The survey results and information captured in this report will inform Members of Audit and Risk Committee of the fraud risks and fraud allegations at the Region of Peel in order to address the requirements of the External Audit. The External Auditors are required to gather feedback from Members of Audit and Risk Committee as part of the professional standards prescribed by the Canadian Institute of Chartered Accountants.
Michelle Morris, Director, Internal Audit Approved for Submission:
for D. Szwarc, Chief Administrative Officer
For further information regarding this report, please contact Michelle Morris extension 4247. Authored By: Joan Appleton, CPA, CGA, CIA, CRMA
Meeting Date: 2015-04-02
Audit and Risk Committee
For Information
DATE: February 27, 2015
REPORT TITLE: AFFORDABLE HOUSING AUDIT FROM: Michelle Morris, Director, Internal Audit
OBJECTIVE
To inform Audit and Risk Committee of the results of the Affordable Housing Audit. REPORT HIGHLIGHTS
• Controls are effective related to planning and construction management of new builds and providing the right technical expertise for maintenance of existing housing stock.
• There are opportunities for improvement in defining the roles and responsibilities for construction project management in the affordable housing build process.
• Documentation of processes will increase efficiency for the Service System Manager in the contract management of affordable housing.
• A comprehensive risk assessment will assist to mitigate risks related to building affordable housing using alternative business and partnership models.
DISCUSSION 1. Background
The 2013 Internal Audit Risk Based Work Plan included an audit of Affordable Housing. The Region of Peel, as Service System Manager for Affordable Housing, has responsibilities that include:
• System funding, planning and management of housing on a continuum from homeless, homelessness prevention, rent subsidies and home ownership;
• Co-ordination of intake and assessment and a centralized waiting list for applicants requesting subsidized social housing;
• Co-ordination of the Rent Supplement Program and housing allowances; and,
• New build planning and construction, as federal and provincial funding becomes available.
The Housing Service System Manager is responsible for Term of Council Priority #7: Increase supply of appropriate housing options (ToCP). New partnerships with the
As a result of the risk assessment of the various responsibilities of the Housing Service System Manager, it was determined that the audit would focus on the planning and building processes of new affordable housing and the Region of Peel’s role in oversight of the maintenance of the system’s housing stock. The objective of this audit was to assess the effectiveness of the Affordable Housing processes for capital planning and building, management and maintenance to help mitigate the risks related to:
• Providing affordable housing to meet increasing demand;
• Maintaining the fiscal sustainability of the affordable housing stock;
• Involving the right stakeholders at the right time; and,
• Maintaining current inventory of housing in a state of good repair. The scope of the audit assessed the effectiveness of:
• staff roles and responsibilities in executing the processes; and,
• liaison with internal business partners to exchange appropriate and timely information.
The scope of the audit excluded Peel Housing Corporation.
This audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing
3. Audit Observations
Internal Audit observed that Affordable Housing processes to engage with the necessary stakeholders consistent with the new focus to partner and build with external parties, are effective. Regional partners such as the Human Services Financial Services Unit, Legal, Real Property Asset Management and Integrated Business Support are working towards ensuring the new building process is successful. There are opportunities to increase the effectiveness of stakeholder involvement in alternative business and partnership models. As related to the Region’s role in the oversight of maintenance requirements for the housing provider capital assets, the audit showed that Affordable Housing has effective controls in place to bring the right technical expertise and information to the providers for their consideration in maintaining a state of good repair. There are opportunities to bring about increased effectiveness and efficiencies through documented processes and procedures. Three specific areas for improvement are:
Evolving Business Process
Management committed to ensuring that a comprehensive risk assessment of the new partnership models for the development of affordable housing options with external stakeholders is completed. Work has commenced as a result of the Affordable Housing Development review.
Roles and Responsibilities
The operational level roles and responsibilities related to construction project management are not clear in the affordable housing planning and build process. Uncertainty over roles and responsibilities may result in missed opportunities for professional input in key decisions and may impact outcomes. There is a need to establish and document roles and responsibilities, including establishing the appropriate timing of input and degree of authority to ensure project build requirements are met efficiently and effectively.
The enterprise real property transformation project will help define the roles and responsibilities for real property consistent with the Executive Leadership Team’s approved service delivery model and this will include responsibilities related to construction contract management. The Project Sponsor will ensure the project addresses this finding.
Policies and Procedures
Human Services is responsible for administration of the 48 social housing providers which involves contract management responsibility. Tasks such as the Operational Reviews of housing providers are comprehensive and require input from multiple areas within the Human Services Department. Presently, Integrated Business Support, within Human Services, has documented processes supporting the review of housing provider finances, but the Housing Program Specialists and the Technical Advisors do not have established procedures. Without this, there may be a risk that the work completed will not be done efficiently or consistently. Additionally, documented policies and procedures can be used as a training tool for new staff.
Development of the procedures is underway and management will ensure they are communicated to staff.
CONCLUSION
Management has developed action plans to address the audit observations noted. Internal Audit has reviewed these plans and is satisfied that the actions planned will address the risks identified. Internal Audit will follow-up on the status of the management action plans related to this audit and will report the status to the Audit and Risk Committee.
Michelle Morris, Director, Internal Audit Approved for Submission:
for D. Szwarc, Chief Administrative Officer
For further information regarding this report, please contact Michelle Morris, x4247. Authored By: Jennifer Weinman, CPA, CA, CIA and Barb Morris, CIA, CPA, CMA, CFE