City Council Audit Committee Meeting Abstract

Summary

The Audit Committee grappled with escalating oversight costs and accountability gaps. Audit fees have ballooned 55% above contracted amounts due to new accounting standards, prompting demands for better transparency. More significantly, councillors raised concerns about management controlling audit scopes rather than council, with plans to establish an Auditor General position. The committee also debated whether expensive "hub" housing models justify costs three times higher than traditional shelter beds, while audit findings revealed the city has no systematic way to verify if economic development incentives actually deliver promised benefits to taxpayers.

Topics Discussed

1. AUDIT FEE CRISIS: External audit costs have increased 55% beyond the base contract ($109,000-$120,000 annually), with additional charges of $154,000 (2022), $44,000 (2023), and $65,000 (2024). KPMG attributed overruns to multiple new accounting standards implemented since the 2022 contract negotiation. Councilor Stevenson successfully amended the audit planning report to require annual briefing notes comparing projected versus actual audit fees, stating "I think it's needed for accountability and transparency."

2. AUDITOR GENERAL PROPOSAL: Councilor Stevenson announced plans to bring forward a motion to establish an Auditor General position for the City of London, citing concerns that audit scopes are being set with management rather than council. She stated: "when the scoping is done with management, it just concerns me" and described the lack of an Auditor General as "a big gap" in governance. This would fundamentally change how city operations are monitored and held accountable.

3. COMMUNITY IMPROVEMENT PLAN FAILURES: The audit of Community Improvement Plans revealed "no systematic process to monitor project level outcomes after incentives are issued." With only 3.5 full-time staff managing over 30 financial incentive programs, the city cannot verify whether taxpayer-funded economic development incentives achieve intended benefits. The Industrial Land CIP has no funding cap or financial forecasting process, and there's no documented framework linking CIP goals to specific programs—raising concerns about accountability for past investments like the Core Area Action Plan.

4. HUB HOUSING COST CONTROVERSY: Councilor questioning revealed hub beds cost $11,000 per month ($362/night) compared to traditional shelter beds at $2,000-$4,000 per month—a 3-4x increase. The Youth Opportunities Unlimited hub contract costs $2+ million annually for the same 18 beds that previously cost $600,000-$700,000. The councillor emphasized: "at a time when there's limited funding...we could serve three times as many people" with traditional shelter beds, but the supplemental audit report provided budget details rather than outcome metrics needed to justify the cost differential.

5. AUDIT TRACKING DISPUTE: A contentious debate emerged over closing audit recommendations before work is complete. Councilor Stevenson objected to marking housing audit items as "closed" when the critical tenant transition plan won't be delivered until December 2026. She successfully moved to keep London Housing Development Projects and Homelessness audits (both rated "high risk") on the tracking report as "on track" rather than "closed," ensuring the incoming council remains aware of these significant public concerns.

Motions

Passed: - Election of Councilor Stevenson as Vice Chair (term ending November 15, 2026) - unanimous - Request for Proposals for Internal Audit Services (Recommendations A through E) - unanimous - 2025 Audit Planning Report with amendment requiring annual fee reporting comparing projected vs. actual costs - London Downtown Closed Circuit Television Program review received - Internal Audit 2026-2027 Planning Report received - Audit Follow-up Dashboard received with amendment changing status of housing audit items from "closed" to "on track to completion" until tenant transition plan is presented (anticipated December 2026) - Community Improvement Plans Audit Report received - Housing and Homelessness Value for Money Audit Supplemental Report received

Rejected: - None explicitly rejected

Deferred: - Additional meeting scheduled for May to discuss Item 4.1 (RFP for Internal Audit Services)

Attendees

Present: - Councilor Stevenson (in chambers, elected Vice Chair) - Councilor Pribble (in chambers) - Councilor Chima (attending online)

Absent: - Councilor Cuddi (absent due to illness)