 review all applications and documents used by CofA staff and include version on all documents once reviewed. Responsibility: Secretary – Treasurer CofA

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No. Audit Finding

Risk Category

& Severity


requires that the correspondence includes when additional information and material regarding the application will be available to the public for inspection. Why does this happen Correspondence templates were not effectively reviewed against regulation or the paragraph was accidentally missed. What is the impact Non-compliance with regulation. Application could be disputed on such basis resulting in increased administrative cost and impact on public trust. However, more recent examples of notice of application included the regulated language.

Target Date: December 2015

Operating Efficiency and Effectiveness

6 What is happening COA members inspect all applicant sites in advance of hearings. Inspection may involve access to applicant private property and interaction with the applicant / neighbour. City of Burlington does not obtain written authorization from the applicant to enter the property. All surrounding municipality application forms inspected (Oakville, Milton,

Community Trust and

Confidence

Moderate

(Yellow)

ü Should City employees and Committee members continue access private properties for site visits, obtain written permissions to enter in advance.

Comment: Agree Action Plan: Discuss the site visits with Committee Members and staff as part of the Terms of Reference Procedural By-law review. Include a separate permission to enter form with all applications until the new applications are ready.

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No. Audit Finding

Risk Category

& Severity


Hamilton and Mississauga) include owner authorization / Permission to Enter Form. What is required Authority to access private property. Why does this happen Site visits have been part of the COA practice, but formal documentation is not in place. What is the impact Incident could occur where residents are uncomfortable with the Committee presence on private property; the hearing integrity could get jeopardized due to Committee member interaction with the residents at the time of the visit.

Responsibility: Secretary – Treasurer CofA Target Date: March 2015

7 What is happening

A small number of applications tested had an affidavit signed by an agent without a valid owner’s authorization and or where the person signing the City affidavit did not indicate that they are authorized to bind the Corporation (property owner).

What is required Ontario regulations require assigned

Community Trust and

Confidence

Low

(Green)

ü With the assistance of legal department determine need for such application declaration, and if needed ensure that front desk staff check for completeness before accepting the application.

Comment: Agree (although the applications identified predate current start of current CofA staff)

Action Plan:

Update procedures to ensure that check is occurring.

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No. Audit Finding

Risk Category

& Severity


affidavit by the owner.

Section 45(1) of the Planning Act refers to applicant as owner or any “person” authorized by the owner.

Why does this happen The Act does not specifically require such representation, staff are often familiar with the applicants and don’t consider this area a risk / the risk scenarios are unclear. What is the impact The City’s position could be challenged in case of a dispute, if the City did not exercise the duty to care.

Responsibility:


Target Date:

Immediately

8 What is happening When notices are sent out via the City’s Mailroom Service, an internal confirmation is available for date of mailing and a number of mailings per each application. No record to evidence that the notices were mailed timely is available when notices are placed in interoffice mail by the Clerk. What is required

Process

Low

(Green)

ü Consider obtaining the internal confirmation for all notices.

Comment: Agree (although on occasion staff may still have to manually prepare notice of hearing/notice of application for some variance and consent files as well as other matters the CofA deal with.) Action Plan: Update procedures to ensure that all notices of meeting and

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No. Audit Finding

Risk Category

& Severity


Giving notice by personal service or prepaid first class mail to every owner of land within 60 metres of the area to which the application applies (Ontario Regulation 200/96 3(2)). Why does this happen Historical practices, faster process placing envelopes into interoffice mail. What is the impact The City may have more complete records should a validity of a hearing / decision be questioned on the premise of an insufficient notice.

notices of application are processed through the print shop. In cases when CofA staff must prepare these notices staff will note in the file that the notice was done manually and will deliver notices to the mail room to ensure they are put into the daily mail pick up. Responsibility: Secretary – Treasurer CofA Target Date: Immediately

9 What is happening

No monitoring or reporting mechanisms are in place to:

- Systematically track application processing times;

- Report on overall COA statistics (e.g., denied applications as a %, simple vs. complex applications processed);

- Track and report on OMB hearing trends;

- Track and report on decisions with similar variances to assess consistency of outcomes;

Process

Low

(Green)

ü Periodically re-visit the monitoring needs.

ü Re-visit the guidance in the procedure manual for key data field definitions and ensure team uses the fields consistently.

Comment: Agree

Action Plan:

See action plan for recommendation 3.

Responsibility:


Target Date:

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No. Audit Finding

Risk Category

& Severity


- Ensuring notices have been mailed, reconciling Digital Service Center counts vs. files generated by the Clerk;

- Review of aged open applications.

In addition, a number of data entry discrepancies (application in date and hearing date) were identified when testing a sample of minor variance and consent files.

What is required Monitoring and oversight activities are expected to occur to mitigate risk associated with errors and omissions.

Why does this happen Consideration for cost versus benefit. Lack readily available data. What is the impact Risk of undetected errors / trends requiring staff / COA attention.

May 2015

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APPENDIX A.2: ADDITIONAL OBSERVATIONS

Observation Recommendations

The Burlington Committee of Adjustment application forms could be improved to include the following: - Reference to the COA website and the information that is

made publically available / posted there; - Version date / number to minimize duplication / loss of

knowledge regarding the last review; - Request the applicant to indicate if they have the authority to

bind the corporation on the Affidavit for consent applications, Owner’s Authorization for both types of application;

- Page numbering at the bottom of each page required in the complete application (e.g., 1 of 7);

- Complete information / checklist on the "What happens next page" including:

i. Requirement to post notice; ii. Notification that the applicant or representative

are required to attend the public hearing; iii. The fee schedule does not include the fast track

option at two times the application fee; iv. Other municipalities include Farm Data Sheet

and Environmental Screening Checklist in the package.

Consider observations in the next application form review.

Staff Reports - Other municipalities include list of all stakeholders and indicate

in the report where a particular stakeholder is not applicable – for transparency;

- Finance comments do not appear to vary for applications; i.e., “development charges may apply” language on minor variance reports and a tax roll condition is included on consent applications and may indicate that the language could be used as standard general disclosure and circulation to Finance may be unnecessary;

- A COA member interviewed suggested that staff re-consider the cost versus benefit of lengthy staff reports generated for

Consider revisiting the list stakeholders involved in application reviews for efficiencies (e.g., consider general note on report related to Finance). Also, consider completeness of stakeholders included in the report as other municipalities also consider Fire Department in their reviews, for instances.

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each hearing and opportunity to streamline them.

Notices - Although all notices of hearing are posted on the website,

notices of application for consent are not published; - Regulation allows posting in local paper as an alternative to

mailing and signage. Ensure the alternative is re-considered periodically;

- The onsite notice content includes the information required by the regulation and pre-printed notice posters are available. However, consideration could be given to enhancing the appearance of signage while taking into account the cost versus benefit of such undertaking.

Periodically re-visit public notice approach. Consider working with other areas of Planning and Building to develop a strategy for signage.

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Evidence Tracking Resident complaints are maintained as e-mail printouts / correspondence in each application file. Although they are marked as evidence, the information is not numbered.

Consider numbering the evidence to minimize the risk of incomplete evidence being considered at the hearing.

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Overall Audit Rating Audit Finding Severity Scale

Internal Audit Standards

Audit Methodology

The audit was conducted in conformance with the International Standards for the Professional Practice of Internal Auditing.

The City Auditor relied upon interviews with and observation of key personnel, examination of information, data, and other documentary evidence and re-testing of controls.

Audit Conclusions

The conclusions reached in this report are based upon information available at the time.

The overall conclusion is only applicable to the function/area of this audit. It reflects the professional judgment of the Office of the City Auditor based on a comparison of situations as they existed at the time against audit criteria as identified in the scope of the audit.

Reasonable Assurance

This conclusion is intended to provide reasonable assurance regarding internal controls.

There are inherent limitations in any controls, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective controls may provide only reasonable assurance with respect to City operations.

R atin g De sc rip tion

Exc e llen t

(G re en)

• No inte rnal co ntro l w ea knesse s n oted .

• Go od a dh ere nce to laws , regu latio ns , a nd p olic ie s .

• Go od co ntro l en v iron m en t.

• Op erations a re cons id ere d e fficien t an d e ffective .

G o od

(Ye llow )

• Se ve ra l lo w and /or on e o r tw o m e d ium find ing s .

• M inor contra ve n tion s of p olic ies a nd p roce dures w ith

co m pe nsatin g contro ls in pla ce.

• No vio latio n of la ws .

• M inor op portu nities fo r im provem ent in effic ien cy a nd

effe ctive ne ss.

F air

(Ora ng e)

• M any m ed iu m fin din gs a n d/o r on e or two h igh find ing s.

• Se ve ra l con trave ntion s to po licy .

• M inor v iola tions of reg ula tio ns /law s w ith m inim a l

im pac t to C ity.

• M ode ra te o ppo rtu nities fo r im p ro vem e n t in effic ien cy

and effe c tive ne ss .

W eak

(Red )

• Se ve ra l high f in d ing s and som e m e diu m a nd/o r lo w

fin d ings

• Con tro ls we ak in on e or m ore area s.

• Non co m plia nce with po lic ies p ut th e C ity a t r isk .

• Vio la tio n o f law/reg u latio n pu t the City a t risk.

• Su bsta n tial o pp ortun ities for im provem ent.

• Op erations a re cons id ere d cons is ten tly in e ffic ient

and /or in effe ctive

Severity Details

High (Red)

• Key control does not exist, is poorly designed or is not operating as intended

• Serious non-compliance to policy or regulation • May result in immediate or material loss/misuse of

assets, legal/regulatory action, material financial statement misstatements, etc.

• Indicates a serious business control weakness/deficiency requiring immediate action

Medium (Yellow)

• Key controls are partially in place and/or are operating only somewhat effectively

• Some non-compliance to policy or regulation • May negatively affect the efficiency and effectiveness of

operations and/or financial reporting accuracy. • Indicates a business control concern requiring near-term

action be taken

Low (Green)

• Key controls are in place, but procedures and/or operations could be enhanced.

• Minor non-compliance to policy or regulation • May result in minor impact to operations. • Indicates a business control improvement opportunity for

which longer-term action may be acceptable

Nominal • Housekeeping

to: audit committee subject: report providing summary ......page 3 of report ca-01-15 sheila jones,...

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