Corporate Audit Plan
The purpose of internal auditing is to provide independent assurance and consulting services. This improves Niagara Region's operations and brings a disciplined approach to the evaluation of:
- Risk management activities
- Internal controls
- Governance processes
The Internal Controls and Organizational Performance division has a professional obligation to develop a comprehensive risk-based annual audit plan. This is consistent with recommendations by professional associations, including the Institute of Internal Auditors and the Chartered Professional Accountants of Canada.
The 2019 Internal Audit Plan was developed based on the following sources:
- Consultation meetings with members of the Audit Committee
- Consultation meetings with members of the Corporate Leadership Team
- A comprehensive risk assessment of processes, programs and functions across the organization
- A jurisdictional scan of hot topics, emerging risks and auditable areas in other local comparable organizations
Internal Audit Projects
The following projects have been approved by Regional Council as the 2019 Internal Audit Plan.
Employee Benefits Claims
Scope: To evaluate the internal controls around health, dental and other extended benefits provided to Niagara Region employees and to ensure that financial transactions are being remitted and recorded according to Human Resources policies and procedures. Fraud prevention and detection controls will be evaluated and the contractual agreement with the service provider will also be reviewed.
Rationale: Recent high profile and publically reported frauds detected in other comparable organizations.
Risks: Inaccurate processing of employee health, dental or other extended medical benefits resulting in overpayments by Niagara Region. Fraudulent behaviour or usage of employee benefits may erode public trust resulting in a loss of the corporation's reputation.
Procurement: Sole / Single Sourced
Scope: This audit will evaluate the process specifically for single and sole-sourced procurements. The scope will include a review of the rationale, requirement and approvals around single and sole-sourced procurements. Internal Controls and Organizational Performance will scrutinize the veracity of emergency transactions, purchases made for compatibility with existing products / equipment, trials, purchases for unique / customized specifications and other exceptions permitted in the Procurement By-law.
Rationale: This audit will have a targeted focus on single / sole-sourced procurements which tend to generate a higher degree of public interest, particularly in the public sector. High volume of transactions and materially significant (approximately 550 purchase orders / $44 million in 2017 and 530 purchase orders / $24 million in 2018).
Risks: Non-compliance to procurement policies, procedures and by-law, or uncompetitive behaviour may lead to financial or legal implications. In addition, a loss of community trust may occur if the procurement process is perceived to be uncompetitive.
Human Resources Onboarding and Offboarding Audit
Scope: A review of the Human Resources operational and Information Technology procedures associated with onboarding, such as recruiting, accuracy of job data, training, and offboarding, such as termination, resignation, and retirement of Niagara Region employees to improve the efficiency and effectiveness of the corporations processes and procedures. The audit will include a review of final payroll transactions, such as severance, information technology user permissions, such as access to confidential medical records, and competitiveness of recruiting process.
Rationale: Staff direction from Audit Committee on October 31, 2017 after discussing the 2018 Audit Plan (AC-C 6-2017). Employee hiring practices were noted during interviews and within Burgoyne Bridge Audit.
Risks: Non-compliance to Human Resources or Information Technology processes or procedures may result in financial, legal or privacy implications. Control gaps may also lead to operational inefficiencies, employee morale or labour relations issues and loss of public trust.
Driver Certification Program Audit
Scope: Using the standard Driver Certification Program audit plan, assess compliance to Ontario Ministry of Transportation's regulatory requirements for commercial fleet operators, specifically for 'signing authorities' approved by the Ministry of Transportation to deliver driver training and testing.
Rationale: This is a standard audit performed by multiple Ontario municipal audit teams. Performing the audit in-house will result in cost savings for the Public Works department compared to outsourcing.
Risks: Meeting or exceeding the Ministry of Transportation's regulatory requirements are mandatory to continue participating in the Driver Certification Program. Continued participation in the program has numerous benefits including higher staff engagement and lower driver training and testing costs.
Waste Management Contract Compliance Audit
Scope: To independently evaluate the performance and compliance of Waste Management's contractor against its contractual obligations. The audit will also examine staff's efficacy at managing their service provider, such as performance measures, enforcement protocols, dispute resolution and contingency plans.
Rationale: Waste Management's contractor is Niagara Region's largest vendor at $21 million in annual spent -- 8 percent of all purchase orders. High pubic attention, complex operational requirements, and high financial impact.
Risks: Insufficient service levels by the contractor may directly impact Niagara residents. Financial, legal and reputational risks may also occur if compliance to the service agreement is not maintained.
Homelessness Service Providers Contract Compliance Audit
Scope: To evaluate the compliance of homelessness service providers against their existing contractual obligations, and the efficacy of staff from the Homelessness and Community Engagement division to manage their service providers. The ultimate objective of the audit is to strengthen the terms and conditions of future contracts in the next request for proposal planned for 2020.
Rationale: Independent and objective audit was requested by the Community Services department to enhance accountability amongst industry service providers.
Risks: Homelessness service providers are under contract with Niagara Region to care for vulnerable sectors of Niagara's population. A high degree of public attention and trust is placed on these service providers to provide quality care within Niagara Region's standards. Non-compliance to Niagara Region's standards of care may result in insufficient care for vulnerable people, a loss of public trust (reputational risk) and / or inefficient usage of Community Services' budget.
Long-term Care Homes Risk Assessment
Scope: Internal Controls and Organizational Performance will assist Senior Services staff perform their annual risk assessment requirements for the Ministry of Health and Long-Term Care. Internal Controls and Organizational Performance will apply an independent lens to determine if current practices adequately identify risks and opportunities, and that there are appropriate action plans to manage and mitigate these risks.
Rationale: Through a comprehensive risk assessment, this was identified as one of the top risks in the organization. Specifically, a high complexity of operations, high degree of regulatory / statutory compliance requirements, high employee turnover, a risk event would result in a major loss of stakeholder confidence (high reputational risk), and high financial impact to annual Regional budget.
Risks: A significant injury or death to a long-term care home resident under the care of Niagara Region would be a major risk event with financial, legal, regulatory and political implications.
Water Treatment Operations Risk Assessment
Scope: A risk assessment of Water Operations, including the Quality Management System, to determine if current processes adequately identify risks and opportunities, and ensure that there are appropriate action plans to manage and mitigate these risks. Internal Controls and Organizational Performance will perform a detailed analysis of the Ministry of Environment and Climate Change inspections and the Region's responses to identify whether additional assurance is required.
Rationale: Through a comprehensive risk assessment, this was identified as one of the top risks in the organization. Specifically, a high degree of regulatory / statutory compliance requirements, a risk event would result in a major loss of stakeholder confidence (high reputational risk) and high financial impact to annual Regional budget.
Risks: A major disruption or contamination of Niagara Region's clean drinking water would have severe financial, legal, regulatory and political implications.