Second Quarter Audit Committee June 26, 2017

2nd quarter audit status report FCS-17-009 2nd quarter audit status report

Summary Complete: Aggregates – cost/benefit analysis Stores (tool crib) – physical inventory Community Services Administration – Status update Kitchener Utilities Operations Centre and Corporate Contact Centre – Status update In progress: Revenue – comprehensive audit

Cost / Benefit Analysis aggregates

Overview Concrete and asphalt crushing operation ceased at Battler Yard Make room for new snow storage and disposal facility Aggregates moved to KOF Decision required on whether to continue recycling operations at the KOF or pursue other disposal and supply options

Objectives and Methodology Objective: to recommend a sustainable and efficient process for concrete / asphalt disposal and supply Methodology: Literature review Staff consultation Risk assessment Benchmarking Cost / benefit analysis of various options

Sources and Uses Contractors source their own disposal / supply of aggregates Virgin materials are not currently required for any City applications if specifications are met

Pros and Cons of Battler Yard Cost effective Yard closed at 3pm Control over materials Lack of process around use of material No waste Yard loader staff had other duties Large area to stockpile No controls over testing Ease of disposal and procurement Lack of data integrity for volume generated and used Close proximity to work sites Some staff not using stockpiles Dumping ground for scrap material Quality of product did not meet some needs

Process Steps

Analysis - Criteria Each option and combination of options was evaluated using this criteria: Cost per tonne and total cost Environmental impact Degree of control over use of material Staff and equipment impact Relative amount of land required Other pros and cons Number of high risks

Evaluation Used an evaluation matrix to compare 11 scenarios (combinations of options) Assigned a score of 10 (best), 5, or 1 (worst) for each criteria Criteria weighted equally Highest total score represents preferred solution

Recommendations Preferred Scenario: City staff haul material from work site to KOF Sort it 3rd party to crush it Use recycle materials

Rationale Lowest cost per tonne ($11 / tonne cheaper than next closest option) Lowest total cost ($115K / year cheaper than next closest option) Best option environmentally Less hauling, less green house gas emissions Uses recycled materials Not taking up space at landfills

Rationale continued Material can be sorted and properly tested for contamination Retain complete control over where material is used and quality of material No additional staff or equipment required No additional risk to our CVOR points Does require the most land at the KOF Can be mitigated through frequent crushing and better controls

Other Recommendations Establish weighing process for incoming and outgoing loads Set maximum limits for pile sizes to trigger crushing and disposal Complete the KOF yard plan including signage and maps Revisit quality standards in crushing tender Investigate if permits required Document roles and responsibilities Contract out testing of incoming loads

Physical Inventory Stores (tool crib)

Background Tool crib – location which stocks tools that can be loaned out to staff In 2008, 3 tool cribs consolidated at KOF Database created to track the location of tools loaned out No process to follow up on tools not returned No physical inventory ever done

Objectives and Methodology Objective: to review and improve controls and management of tools. To conduct a physical inventory. Methodology: Staff consultation Review of database capabilities Full physical inventory – in tool crib and in the field Discussion of proper financial treatment Development of new process and controls

Findings Most tools in field will remain in field (i.e. not part of the tool crib) Most tools in tool crib are properly listed in database Over 50% of tools listed as being in the field could not be found Previously damaged and disposed of Possible theft Value difficult to estimate but <$100K total; previously expensed

Recommendations Utilize “Return By” field in database Run a weekly report on overdue tools and follow up Inform management when tools retired and / or purchased Monitor staff usage and hold them accountable for repeated lost or broken tools Document process

Community services administration Status Update Community services administration

Background Original Objective: to assess all administrative roles within CSD Administration section to determine capacity and resourcing needs Original Findings: Excess capacity in some roles while others overburdened Lack of trained back-ups Original Recommendations: Combine and redistribute tasks, eliminate 1 FTE Process improvements to decrease workload Trained back-ups to allow coverage for absences

Objective & Audit Status Objective: to hold staff accountable for implementing audit recommendations Audit Status: Date original audit completed August 1, 2012 # of Recommendations 9 # of Recommendations complete 6 # of Recommendations in progress # of Recommendations not started 1 # of Recommendations not required 2

Benefits Realized 1 FTE declared redundant Re-purposed for Neighbourhood Strategy Engagement Associate in 2017 Misdirected calls have decreased Staff trained on back-up responsibilities Workload decreased due to CRA removal of child fitness tax credit No new recommendations and no further follow-up audits required.

Kitchener utilities operations Centre & corporate Contact Centre (CCC) Status Update Kitchener utilities operations Centre & corporate Contact Centre (CCC)

Background Original Objective: to examine the options for providing dispatch and alarm monitoring services Original Recommendations: Transfer non-utilities dispatch and alarm monitoring to CCC Operate CCC 24/7 After hours utilities dispatch handled by CCC

Objective & Audit Status Objective: to hold staff accountable for implementing audit recommendations Audit Status: Date original audit completed December 3, 2012 # of Recommendations 18 # of Recommendations complete 16 # of Recommendations in progress 1 # of Recommendations not started

Benefits Realized Improved service levels – 24/7 service Improved dispatching function Improved alarm monitoring Current process documentation Increased employee satisfaction Current tools Utilities staff no longer work night shifts

Unaddressed Recommendations Create a business continuity plan for the Kitchener Utilities Operations Centre Continue implementing key performance indicators for Kitchener Utilities Operations Centre No new recommendations and no further follow-up audits required.