A live stream audio check one two. It's a live stream audio check one two Good morning, councelor Vicente. Can we check your audio, please? >> It's working 5 by5. Thank you. >> Thank you, sir. Good morning, Councelor T. Can we check your audio, please? >> Hi, good morning. >> Thank you, sir. >> Thank you. Everyone ready? Well, good morning and welcome to our meeting of the Bmpton Audit Committee. Um, all members are present either in person and online and with councelor P will be joining us shortly. Um, approval of the agenda. Does any members have any uh wish to add any business to today's meeting? Seeing none, I have a motion moved by councelor Bar to approve the agenda. All those in favor? The motion carries. Declarations of interest under the municipal conflict of interest act. Do any members have any declaration of pecunary interest under the municipal conflict of interest act for any matter to be considered on today's agenda? Seeing none, the clerk will note for the meeting minutes. Consent. I will um I'll read each agenda item that is subject to the consent motion and any member may verbally identify an item to be held for debate during the meeting. Any item not held for debate will be considered as part of the consent motion. I will read the agenda items and members may identify items they would like to be held. So 5.1 will be held for presentation but that is uh by Maria from KPMG for the 2025 audit findings report for the year end December 31st 2025. uh 6.1 uh will be held for presentation. Um and it is a staff report for public works and engineering facilities maintenance audit of for 2026. Uh 6.2 u we're also going to hold for presentation uh for staff report for transit facilities maintenance audit. Uh 6.3 staff report uh corporate ethics hotline quarterly report Q2 2026. >> Any home please? that was being held by councelor Tur I believe. >> Y >> thank you. Uh 6.4 Four, it's a staff report for the internal audit work plan status update for Q2 2026 and that is on consent and we have 7.1 uh staff report for 2025 audit consolidation financial statements for the city of Bmpton that is held uh based on the presentation from 5.1. The clerk will summarize those items to be included in our consent motion for approval. through Chair Keenan. Um, on the consent motion, there's only one item, staff report, uh, 6.4, internal audit work plan status update for Q2 2026. Perfect. I have a motion moved by member Russell to approve the consent motion. All those in favor? That motion carries. That brings us to presentations. So 5.1 we have a presentation by Maria the lead audit uh engagement partner from KPMG regarding the 2025 audit findings report for year end December 31st 2025. Welcome. >> Hi. Thank you. Um good morning and thanks for having me here today. Um I'm here to present to you the audit findings for our audit of the financial statements of consolidated um city of Bmpton for the year ended December 31st, 2025 and the entities that are consolidated within. Our report today is per the requirement of the Canadian auditing standards uh to report the findings of our audit to those charged with governance. Um I'll start on page four of our audit findings report which is the highlights page. So, in terms of the status of the audit, at this stage, we've substantially completed all of our audit procedures. I'd like to also take this opportunity to thank the finance team at the city for all of their support during the audit, which enabled us to complete our audit in a timely fashion. Uh to cover some of the items on this slide, uh there were overall it was a clean audit. There were no significant changes from the audit plan that was communicated to management and to the audit committee. Um and they were completed based on the materiality that was communicated to you as part of the planning. Materiality as a refresher was 27.5 million and the audit misstatement posting threshold was 1.1 million. As a result of our audit, we did not identify any unusual or fraudulent transactions or any um u items that should be reported to you in terms of significant control deficiencies. There were no corrected or uncorrected audit misstatements identified this year for the main city or the smaller entities. Uh which is really good. So we will be issuing a clean audit opinion this year pending council approval of course. Uh there were no new accounting or auditing standards that came into effect this year. So it was a a little bit of a normal year for for finance and for audit team. Uh there are some new accounting standards that are coming down the pipeline. We've attached them in the appendices. One of them is going to be a heavy lift which is the employee future benefit standard. Uh we can talk about that uh in a future meeting. Um on page six we've noted the remaining items at this stage. So the first couple items are done. If you go back one slide um the only item that is pending at this point are standard items that should be pending. So that would be your council approval uh signing of the management representation letter and the the inquiry related to subsequent events which has to be done all the way to the date of opinion. Moving on to page six here we're covering uh our presumed risk of fraud for management override of control. So this is not specific to city of Bmpton. It is uh a risk that is required to be included in all audit engagements and that's because management is in a unique position to be able to perpetrate fraud by overriding controls and make it seem that they're operating effectively. Um there is a bunch of procedures that were required to complete. We've completed all of them and there's nothing that came out of those procedures. Everything seems to be operating effectively. Um, we've also completed our procedures related some of the other risk areas that are covered in the next few slides. So, I won't cover them in I won't go page by page. So, pages 7 to 10 I don't have any further comments on. Uh, page 11 provides you with an overview of some of the concepts related to control deficiencies. I just want to point out that for the city of Bmpton, we take a fully substantive approach. We don't rely on controls for for the purposes of our audit approach and audit testing. However, as a result of our substantive procedures, if there are any controls that come across uh as not being um implemented properly, we are required to bring them to your attention. But we didn't identify any such controls that were missing uh and that were significant in nature. Pages 12 to 14 provide you with details of our audit quality framework uh and all the checks and balances that we as a firm have in place to make sure that our audit quality stays at the highest level of service. We've provided you with some links here as well uh for further information. Um so you can take a look at those. With that we get into the appendices. Um I'll point out that appendix B includes some required communications. We've completed these already with the treasurer. Uh but if there's anything that jumps out based on the questions that are listed there, please feel free to reach out to me. Um and then the new accounting standards obviously that I pointed out earlier. They're also included in the appendices. This include this concludes the formal part of my presentation. So I'll pause here if there are any questions. >> Any members have any questions? >> I don't Okay. >> So, I will bring the staff report up after the presentation. Um, and then we can ask any questions on that. Is your presentation finished or is there more to continue through? >> It's done. >> It's done. Okay. Well, I don't see any questions. So, uh, thank you so much uh for making the time to be here. Um, and I will at this time uh bring up uh staff report 7.1. Um, and I believe member Russell has some questions on that report. >> Thank you. Thank you chair through you chair. Uh just a couple questions uh for my own edification on statements. So one of the things I was curious about was uh where software uh falls in the categorization of uh capital assets. So we do have uh through the chair to uh member Russell uh we do have uh it folds under uh facility equipment and software. >> So in the is that part of infrastructure like when the actual >> uh sorry just going back to the sorry just It would be under uh furniture, computer and office equipment. >> Okay. Okay. Got it. And that would be so that has a range of life from 2 to 20 years. So I would assume that it's kind of at the at the lower end of of that gut change of technology. Okay. Thank you. That's helpful. And then uh just in terms of the long-term liabilities, I was curious about the uh the syncing fund deposits >> uh and just that the uh debentures that have been issued. It looks like our our largest debenture is actually got the shortest time horizon. So, how are we feeling in terms of our ability to uh kind of meet the the end of term payment and what would be the risks if if our syncing fund deposits weren't equivalent to the the required repayment? >> Okay, so thank you for the question through the chair to member Russell. Um, anytime and I'm going to speak at the very high level. Anytime a new sinking fund trench is issued, there is a plan and it's built into operating budget to make sure that the payments are actually met, our obligations are met. So, I don't know if that uh answers your question. >> Uh yeah, I think so. It looks like like the interest uh that that is on these looks pretty low. So, I'm guessing they're in kind of short-term uh investments like we're not counting on the the interest earnings to help with the the funding necessarily. That's just gravy kind of thing. >> Correct. Yes. >> Okay. Okay. That's helpful. >> Those were all my questions. Thank you, chair. >> Thank you so much. We have councelor T. >> Thank you, Mr. Chair. Um just questions regarding the uh the increase in uh tax rece tax taxes receivable uh from last year to this year. Um seeing uh sorry till before 2025 the 201 million how much is that as a percentage of the uh overall tax uh that is received? So through the chair to councelor tour uh that's about 10% of the billing. Um we are the staff is taking a comprehensive approach to kind of tackling um uh increase in tax receivable obviously within the legislative framework. So we are really pushing for uh pre-orders pre-authorized payments. We are doing uh early outreach to uh high level uh accounts uh working closely with the strategic communications and 311. So it's a you know comprehensive approach but uh obviously there's only so much that can be done in light of uh you know both increased billing and as well as the uh overall uh economic uh conditions >> and h how much of that is uh in any way correlated to the 2024 receivables like what's the overlap do we have an idea >> uh we do I don't have it with me right now but we can definitely get back to you on that. >> Okay. Thank you. >> Uh, no further question. Okay. Thank you, Councelor Tour. Uh, so with no further questions, um, I have a motion moved by councelor Tur to receive the presentation and the staff report. All >> the >> and approve the audited financials. All those in favor? The motion carries. That will bring us to 6.1 uh which is a staff report for public works and engineering facilities maintenance audit 2026. I'll turn it over to staff for the presentation. >> Thank you councelor Kenan. Um Claire the director of audit will join us shortly. Um so once she joins she'll deliver her message and answer questions uh if she could. So for now uh we can just go go ahead start like the report presentation. Okay. >> Yeah please start. >> Good morning. Today internal audit is presenting two facilities maintenance audit. The public works and engineering facility maintenance audit and the transit facilities audit. because of the two operating areas have distinct responsibilities but share some systems contracts and control processes. I will begin with a brief overview of how the two audits relate to one another. Next slide please. Facilities maintenance is delivered through several operating units across the city within public works and engineering. The facilities operations and maintenance division in short FOM maintains a broad portfolio of city-owned properties including office buildings, libraries, parking facilities, leased properties, and other municipal buildings. Transit has its own facility maintenance team because its operating environment is specialized. Transit maintains its operation centers, terminals, and bus shelters. Other operating units within community services also maintain certain city facilities. Those operations were outside the scope of these two audits. However, some of the issues and recommendations identified today may also be relevant to their maintenance activities. Next slide, please. Although the two audits were conducted separately, they identified several common themes. This include procurement and vendor management, preventive maintenance oversight, city works imple implementation utilization and invoice review and approval. The underlying circumstances differ between the two operating areas and each report contains recommendations tailored to the responsible division. However, the recurring themes indicate opportunities to strengthen facility maintenance controls and more broadly cross the city. Please skip slide four and forward to slide five. We will begin with the public works and engineering facility maintenance audit followed by the transit facility maintenance audit. After I present the audit observation, I'll pass on to Raj China Tina who will speak to management action plans. Next slide, please. For this presentation, I will briefly cover the agenda items. Again, FOM will discuss their management action plans. Then the presentation will revert back to me to discuss the next steps. Next slide, please. The audit assessed the whether FOM's facilities maintenance operations are operating effectively. We focus on whether maintenance activities are supported by clear processes and oversight, whether facility conditions are routinely inspected and that used to identify maintenance needs and whether preventive and demand maintenance activities are properly planned, tracked, completed and monitored. We also assess the compliance with applicable legislative, regulatory and contractual requirements where vendors are engaged. Next slide, please. The audit covered FOM facilities maintenance activities from March 2023 to February 2026 because City Works was implemented in February 2025. Our review of work order management was limited to the period following implementation. City works is a computerized maintenance management system. Our work included reviewing policies, contracts, and supporting records, interview staff, conducting facility walkthroughs, and performing sample testing and data analytics across preventive and demand maintenance related activities, including inspections, building condition assessment, work orders, and invoices. Next slide. The highest rated finding relates to procurement controls over vendor performed demand maintenance. First, we identified nine vendors, each with cumulative spending above the $25,000 procurement threshold without contract, purchase orders, or documented procurement exceptions. Second, we identified $1.72 million in spending across 12 vendors that was processed outside established purchase orders. Part of the issue relates to a clause that appeared in at least a dozen RFPs which appeared to testitly permit additional competitive pricing for individual repair exceeding $5,000 even where a contract or purchase order were already in place. Third, we noted that an HVAC preventive maintenance vendor completed $215,000 in repair work through 93 invoices, including nine repairs, ranging from 5,000 to $23,000 that appear to extend beyond minor or incidental work. Finally, nine of the 25 invoices reviewed did not contain sufficient labor, a material breakdowns to verify charges against contract rates or coded pricing. These issues reduce transparency over vendor spending, weaken procurement oversight, and limit the city's ability to demonstrate compliance, appropriate contract usage, and base value. However, internal audit did not identify evidence of fraud, misconduct, or personal benefit. The funding relates to control design, documentation and procurement process gaps. Next slide, please. The second finding relates to city works. Implementing city works was an important step toward automating maintenance, operation, and improving oversight. However, the system is still in transition and does not yet provide complete visibility over maintenance activity. External vendor preventive and demand maintenance work is not currently tracked in city works and internal demand maintenance work orders are not consistently recorded. City Works contain approximately 28,600 work orders as of February 2026, compared with 44 annual 44,000 annual maintenance activities estimated in the 2025 service plan. Internal demand maintenance work orders are also generally linked to business to buildings rather than individual assets. This limits FOM's ability to track repair history, recurring issues and asset replacement priorities. We recommend further configuration of city works more consistent use of the system for internal demand maintenance and prioritized asset level tracking where feasible. Next slide please. The third finding relates to in-house demand maintenance. We reviewed 10 internal work orders and found that six remained open for extended periods ranging from five months to more than one year with limited documentation of supervisory review or followup. We also noted that 99% of 1900 demand maintenance work orders were categorized as medium priority. This suggests that the available priority levels may not be used effectively to support resource allocation and escalation of urgent issues. In addition, 10 building condition assessment items rated as poor remained outstanding, including one item where a life safety concern had been noted. We recommend strengthening documentation, priority assignment, supervisor review, and tracking of outstanding maintenance items through to completion. Next slide, please. The fourth finding relates to preventive maintenance performed by external vendors. We reviewed 35 preventive maintenance activities across 15 facilities. Most of the activities reviewed were completed as required. However, we identified opportunities to improve tracking documentation and escalation. Backflow preventor inspections were missed at three facilities following vendor performance issues and contract termination. Interim arrangements were not documented for 11 additional activities. Supporting documentation was not readily available. Internal audit completed alternative procedures and confirmed that the work had been performed. We recommend finalizing the preventive maintenance standard operating procedure, retaining vendor service report, monitoring work against required frequencies, and establishing escalation processes where maintenance might be delayed or missed. Next slide. The fifth finding relates to inspections completed by FOM staff. FOM has established the standardized the checklist within city works. However, our review identified gaps in completion and documentation. Of the 35 inspections reviewed, six were not performed and five were marked as complete in city works despite incomplete or missing checklist. Some of the missed inspections occurred during the initial city works implementation period and were particularly contributable to a system scheduling issue. management worked with IT to reconfigure the scheduling logic. After we communicated uh this observation to FOM, we recommend additional staff training and supervisory oversight to ensure inspections are completed and accurately documented. Next slide. The final finding relates to vendor invoice review and approval. As background, vendor invoices are processed through Oracle business process management or BPM. BPM is the city's invoice to pay accounts payable workflow. It was implemented through a phased approach beginning in 2021. Invoices are scanned into the system and routed to the appropriate business unit for review and approval before payment. We analyzed more than 8,000 invoice transactions and selected the 287 invoices for detailed review based on duplicated payment risk indicators. We identified the nine invoices that were resubmitted and proved twice. Five were detected by accounts payable before payment. However, four invoices totaling $6,833 were paid twice and were not identified until our review. We also identified one additional invoice totaling $3,277 that was paid twice for the same work under different invoice number different invoice numbers. The automated system can identify exact duplicate invoice numbers. However, it might not detect a duplicate when the invoice is captured under a slightly different number during the imaging process. We recommend that approvers verify the information recorded in BPM against the original invoice image and supporting documentation. We also recommend periodic reviews of transaction data for duplicate payment indicators and follow up with accounts payable to recover the identified overp payments. Next slide. Overall FOM has an established the foundation for managing facilities maintenance across city own properties. There are maintenance processes in place. Specialized vendors are used for technical and regulated work and city works has been implemented to support more consistent tracking and oversight. For that reason, we concluded that the control environment is generally adequate. However, this conclusion should not be interpreted to mean that the controllers are operating consistently in all areas. The audit identified several areas where controls require meaningful strengthening particularly procurement controls over vendor performed demand maintenance. These are significant control gaps because they reduce transparency, weaken procurement oversight, and limit the city's ability to demonstrate appropriate contract use and best value. The audit also identified opportunities to strengthen pro preventive maintenance oversight, city works utilization, work order documentation, inspections, and invoice review. The overall message is that FOM has a solid operational foundation, but stronger controls, more specific procedures and more consistent monitoring are required to support accountability and effective oversight going forward. Now, Raj China, director, the facilities operation and maintenance division will discuss their management action plans. Over to you, Raj. >> Thank you, Mia. Thank you, chair and members of the audit committee. Before I begin, I would like to acknowledge and thank internal audit team CLA and her team actually for the work that they completed on this review. We appreciate the professionalism, collaboration, constructive approach throughout the audit process. Management has reviewed the findings and recommendations and agree with the recommendations. We view this audit as an opportunity for us to strengthen our processes within our facilities operations and maintenance division. I will now briefly walk you through the management action plans related to audit finding. A as outlined on this slide. Can you go to the next next? Yeah, thank you. So, as outlined on this slide, there are five key actions that we will undertake. First, we will work with purchasing to create clearer rules and guidance for how maintenance work is purchased. We will also provide training to staff so everyone understands the requirements of purchase orders, codes or formal procurement processes for transactions exceeding $25,000. Second, we will jointly review reoccurring demand maintenance expenditures by service category to determine the most appropriate procurement strategies moving forward. Third, we will also ensure that we clearly distinguish preventatively maintenance vendors from demand maintenance vendors to ensure work is procured through the appropriate process. So the intent would be to ensure that preventatively maintenance vendors only do PM works and demand maintenance vendor only do TM works. Fourthly, we will strengthen invoice documentation requirements and provide additional staff training on invoice verification and approval. Going forward, vendors will be required to provide sufficient details on invoices, including breakdown of labor, material, and service dates with additional details. Finally, we will implement periodic management reviews where managers will be checking the data and reporting to monitor vendor spends, purchase order usage, contract extensions, and non purchase order activity. I would also like to state that the guidelines and policies will be adhered to effective effective immediately uh as far as procurement is concerned and we will work with purchasing to ensure that purchase orders are in place for all the procurement related and non-PO activities are conducted where non-po activities are conducted. All of these actions are targeted to be completed by Q4 and we have already taken uh some actions to ensure that you know there is no uh compliance issue as far as the poss gaps are concerned. I'll now pass it on to Mia again to who will discuss slide 18 for from procurement standpoint. >> Thank you Rod. >> Thank you Raj. Um purchasing only has one slide so I will present on their behalf. Next slide. Purchasing has agreed to clarify purchase order payment requirements and approve the exceptions in updated purchasing bylaw. Purchasing will also ensure that future procurements do not include wording that permits additional quotation where an existing contract and purchase order are already in place unless an appropriate exception has been approved. These actions are scheduled for Q3 and Q4 of 2026. Back to Raj. >> Thank you, Mia. So, under finding B, next slide, please. >> Yeah, thank you. Under finding B, management agrees with the recommendations related to city works and recognizes there is an opportunity for us to improve how maintenance activities are tracked, monitored, and reported. I would also like to state that city works was uh recently implemented in 2025 fully. So this is a brand new tool for us as far as uh centralized maintenance uh manage computerized maintenance management is concerned. So the first action is to improve how work completed by external contractors is tracked within city works. We'll work with our internal IT team to enhance the city work system. So we better track vendors information maintenance schedules work completed on city assets in one centralized location. So we'll open up a new module where vendors actually will have their data tracked within the city works. The second action is to improve the use of city works on day for day-to-day operations and repairs performed by city staff. We will provide additional training and communication to staff so the system is used more consistently across the organization. The third action is to expand the asset tagging and asset identification within city works. This will mean linking maintenance activities directly to specific piece of equipment such as boilers, generators, elevators, HVAC units and other building assets. Doing so will provide us better information about maintenance history, reoccurring issues, asset condition for specific assets. All of these actions are targeted to be completed by Q2 of 2027. Next slide, please. So, this finding is focused on improving how repairs are tracked and monitored. First, we will complete and provide refresher training to staff to ensure City Works is used consistently for all demand maintenance work. The training will focus on accurately recording work order requests, assigning the appropriate priority levels, attaching supporting records where required, and ensuring supervisors review and close out the work orders consistently. Secondly, we will work with it to improve the system reminders and alerts so overdue repairs and inspections are identified earlier and completed more quickly. And lastly, we will work we have already started entering building inspections and condition assessment data from the building condition audits into city works. So identified issues can be tracked and followed through the completion. All of these actions are expected to be completed by Q3 of 2026. Next slide please. Yeah. So management agrees with the recommendations rel related to vendor performed preventative maintenance and has already developed several actions to strengthen documentation and performance monitoring. The first step as Mia mentioned is to develop a formal internal SOP for managing preventative maintenance activities performed by external vendors. This SOP will help staff. So this will be our internal SOP. This SOP will clearly define roles and responsibilities, documentation requirements, escalation procedures, monitoring expectations, and in addition to that, FOM already utilizes vendor performance scorecards and will continue using those tools to address situations where inspections are missed or vendor performance issues are arises. For the second action, FOM will improve documentation processes that includes vendor monthly reports by centralizing maintenance documentations within FOM SharePoint page. The third and the last action to address this finding uh is to improve how vendor performed maintenance activities are tracked. We will continue to work with IT to implement additional city works layers and functionality for contractors management and in the intrim establish a tracking solution within the SharePoint pages. All of the actions are targeted to be completed by Q1 of 2027. Next slide please. For this finding, management agrees with the recommendation and will provide additional training to staff. We're required to ensure inspections are completed consistently and documented appropriately. This includes ensuring inspection checklists are fully completed, supporting documentations is maintained and supervisory review processes are followed. We will also develop ongoing training program to reinforce expectations and promote consistency across the division. All of these actions, they will be completed by Q3 of 2026. Next slide, please. The final finding relates to invoice reviewing and approval process. Management agrees the recommendation with the recommendations and has already begun implementing corrective actions. The first action is to strengthen invoice verification procedures. Staff will will be required to verify invoice numbers and other key invoice details when processing invoices through the BPM system to help identify data entry or scanning errors before payment is approved. The second action is to perform regular reviews of payment records to identify any potential duplicate payments. F1 will conduct by by annual reviews of its financial transactions to identify anomalies or confirm the invoices have been paid only once. For the third action, we have already recovered the monies that were which were double paid to the vendors. So this item was already addressed. All actions are targeted to be completed by Q3 of 2026. Thank you again, Mia, and uh your team. And I would like to conclude by saying if the committee has any questions, me or my staff can answer those questions. >> Thanks again, Raj. Next slide, please. Management has agreed with the recommendations and implementation has already started for certain actions. Internal audit will follow up on the status of the management action plans and report the results through the established the follow-up process. Next slide, please. This concludes the public works and engineering facility maintenance audit presentation. We will now take Okay, I I'll pass this to Claire. Sorry I was late. Uh I just want to uh recognize the audit support that we received from the uh three groups within the public works and engineering department is uh the facilities operations and maintenance Dave S and Dave Turpin and Floyd Mofat and also the group that's named asset energy management and capital planning BA can sab I apologize for the pronunciation here. also the support from the purchasing division Sha Morgan Claudia Santa Ramo Rajeshin and also the accounting group that we've spoken to accounts payable and Maya and and her staff but last but not least we worked very closely towards the end of the reporting stage with Raj China who just presented the management action plan also uh the commissioner uh Peter Platis we appreciate their collaboration and support thank Thank you. >> Well, thank you, Claire. Um, and and uh just usually you give that at the beginning of the meeting, but given the fact that you uh I'll show your dedication, even a a car accident to be rear ended this morning didn't keep you for showing up to audit. So, we're happy that you're okay and we thank you for getting here in a timely fashion. >> Thank you. >> Um, so we do have questions from members. I will start with councelor Bar. >> Thank you through you, Mr. chair and just want to say thank you to Claire and all the departments for working together. Um this presentation was great actually and um there's so many improvements that we can make and making sure that we're strengthening the city of Bmpton and being more efficient. So on slide 11, I had a specific question on for slide slide 11 um where we look at work orders not fully tracked in city work. So, does that mean that we don't have a software that we can track that the city of Bmpton can use or is it being used or is it there but it's not being used? Cuz when you look at the numbers here, it says city works contained approximately 28,600 works orders compared to approximately 44,000 maintenance activities. So, just clarification on that. Thank you. >> I I'll pass it to Mia to to answer the question >> through the chair. So basically, city work is the software um the city has uh implemented starting from last year around uh February 2025 for FOM. Um up to now the system has not been fully utilized because sometimes you know people have been used to just uh call or send email to the team uh basically for the repair work required. So that being the case, no work orders will be logged into the system. So that being said, um I I guess the users they're they're still in the learning process to fully adopt to the system and also um u the internal staff training is required even for that situation if the requirement is just coming in through emails or or or phone call once they finish the work they supposed to create a work order in the system. um only by doing that you know like the management will have a full picture in terms of like the volume of the works what have uh what has been fixed. >> Thank you Mr. chair and maybe just following up to that. So if um they're still not fully on the system, I think you know when we go to slide 19, we look at the management action plan. Um we do talk about strengthening with it. But um I do think whenever we go into any program, a program comes online, it should be enforced, you know, more strictly just because we are moving fast as a city. We see so many programs, projects coming through. Um just seeing that part of slide 19, making sure it's enforced, you know, maybe on a timely matter, making sure that's it's um a little better enforced. >> Yes. So, and council bar, we'll actually ensure that staff is retrained and we track all the work orders within the system. >> Perfect. >> Yeah. >> And then um last question was I guess the duplicate payments. Are we getting money back for >> we we have already received the money back council chair? Yeah. Thank you >> through the chair. Sorry. >> Thank you. >> Sorry. Apologize. >> That's all the question. Thank you, Mr. Chair. >> Thank you, Councelor Bar. Um, next on the list, we have councelor Tour. >> Thank you through you, uh, Mr. Chair. Um, thank you to Claire again. Uh, just echoing what uh, the chair said on your dedication to, uh, audit and, uh, showing up to this meeting today. Um, I have a bunch of questions, but I'll go in order. Um I see that in the audit findings that there was um we didn't identify um you know this is not a case of fraud or um you know um like a malpractice on um on staff's part but on the I I want to understand on the operational side when we're doing purchase orders outside of existing contracts and if they're totaling up to such large amounts uh I want I want to understand what this operational challenges may be. Um like I I get it. It's the interpretation of the purchasing bylaw and how we've always done work. Um, but if if somebody could get into detail about that because I I don't want members of public that may be listening to this or my residents to leave with that impression that somehow, you know, we're just taking advantage of our existing rules um and and getting involved in purchasing activity that's amounting to millions of dollars. >> Thank you, Council through the Chair. Thank you, Counc. Uh, so there was uh there were two parts to it actually. There was what first uh was uh the demand maintenance which we actually acquired uh through the vendors directly and that was uh misinterpretation error and the second one where we actually had the purchase orders but uh PM vendors actually did the DM work. There were uh there were there were languages in the documents where actually which gave the uh which gave the allowance to staff to actually get quotes from the PM vendors and get the work done if it was expeditiously expeditiously required. For examples, I'll actually ask one of my managers to give you maybe you know some examples so it is more clear for you. D my contracts manager will be giving some examples. So through the chair um there's several reasons why we may be using vendors to perform work that um one would be to expedite the work. So if you already have a preventative maintenance vendor who is on site performing work and they identify something that needs to be repaired right away that the vendor is able to repair, then a lot of it in in order to expedite work, we would have that vendor just complete the work. Um, in other instances where we're engaging DM vendors to come in and quote work, uh, we've always allowed operational departments to engage other uh, H, we'll use HVAC as an example. We have four HVAC vendors to come in and get comparable quotes to ensure that we're getting proper value for dollar. In this situation, we're using vendors of record. Um, these are vendors who have been through the bidding process already. We have their certificate of insurance on file. We have their WSIB on file. So, operational departments are utilizing vendors who have already been vetted through the city in order to either expedite work or to get competitive pricing. >> Does that answer through the chair? Does that answer your question, Councelor Torque? >> Uh, yes it does. And and and that's why I wanted to ask this question to to get that understanding that uh the reality is when when you're on a job site, if somebody's already on the roof, they find another issue that they can fix right away that it that is saving us time. It is also saving us money. Uh that's I I want to make sure that we capture this operational part of the work uh in the updated purchasing bylaw so that I I I don't want to say an updated purchasing bylaw that comes back and makes this process less efficient where where you don't have the authority or the the team that decides the work that happens that day doesn't have the ability to execute the work that day that you send you know the contractor that's already on site uh doing one job, you send them back home and they come back 3 months later to perform the second part of that work. U want to make sure that any of these operational challenges are considered in that updated purchasing pilots. But they thank you for those examples that really helps clarify some of this. >> Thank you. Sorry. Um sorry, councelor T. Just I'm going to ask for some clarity just on uh your questions while we had um the gentleman. Sorry, I never caught your name. Sorry, it's Dale. >> Dale, sorry. And if I may, um Dale, just a quick question just based on councelor T's question to you there. >> Um my understanding is we have preventative maintenance. Um and that is someone who gets a contract to go around and fix certain items and it's and I may be wrong, but the SOP in there would state that they couldn't do other maintenance because essentially they're providing themselves the work. Hey, I found this. It's broken. There's no really check and balance. Would I be right in saying that that would be either that's currently and maybe I don't know if auditor staff could uh comment on that that the the measure is put in place actually to protect the city um where they shouldn't be doing that and I believe that's already part of uh what should be being followed under those procurement guidelines. Can can I get someone to answer that for me? >> I happy to take that one for you. >> Sure. uh if uh our city clerk can be kind enough to go to finding a first page and the second paragraph uh that's there. So there should be a differentiation between preventive work and demand work which is repairs right and in the RFP for preventive work they do allow minor work to happen but what we found is some of the invoices that ranging from $5,000 to $23,000 were being done by preventive maintenance. So it's not always small it's quite a bit. So, so to to my question, the answer is no, they shouldn't be doing it. And what we found through the audit is not only are they doing it, but they're doing it in a mass scale for something that should have went out for procurement. So, the underlining issue is two problems. One, we're not following the SOPs for what they should be doing. And two is we're exceeding the amount that is given for those quick fixes. These are items that should be going out for procurement. And that's where, you know, some of my questions were laying is that's a big problem. somebody's coming here doing essentially projects and works inside our facilities that should have been a tender or done by another contractor to verify those pricings in those costs. And I'm going to ask one more question on this. Was that paid through an invoice or paid through a pecard and some of these incidents of 20,000 or $10,000 invoices? >> Again, I'll take that question. So from PWE side the the main payments they have processed is through rec check requisition because it's not paid through PO is mainly check requisine there's some little bits as through P card is not a big issue there it's through check requisition >> okay so to to councelor T's point understandably if something is small there is a leeway currently within the SOP or the contract that allows small amounts of maintenance to be done if it needs to be done in a timely fashion. the what we're seeing here today um is an exceeding amount of to the credit limits of where you can go of 23,000 and my question is what is the total amount over the last three years that was done by uh preventative maintenance um outside of a PO >> just just a second we do yeah >> oh let me hand handle that question we did look into the numbers and the numbers are fairly big Okay. Can I get what that number is? >> Yeah. Council Kina actually let me just confirm your question. So your question is on the preventive maintenance, right? >> Correct. >> Okay. So actually our testing has not found you know like problems with preventive maintenance. They pretty much stayed within the contract and based on the contract rate and agree upon terms. So the main issues we found they were from demand maintenance >> demand maintenance. >> Yes. Like the more related to the repair work. >> Okay. Mia I'll take over this question again. Okay. So I have found my paper. Um so here's the thing. So the city is divided into two large groups. Okay. Group one consists of recreation and community services. Group two consists of FOM transit fire parks. Okay. These two groups have established different contractor for PM and DM work separately. So what we found that is what they all said was correct. Some of the department are using another department's purchase order but they're they're using their contractor but not the purchase order. So actually the amount that was spending on nonPO work is humongous. >> Can I have the number please? So if I were to divide it by groups, are you talking totally like for instance FOM uh spent 200 okay roughly about $300,000 in the contract period that was outside of the PO and the other group I I won't even say but you know there's just quite a bit yeah outside of it. Okay. Um thank you. Sorry I didn't mean to jump in councelor Tur. Just wanted to get clarification on uh your comments. I apologize. It actually went a little bit longer than I anticipated. Um do you have any other questions? Thank you. Uh thank you, Mr. Chair. Yes, I do. Uh but thank you for those additional questions. That helps uh clarify some of this. Um my additional questions were regarding the duplication in payment uh for invoicing. Um, I'm having trouble just understanding is this is this an issue with uh staff sending in multiple requests or is this an issue with our our system that we're using not being able to identify uh duplicate invoices? I'm assuming it's it's identifying based on images of invoices. And I see like I I I see in that attached report in the appendices uh where it's a one-digit, you know, is off uh on on the two different invoices. So it creates two different invoice numbers. But is that an error that's happening on our system or is that an error like a human error that's happening? >> I'm happy to take that questions through the chair to council tour. So the first line of defense is invoice approval itself. You review, you approve it. Now if you don't catch it, it goes to accounts payable. They deals with millions uh tens of millions of accounts payable going out. They do analytical work. They could sometimes help spot it, right? And we come in, we're the third line of defense for the city. And that is typically what internal audit usually perform. So we spot the whatever we could find in terms of our sample right. So this is the thing. So uh counselor um councelor tour you were asking whether the percentage we found the invoice number was significant because if you think about how many millions the truth is as auditors we go through um duplicate payment scan all the time. You're not supposed to find that many. Usually for us is going through the motions. So in a rare circumstances you find a few right but in these cases so even if with the uh public works if let's say we scanned 81 81 100 um 8100 and 81 invoices right we could not go into details of each invoice all we could do is use audit analytics to see which ones look like possibly could have a um duplicate payments issue and then we would zoom in that 100 200 180 invoices then we find that right but we don't have time to go through so lots of invoices. So Claire, I appreciate I believe councelor Tur's question. Is it a computer error or a human error that's causing duplicates? Is somebody signing off as a person saying these are two separate invoices or was this put into the computer system wrong which made us paid? And councelor Ter, if I'm wrong, please step in. But I believe that's what he's asking >> in terms of PWES invoice reviews issue. Nine out of them comes from a scanning error the staff didn't catch. When you're proving invoice, you're supposed to look at what is the invoice image and what is the number that's being scanned. Let's say if the six was scanned into eight, you can reject that and that won't and the system system won't be, you know, you won't get a duplicate payment. But if you're approving invoices without reading the images and then it could possibly be paid twice. >> Thank you for that. So, so that approval is happening, Mr. Chair. Sorry. Is that approval or is that um happening at the stage with public works or is that happening at the accounts payable team? >> It happens >> where where the numbers are not matching up. >> Okay. Through the chair. So councel tour the very first that's what I was saying at the beginning. The very first defense it comes to city staff for approval first before it goes to account payable to be processed. So the very first person who sees those invoice gets routed is city staff who's approving it from management side. Okay. And then it goes to accounts payable. They are the second line of defense and they do catch some >> and and okay know that that helps um that answers the question. But on the the second line of defense, the or or computer systems um can you tell me why there's reasons where in some cases it has processed that payment, the duplicate payment, but in some cases it was able to stop it? Like what is allowing that system to stop some of the payments versus approving some of the payments? Because accounts pay people also conduct analytics. When they see sometimes the same amount, right, slightly different invoice number, they will look into it, but they have a volume of tens of millions of dollars to process each year. So relying on accounts people to do a complete analytical work, identify every single duplicate payments is not something. >> Maya can answer the the rest of this. >> Sorry. uh through the chair to councelor tour. I'm going to try to maybe explain the process uh how this happens from the system uh perspective. So we have the uh OCR the optic reader that uh reads the image of an invoice and in some cases where the image is not of the very high quality it would transpose certain numbers. So six to eight generally or five to six. Uh so this is kind of the first step and then to Claire's point that goes into uh workflow with the operating department and finally ends up with uh uh accounts payable. I would like to say that uh we have uh between um uh accounting services our system administrator and IT we did read uh raise a ticket with Oracle. This is Oracle tool uh this optic reader to see if there's any upgrade or if there's anything that they can do to kind of you know enhance the quality of the uh of of the uh OCR. So that's uh that's with Oracle right now. So I don't know if that helps. >> Thank you. And and that was through Mr. Chair. That was going to be my follow-up question on on that IT side of things. Um and that helps answer that question as well. Thank you. Thank you. >> Thank you, councelor Tur. We have member Russell. >> Is my mic on? Great. Thank you. Through you, chair. Uh, just a follow- on question to councelor Tours. Maybe I'll start with that. I have a few questions. Um, but with respect to the vendor invoice review and approval, I have the uh I don't know if I'd call it a pleasure, but the occasion to approve a lot of invoices myself. And I will say that I think as a as a reviewer you are looking for certain backup etc. Would I know that an invoice of the hundreds of invoices I review you know has a duplicate that has a different number? I'm not sure I would catch that. So I'm glad to hear that there is kind of that secondary uh approval or review that happens through the system. I was curious, Claire, um how how was internal audit able to catch the instances where we actually had a duplicate invoicing that had uh it was a separate invoice number and yet was for this the same thing. Was that through your uh analytics tool or was that really a manual catch? So um through the chair um as uh Mia discussed earlier in one of the slides uh basically what happened is we look at the entire invoicing and we first perform an anal analytic scan. You're looking for similar dates, similar location and similar numbers and you identify those are the risk factors, right? And then you can only zoom in a small portion of the invoice to see actually looking at the imaging to see if they are the same. So sometimes because we are doing that. So we caught some of that. >> So you cut it through like manual review analytics first and then go to the manual. So if you look at every single you can look at the 30 invoices with if you don't do the analytics you probably won't find any. But if you did analytics because they are the similar dates, similar amount and then you would look into those to see. >> Got it. >> Yeah. >> And presumably with this hopefully upgrade the system will be able to use similar analytics based on what we're seeing today right in terms of system. So I think that's great that that is an avenue that that we're looking at. >> I think Mia wants to supplement that answer. >> Yeah. So she's the chair to the chair. So um member Nico uh to just address your question mainly it's a you know excel um analization work we did because the data is manageable right if it's uh becoming like a large enough we will be using ACL but right now like to answer your question it is excel by filtering all the risk indicators and once we complete that we zoomed in like the ones uh presented the risk indicators and we actually looked into you know one by one the detailed invoices. >> Thank you ma'am. I appreciate it. >> Um for you chair I have some additional questions. Um just wanted to clarify with uh in the internal audit team in your detailed report in table three you had listed some of the uh expenditures that weren't charged through purchase orders and also it highlighted a couple where the contract itself uh provided the threshold of 500,000. So I was curious just looking at kind of the the largest example there which was vendor 10 at the top of the table uh for the it was an extensive number of invoices right for those invoices were they individually below the 5,000 threshold. Sorry, just to clarify through the chair to citizen member Russo, >> you're talking about 319,274. >> Yeah. Of total spending outside the PO. So on the individual invoices from the vendors, were they below that threshold or were they >> below the 5,000 threshold? Yes, we found u in fact the threshold itself isn't always being consistently applied. Sometimes people do get a quote when it's 3,000 and sometime sometimes staff don't get a quote when it's 7,000. So it's really not consistent. So yes, within the 319,274 there are lots of amount that is below the 5,000. >> And I'll I'll tell you why I'm asking. I just think there's a there could be the perception that we are giving the vendor a bit of a road map for how to operate, you know, below that threshold. like to me from an internal controls perspective those thresholds are in place for the city internally to manage versus necessarily um sharing those with vendors. So just uh I could I couldn't recall if that was one of the action items was to ensure that we don't really have that within the contracts. I I think our purchasing director is actually here. Um you know in order to confirm this kind of findings we usually talk to our expertise who's in the purchasing and I think Marlon is also the commissioner sale also purchases under him. So maybe I would invite Sean and Marlon to speak. I don't know Marlin did you want to speak >> through the chair to member Russell. It's a standard practice for the city to actually uh put out what our procedures are. So, as part of the contract, the vendor would know what those procedures are. >> Thank you. >> So, one final comment through you, chair. Uh just when I looked at this and also when I looked at transit, there seemed to be kind of a central theme which I know is probably why you you looked at them together, which is really that even though we do have a central procurement team, procurement and purchasing team, it seems like I don't I don't know that we're really centralizing the procurement process. So the decentralized procurement and approvals process and kind of that lack of common understanding on definitions seem to be the common underlying theme. So one of my questions is while all these recommendations and the actions of management sound really uh good and I think there's lots of opportunity there has there been any consideration for uh centralizing those processes so that we have common controls >> and I don't know who I should be I can take question now um so there was a 2019 report and it's actually authored for community services the efficiency study is done by black line and there was a uh about four recommendations on the facility maintenance area. One of them is centralization and actually right now when we talk about all the C's contract for facility maintenance for instance out of the 39 that is what what we roughly looked at 34 of them were established by facilities operation maintenance because that was as a step to centralizing the facility maintenance. So for instance the gentleman who was just standing here Dale Turpin and they're one of the they're the main cities contract administrator for establish contract for all department who has common facility maintenance items. Now you have also some specialized um facility maintenance for instance later on you'll hear from transit they have some specialized stuff that that only they do of course it makes sense for them to establish like the hoist for repairing cars and stuff like that right it'll be established by them but there are some common elements those are done by the FOM group not sure that answered my question. I I think there's common uh controls and for regardless of the specialty knowledge required to contract with the organizations. I guess that was my point is that the central controls are all the same. Yes, you would have different people involved in the procurement discussions >> but some of the underlying controls I would argue are are similar. >> Yes. >> Right. >> Yeah. So sorry you're talking about controls. So for instance the very first control is our purchasing bylaw. Everybody is supposed to abide by the bylaw. The bylaw has very clear thresholds that beyond a certain thresholds you must involve vendor through the purchasing department which is why I was going to invite Sean if you wanted. We can have Shan explain the purchasing control that is applicable to every single unit of the city operations. Okay that is one of the things. So above 25,000 you must have you cannot no longer do a direct purchasing above $100,000 you're supposed to go out to public for RFP between that two number 25,000 and 100,000 you can do a invitational for three or four vendors within the city right to thank you >> thank you councelor blessing >> thank you Mr. here. Um I think a lot of questions have been asked. Um I don't I guess some of the things that I didn't understand um with respect to uh we'll go with the oracle the scanning document. um with respect to uh you were going to walk us through um kind of what happens if that uh invoice is uh um is unrecognizable and unreadable at that point once it's scanned by the system and um does that system then send off a warning to say that something's wrong or is it just a carry through because it grabbed it made an aid to six and thinks that it's okay. >> So through the chair through council plesi if >> no. Yeah, there you go. >> I can ask >> your mic was on. Sorry. >> Perfect. Thank you. Uh if the numbers are totally off, the system will flag and kind of highlight the field with the invoice. Uh with these cases, I guess the system itself uh was fairly certain that was reading correctly. is I said they're very either six or eight. So it didn't really flag >> uh flag that field because it was so close >> and I guess I'm not understanding where the back stop is then is we just trust that the system works. >> Obviously it doesn't. >> So we trust that it works and then we don't >> there's no checks. I I I suppose to because the next step would be really with operating department because the correct invoice is attached as part of the workflow. So whoever's approving the invoice should actually pull up the invoice as a backup and confirm that the numbers correspond and then the numbers are accurate >> and in these cases that didn't happen. >> Correct. >> Okay. and on a go forward um I guess it's as simple as that person looking at the invoice signing off on it like we obviously identified the individual that's why the request for training fantastic but on a go forward it's I believe it's simple as signing off on what invoices need to go to that department >> correct >> that's kind of where we're >> correct yes >> okay um as for the city works um the implementation of the February 2026 uh city works is are we seeing I I I I didn't check to see what this audit when this audit happened. I'm assuming it happened prior to to that city works or was there overlap? Claire, >> you mean this audit? Yes, >> this audit we just our last um so for city works our city works was implemented in February 2025. Our field work ends in >> I had a 2026 number. Sorry in I thought I could we pull up the um >> finding >> I'm sorry I could have swore that it said 2026. It's finding B I believe >> approximately >> 11 >> w were recorded in city works as of February 28 2026 >> and city works was implemented you said in 2025 >> yes city works is implemented in 2025 our field work ends in February 2026 we had one year so we had 28,600 uh work orders but annually according to FOM staff service plan they are supposed to have about 44,000 work orders altogether. Everything. >> Okay. >> So, we're missing a chunk here. >> And and so from the before and the after, are we thinking that city works is going to catch the issues from the before City Works was implemented >> and this is going to fix the problem? >> Sorry, Councelor Palashi is through the chair. What is your question again? I think um I think I'd like to go in camera. I think I have some questions um that maybe need to be asked uh in camera because of uh legal I've sought legal advice and and um uh madame clerk if you can identify the rationale. >> Yep. to you chair. If there's concern that there may be litigation come out of something, then that would be >> um the first session >> would be pursuant to 2392E potent litigation or potential litigation, but I'll defer. I believe our city is online. >> That would be correct. Uh Mr. chair that we would we would go through that exemption section 239 sub 2 sub E. Can you hear me? >> Yeah. >> Yes, we can. Thank you, Mr. Solener. >> Okay. So, you move >> Oh, I'm happy to move into in camera after everybody's asked their questions if there's any other questions or do we want to stand this down and carry on with the public? >> I have a couple motions that I was going to put forward on this item. >> On this item. >> So, if you want to just It's your call, Councelor Bush. what you would like to do. >> So, let's st I I would like to see those motions. Um, can we stand this item down, get through with the rest of the business, the rest of the items? I think there was the >> come back to >> come back to that. Okay. >> Absolutely. >> Okay. Um, okay. So, we'll stand this item down and we'll go to 6.2 uh which is a staff uh staff report regarding transit facility maintenance 2026. And I'll hand this over to Claire. Come over here. >> Right. We can just wait. >> Wait. work with. >> I'm going to pass it to Brad. Brad will start by uh identifying the staff we work closely and then he will proceed to uh present the slides. Thank you. >> Thank you, Claire. As Clare mentioned, I will be presenting the transit facilities maintenance audit report. But before that, um, a couple thank yous here. I want to thank Ryan Booth, the director transit operations and maintenance, Siraj Brahheimi, the senior manager transit maintenance, and David Perini, the supervisor of facility maintenance. We thank them for their ongoing cooperation and support throughout the audit process. Uh, next slide please. In terms of the agenda, it will very closely monitor the the FOM presentation. So, I will speak to the six audit findings and then uh Ryan Booth will address each of the six management action plans. Next slide, please. This audit assessed the effectiveness of transit facilities maintenance operations and evaluated whether facility inspections and preventative maintenance activities are appropriately planned, executed, and monitored. Demand maintenance processes, including service requests and work orders, are effectively managed and controlled. Vendor activities and contracted maintenance services are adequately monitored and comply with contractual and regulatory requirements and supporting administrative controls including procurement, work documentation, shelter cleaning tracking and invoice review are sufficiently designed to support accountability, operational oversight and payment accuracy. Next slide, please. Our audit scope covered transit facilities maintenance activities from January 1st, 2023 to December 31st, 2025. The audit methodology included reviewing policies, procedures, contracts, and agreements related to transit facilities maintenance and vendor management, interviewing transit facilities maintenance staff, conducting walkthroughs at the Clark and Santawood facilities, transit terminals, and shelters, and performing sample testing and data analysis on service requests, work orders, preventative maintenance, inspection records, and invoices. Next slide, please. Audit finding a procurement controls or vendor performed transit maintenance need improvement. Vendor performed transit facility maintenance was not consistently managed through appropriate procurement channels resulting in spending that exceeded procurement thresholds, work being completed outside established purchase orders, and a lack of clear distinction between preventative and demand maintenance activities. The following key issues were found. First, 12 vendors exceeded the $25,000 purchasing bylaw threshold without purchase orders or formal procurement approval with total spending of 1.067 million. Second, demand maintenance was procured from vendors without purchase orders. Two HVAC vendors without POS accounted for 75 transactions totaling 183,000 compared with 70 transactions totaling 126,000 for the contracted PO vendor. And third, preventative and demand maintenance were not clearly separated. The preventative maintenance vendor completed over 100,000 in demand maintenance work, including 31,000 that appeared to exceed the intended minor repair scope outlined in the vendor contract. These gaps reduce transparency and oversight over vendor spend and affect transit's ability to demonstrate compliance, appropriate contract use, and best value. It should be noted that internal audit did not identify evidence of fraud or personal benefit. This finding relates to procurement control design, documentation, and identifying gaps. We recommend that transit in consultation with purchasing should ensure procurement activities comply with the city's purchasing bylaw requirements. Define when quotationbased sourcing may be used for demand maintenance. Establish controls for repairs identified through preventative maintenance and implement periodic spend monitoring to identify vendors approaching or exceeding procurement thresholds, any non-purchase order activity, costs not charged to existing purchase orders, and quotation exceptions. Next slide, please. Audit finding B. Preventative maintenance tracking and oversight require strengthening. The following key issues were found. First, preventative maintenance activities in certain areas are not formally tracked. Second, preventative maintenance inspections for fuel pumps, generators, and backflow preventtors were not consistently completed as required. And third, HVAC preventative maintenance at the Clark facil facility was below contract contracted inspection frequencies and hours. These gaps increase the risk of mismaintenance, equipment failure, service disruption, and potential non-compliance. We recommend that that transit strengthen preventative maintenance oversight by confirming applicable requirements, reviewing vendor reports, tracking missed or incomplete preventative maintenance activities to resolution, and escalating outstanding items as required. Next slide, please. Audit funding C. In-house facility inspections require standardized checklists, documentation, and tracking. The following key issues were found. First, facility inspections are primarily recorded manually using paper checklists. Second, existing inspection checklists do not fully align with the fire safety plan requirements. And third, inspection records were not maintained for transit terminals. Inconsistent inspection practices reduce oversight, limit monitoring of completed inspections, and increase the risk of missed inspections and regulatory non-compliance. We recommend that transit strengthen inspection controls by using city works to schedule and track inspections, standardizing checklists to align with applicable requirements, maintaining inspection records for all transit facilities, and implementing supervisory review of overdue or incomplete inspections. Next slide, please. Audit finding D. CityWorks configuration and utilization require strengthening. The following key issues were found. First, work orders are generally linked to facilities rather than specific assets. 90% of work orders were closed by frontline staff resulting in reduced supervisory oversight. Third, service requests are not always converted to work orders as required. And fourth, outstanding building condition assessment items are tracked manually outside of CityWorks. These gaps reduce visibility over recurring issues, outstanding repairs, staff workload planning, and maintenance performance. We recommend that transit work with it to strengthen cityworks configuration and use by linking work orders to specific assets, defining work order creation and closure requirements, restricting closure authority where appropriate, and tracking outstanding condition assessment items within city works. Next, next slide, please. Audit finding E. Shelter cleaning tracking and monitoring require strengthening. The following key issues were found. Not all active shelters were included in the shelter cleaning tracking sheet used to monitor cleaning activities. Second, some cleaning records did not include key information such as shelter interactive voice response number and service type. And third, service frequency expectations were not consistently defined across procedures and operational guidance. These gaps reduce management oversight and increase the risk of missed or delayed shelter cleaning activities. We recommend that transit strengthen shelter cleaning, tracking, and monitoring by confirming all active shelters are included in the tracking sheets, incorporating key fields such as service type, aligning procedures with defined service frequencies, and monitoring exceptions to resolution. Next slide, please. Audit finding F. Invoice review and approval controls require strengthening. Vendor invoice review and approval controls did not consistently prevent or detect duplicate approvals and payments. Internal audit performed a data analytics review of all 13,53 invoices in the audit period to identify potential duplicate payments and selected 55 invoices which were flagged as potential duplicates for further review. The result of the review was was the following. 10 duplicate invoice approvals were identified. Seven of these were detected by accounts payable before payment was processed and three duplicate payments totaling $4,422 were not detected and were paid twice. These 10 invoices were scanned into the system twice due to an error in the automated AP scanning process which incorrectly captured the invoice number. One additional duplicate payment for 2,110 was made for the same work under different in invoice numbers resulting in overpayment. Five invoices were paid through both check requisition and PC card. Three of these invoices were subsequently detected by accounts payable staff. However, two invoices totaling $75 were not detected and were paid twice. Two other invoices for $391 were paid through PCARD using the exact same invoice to support the PCR payment. After we communicated these issues to transit, they started working with accounts payable, which is currently in the process of recovering all the duplicate payments identified above. We recommend that Transit strengthen invoice review controls by requiring approvers to verifi verify that invoice data captured by the automated accounts payable system matches the original invoice image. Periodically reviewing detailed payment transactions for duplicate indicators and working with accounts payable to recover duplicate payments. Next slide, please. Overall, transit facilities maintenance has basic controls in place for managing maintenance operations across transit facilities and shelters. Maintenance activities are actively supervised. Service requests are managed through city works. External contractors support preventative maintenance for specialized assets. Shelter cleaning activities are monitored through an estab established tracking process and standard operating procedures are in place for key activities. This baseline structure of processes and controls forms forms the basis of our assessment that the control environment is generally adequate. However, this audit also identified several key areas where control should be strengthened, most notably in the area of procurement where vendor performed maintenance was not consistently managed or monitored. The audit also highlighted opportunities to strengthen other key processes, including strengthening preventative maintenance tracking, standardizing in-house facility inspections, enhancing CityWorks configuration and utilization, improving shelter cleaning monitoring, and strengthening invoice review and duplicate payment controls. Implementing the recommendations will strengthen the control framework, improve operational consistency, enhance internal controls, and increase the compliance, oversight, and accountability of maintenance operations. Now, with that, I will uh turn it over to Ryan Booth, the director transit operations and maintenance, and he will um address each of these six findings. through the chair. Good morning, members of council and audit committee members. I'll be presenting the management action plan for the transit facilities department today. Uh first off, I'd like to thank the audit team and for all their guidance and collaboration over the last several months. We've appreciated your support and insights and they've been an excellent team to work with. I'm turning to the presentation and action item number one. Transit will reinforce procurement compliance through training to all facility staff and add clear documentation for all purchasing activities. Transit facilities will work with FOM and purchasing to review reoccurring PM demand maintenance costs and determine the appropriate procurement approach including authorization use and extent of required quotations. Transit will align with FOM and clear clearly define minor versus major work to ensure vendors are used efficiently and appropriately. and transit will proactively monitor vendor spending on a quarterly basis to identify gaps and ensure contracts are in place where required. Next slide. The improving preventative maintenance oversight. The regulatory and contractual maintenance requirements for each asset will be formally documented and used as a guide to monitor PM maintenance activities across all transit facilities. Transit will work with FOM to strengthen vendor performance tracking and centralized documentation for better oversight. Transit will use city works to monitor and track all PM maintenance completion gaps and compliance in real time. And transit will work with FOM to clear uh implement clear escalation process to address any missed or incomplete vendor maintenance activities. Next slide. um standardizing central digital facility inspections. Um transit will introduce standardized electronic inspection checklists to be housed within city works to ensure consistent evaluations across all transit facilities. And transit will enhance supervisory oversight to ensure inspections are completed and signed off on a daily basis. Next slide. In terms of enhancing city works utilization and work order controls, transit will work with IT to enable asset level tracking to better link maintenance activities and repair work orders to specific assets. We'll also work with IT to implement supervisory approval for work order closure to strengthen accountability and direct oversight. For five, improve city works usage. Transit Transit will standardize work order processes for all transit and staff and provide specific training to the facilities team to ensure consistent usage across all the transit facilities. We'll track all outstanding operational condition assessments items in CityWorks through to completion. Next slide. Strengthening our shelter cleaning and monitoring. Transit will maintain an accurate, up-to-date shelter inventory in real time and reconcile quarterly against our cleaning logs to ensure all assets are properly captured when added or removed from service. Transit will enhance data capture within our cleaning tracker to improve accuracy and transparency of shelter cleaning activities. And Transit will update our shelter cleaning SOP to better reflect our service standards and cleaning schedules. Next slide. Enhancing our invoice review and payment controls. Transit will implement clear procedures in an SOP for all staff to follow to ensure invoices are accurate, verified, and compliant before approvals and the supporting documentation attached matches what was scanned into the system. Transit will conduct quarterly reviews to identify and prevent duplicate invoice payments and will work closely with accounts payable to recover any duplicate payments in quick manner. Thank you. >> Okay. Thank you, Ryan. As as you just heard the next slide, please. Um, as you just heard, the action plans have been developed. The implementation has begun for certain actions with remaining actions scheduled through approved timelines. An internal audit will follow up and report on the status of these action plans as they become due. Thank you. That concludes our presentation. And now we will open it up to questions. >> Thank you. We have councelor Plesi. >> Thank you, Mr. chair. Um I I think uh my general questions will relate to uh the other report um that have been answered. Uh but in terms of um the reasoning behind me wanting to go in camera and ask those questions, I think they'll relate to this uh report as well because of the similarities. Um, so I I'd like to add this to one of the INC camera items. The in camera item. So sorry, I thought we were going to get through the next report, but we uh are not. Um, so that one being stood down, this one as well, and we have one more. >> So um, >> same reason. Yes. >> Thank you. Um so on the the council question to your point the 6.3 would be our next item. However, I do have a request to go in camera for 6.3 as well through councelor tour um for identifiable individual which will be added to this. So um I think I'm going to I'd like to speak to this one or would you like to just end everything down go in camera do that and then come back? >> I think your public questions and comments would take precedent over going in camera Mr. Chair. >> Okay. Thank you. Um so if I don't see any other questions, I'm I'm going to ask some. So um the obviously the similarities as councelor Plesi touched on goes across everything that we're doing when it becomes maintenance, demand, maintenance, so on and so forth. And we're seeing it and and I appreciate the um Commissioner Bill Boy being here because obviously in charge of rec centers, I'm sure if we went and did an audit in there, we would see a lot of the similarities that we're seeing across these audits as well. um and why I think it it'll be a balanced approach that we'll try to take here today to fix all of these uh these issues. Um I do want to touch on a couple of findings in this one in particular. So if we can go to slide F. Finding F, sorry, excuse me. Finding F. No, it was the one that showed um overp payments, duplicate payments. I should have wrote the page number down. Sorry. Yeah, this one. Um so I I I do have a couple questions here. So, um this one this one sat out with me, which was the same work built under different invoice numbers. So, I wouldn't mind an explanation on this. Is is and is this um that the customer sent in two invoices for the same work but did a different invoice number for them >> uh through the chair. Um just to confirm, are you you're referring to the >> same uh key issues, same work built under different invoice numbers. >> Okay. So this uh what happened in this situation was there was it was essentially uh two invoices. One was ended with with 91, one ended with 93. The invoices they I believe they were sent within a day or two of each other. And uh so different invoice numbers but all these invoices contain a work order that has a description of the work performed and the the work order was the exa exactly the same. So the exact same work on the exact same day sent. So it would have been it was it was the the vendors kind of double billing billing us twice for the same work. >> Did we have an explanation from them as to why they did it? >> I I don't know. I don't know about that. >> Yeah, that's that's still in progress. We're working on that one with accounts payable and the particular vendor. >> Okay. Um, and based on this, was this a snapshot of items that you've looked at and you found this particular issue and there could be more or we went through everything and this is the only one that we're currently seeing? >> We we went through everything and we we did an analysis. We did a pivot through Excel and so we we sorted it by uh, of course vendor, but also uh, amount, invoice amount, invoice date, invoice number. So the ones that were potential duplicates really kind of jump out at you because it's the same vendor, same invoice date, same amount, and in some cases very very similar invoice numbers. So the the actual analysis of the duplicate payments was was exhaust exhaustive and I would I would be surprised if there was one that we didn't c catch through through our review. >> Okay. Um the issue with the PC card, one invoice paid twice. Was it on the same PC card? >> Yes. Um >> how far apart were the payments? >> It was it was two different PEC cards. Um you're again you're referring to the the third one here, the five five invoices paid by both Or are you referring to the the last one? >> The la um I'm reading the last one currently. One invoice for 391 for a nonPO vendor was paid twice using PCard. I'm asking if that's the same PECard that was used twice or were they different PE cards paying the same bill? >> They were different PE cards paying the same bill because it was by two two separate employees. >> Yes. >> How does how does that happen? It's it's quite possible the vendor sent the invoice to separate um our our frontline four persons uh within transit. We have put a system in place where all of our PCAR purchases and invoices are funneling through our maintenance clerks to prevent this from happening in the future. So there'll be one person reviewing and ensuring if there is any duplicates flagging it for the vendor. Uh but previously it was going to our frontline four persons who are making that payment. So, and and and how are we going to be solving that in the future? >> Yes, directing all of the invoices through our maintenance clerk, but also doing our our quarterly GL reviews. We'll capture that right away and flag it to bring it back to the vendor for reimbursement. But we hope to catch it before it even gets to that that point. >> Okay. a lot of double painting coming out of um what we're seeing here in this audit which is not too comforting. Um I do have a a motion based on actually I'm going to ask some other questions. Uh I I seen in um in in here that some of the stuff that we're paying for um in in rentals uh be it um portaotties um meeting rooms so on and so forth. And my explanation that I received was some of it came through COVID and has now been kind of made permanent. Um can I get a a uh is this something that's going to continue um as far as rentals go? Yeah, that's something we'll work closely with purchasing uh on some of them you're to your point were short-term uh rentals throughout COVID or other situations where we're at capacity at certain terminals. So, there are short-term measures to put in to fix an issue from an operational standpoint, but they turn into long-term solutions. So, we need to work with purchasing, how we put a contract in place to cover those types of purchases. >> Okay. And there's another one I noticed on snow removal for um um front end loader to clear snow. My question is why are we renting that and why is it not part of the snow removal contract whether be it through um the city and or I believe transit does their own for shelters. I could be wrong. Um but why is that not being captured in the contract and why are we paying for it outside of that PO? >> So that's um something we'll be adding into our next contract for loader rentals working with with uh fleet uh and their contract. We piggyback off of it. Um, at the time we didn't need the additional vehicle for our gateway terminal. Um, but with the amount of snow we received over the last year, we needed to rent an additional vehicle to remove the snow from that facility um, and help maintain throughout the winter months. >> Okay. And this is the contract you're saying adding to your next contract. And is that contract separate than the seven-year contract we just engaged in for snow removal from the city of Bmpton, or is it aligned with the timing of that same thing? Anybody? >> Peter, do you does your team handle the snow removal for transit >> uh through the chair? It's uh embedded in the contract. However, they don't oversee the actual operations or or the payments. >> Okay. So, this would fall into that seven-year contract that we're now currently one year into. >> Correct. It's a uh eight-year contract with two optioners. >> Okay. Um so my only comment to that is looking at adding it on to the next contract. We're looking at 8 to 10 years down the road. We need a solution that's not going to be 8 to 10 years down the road. Um so I would I'm going to ask that uh Peter or Heidi look at what that is to make sure it's not a a a rental that we're paying for. Um it should definitely be put into this contract in some way, shape, or form. Um, those are all the questions I currently have. Um, I see councelor Plushie came back on. Um, so I'm happy to I have do have a motion that I will present once we bring once we come back. Uh, councelor Plushie. >> Thank you, Mr. Chair, and I'm I'm glad you uh you asked some of those questions. Um, for sure they took priority in going uh rather than going into uh into in camera. So, um, but just with respect, and I think it's outside of the audit, um, and it might not be a fair question to ask, but based off of what Peter's, um, had just explained about the contract, the operations of the contract being held within transit, correct? And, uh, but it all tied to the RFP of our overall city um, snow uh, removal. Is there not some uh um you know some efficiencies that can be had if it's if it's under us if it's under us it's all under us under public works Peter um uh the chair council pushes we can review that and and see if there's any um you know benefits or optimization that could be achieved through um uh you know having sort of one one point of management >> and I guess just to clarif Would it would it be possibly there's a number of throughout the organization uh departments that do the same thing same same thing technically but different within their uh department and there's probably a certainly a place for that um whether it be maybe communications maybe uh sponsorships or or or something. Is there maybe potentially a future audit that can look into all of those or is it just coming from department you would highlight that they do this work which is also in another area like what was mentioned here today >> uh through the chair to councelor PLI if you request us to look into the other unit city unit that uh that also conduct facility maintenance I can give you those are fire, recreation, parks, culture, very little probably within culture. Those are all the stuff and recreation actually has a hu uh fairly large portfolio in terms of how much facilities they manage on behalf of the city >> and we can entertain that. We just have to move some of the audit we already scheduled to the future. If that's what the committee wishes us to do, >> um that's maybe a further discussion. Uh I don't want to because I don't know what's coming. So I don't want to push anything yet. So but maybe something that uh we can discuss at council when this comes back because I think it's all it's important for um for members of council to to provide their input in that as well. So >> future discussion. Thank you. Claire. Thank you Mr. Chair. >> Thank you. Thank you. And and to that clear, I might just ask um that you report back to uh committee um just on the potential of putting that in and what may need to be moved in order to do so. >> That'd be good. >> Bring me sort of the chair. >> Thank you. Okay. So, we are going to uh moving camera. So, I have a motion moved by councelor Plesi to open the agenda for the purpose of adding a close session item and to move the close session and to move into close session to deal with the following items uh on the screen. 11.1 close discussion regarding 6.1 Public Works and Engineering Facilities Maintenance Audit 2026 pursuant to municipal act 2001 as amended section 239-2E uh litigation or potential litigation including matters before administrative tribunals affecting the municipality or board 11.2 closed discussion item uh regarding 6.2 2. A staff report for transit facility maintenance audit 2026 pursuant to the Municipal Act 2001 as amended through section 2392E uh litigation or potential litigation including matters before administrative tribunals affecting the municipality or local board. and 11.3 a closed discussion regarding item 6.3 staff report cor uh corporate ethics uh ethics hotline quarterly report Q22026 pursuant to m municipal act 2001 as amended under section 2392B personal matters about an identifi individual an an identifiable individual including municipal or local board employees all those in favor that motion carries madam cler How long do you need 10 minutes? So, we will meet in camera at 11:30. Dirty. comes from today's close session business as a result of our close session today which by which report the following that all items were considered and direction was given. Now we will return uh to 6.1. So 6.1 um I do have a couple motions here uh on this that I would like to bring forward if uh madam cler if you can display the citywide facility maintenance centralization review. Um and I will read it out. So this is in this is in in relation to um the study that was done by Blackline Consulting um to accelerate um appropriate citywide facility maintenance operating model. Um so that the chief administrative officer be requested to report back on the implementation status of the facilities management recommendation arising from 2019 community service uh services service efficiency study prepared by Blackline Consulting and identifying actions required to acceler accelerate implementation of an appropriate citywide facility maintenance operating model and that the review addressed the consultant's recommendation to centralize facility management by determining which facility maintenance activity should be managed corporately and which activity should remain within the operating departments because of their specialized or program specific. And the review did the review include uh at a minimum centralizing contract management and common facility maintenance services across city buildings. Conducting a citywide spend analysis to identify contracts uh uh covered overlapping services. Gaps in service coverage service procured outside established contracts. Opportunities to consolidate vendors. opportunities for volume discounts on whether they approve contractor or list uh operational needs. Establishing uh consistent maintenance standards and service levels for city facilities. Establish service agreements that clear that clarify responsibilities between the centralized facility maintenance function and the operating departments using the facilities. Improving the consistent the consistency of financial coding cost center structures and expediting and expedure of reporting to allow maintenance cost to be monitored by facility service type and vendor. Identify staffing technology governance and imple implementation requirements and establishing the implementation plan where defined milestones and timelines and that the chief administrator officer report back the proposed implementation plan to the February 2027 audit committee meeting. All those in favor that carries. Um so the next motion is around a um template uh citywide template to be used when um approving of um invoices. Uh this will I feel this will help us to make sure that everything is in line and balanced and if if uh this is not filled out and accompanied by an invoice that it won't be paid. So the motion is that the director of purchasing is the director purchasing in consultation with the treasurer and effect operating departments be requested to develop and implement a standardized city invoice template for all vendors providing facility maintenances and services. and uh the completion and submission of the standardized city uh invoice template be established as a mandatory condition of payment for facility maintenance services and that each vendor be required to submit and complete standardized city invoice template and all required supporting documentation and that the standardized city uh invoice template required as a minimum the vendor's name and invoice number the the applicable contract request for proposal or quotation reference the applicable purch purchase order number and confirmation that the invoice work is being charged against the appro the approved purchase order. Where no purchase order applies, the document procurement exception or other other approved authorized supporting expenditure. The applicable work under uh work order number, service location and service date. A description of the work being performed. An itemized breakdown of labor charges, including employee classification, hours uh worked, build rate, and corresponding rate established through the applicable contract, request for proposal or approved quotation. An itemized breakdown of material and parts including description, quantity, unit cost, applicable contract rate, and any permitted markup and any and all other information required by the city to verify the invoice amount is accurate, appropriately authorized and consistent with the applicable procurement arrangement and that invoices not accompanied by a full completed standardized city invoice template. the vendor's in with the in um the vendor's invoice that all required supporting documentation not be approved or processed for payment until the missing information has been provided and verified and that the standardized city invoice template um as related submitted requirements be incorporated into future procurement documents, contracts, purchase orders and vendor communication and it implemented for existing facility maintenance vendors through the appropriate transition plan and that the director purchasing report back to the September 2020 20 September 21st, 2026 audit committee meeting on a standardized on a standardized city invoice template and the implement implementation timeline and any required system or process changes. So that is the motion. All those in favor motion carries. >> Yeah, that's that is for 6.1. So I have a motion moved by councelor Plesi that the report from the director of internal audit to the audit committee meeting of June 9, 2026 regarding public works and engineering facilities maintenance audit 2026 be received and that the recommendations contained in appendix one public public works and engineering facility maintenance audit 2026 be approved. All those in favor? That motion carries. Um 6.2. Uh I have a quick motion here on 6.2. Um for the review of transit facilities maintenance and expenditures. We discussed this briefly, but I just want to put it a little bit more formal. That the general manager of the Bmpton Transit be requested to review reoccurring facility maintenance expenditures identified through the transit facility maintenance audit to determine whether the services remain operational, necessary, appropriately scoped, and cost effective. that the re uh that the review include portable toilet rentals and other reoccurring goods and services. uh where the nature, frequency, duration or cumulative cost warrants further assessment and that the review considers whether services should be discontinued, reduced, consolidated, delivered through alternative operational approach or procured through a more appropriate contractual agreement and that the general manager of Brmpton transit report back to the September 21st, 2026 audit committee meeting on the results of the review and the corrective actions taken um taken or proposed. All those in favor? That motion carries. Um, and then I'll have to receive that as well. Is that on the screen? >> Yes. >> Here we go. >> Yep. So I have a motion moved by member Russell that the report from the director of internal audit to the committee meeting of June 9th, 2026 regarding transit facility maintenance audit report 2026 be received and the recommendations contained in appendix one transit facility maintenance audit 2026 be approved. All those in favor that motion carries. That'll bring us to 6.3. Um so we have a motion by uh councelor Tour to receive the report. All those in favor? That motion carries? 7.1 was dealt with. Uh other business, there's no other business. Member question period. Do any members have any further questions uh regarding today's agenda? Seeing none, public question period. Members of the public are invited to come to the podium, ask any questions about any recommendations made by committee today. Is there anyone here or online? Seeing none, that brings us to adjournment. Our next meeting is scheduled for Monday, September 21st, 2026 at 9:30 a.m. I have a motion moved by Councelor Bar to adjourn today's meeting. All those in favor? That motion carries. Thank you, everybody.