February 12, 2025, at 12:00 PM

1. Call to Order

1.1 Disclosures of Pecuniary Interest

That it BE NOTED that no pecuniary interests were disclosed.

1.2 Election of Vice Chair for the term ending November 30, 2025

That S. Stevenson BE APPOINTED Vice Chair for the term ending November 30, 2025.

2. Consent

None.

3. Scheduled Items

None.

4. Items for Direction

4.1 Briefing Note From Internal Audit - MNP

2025-02-13 Submission - Briefing Note

That the communication from MNP, with respect to the briefing note from the internal auditor, BE RECEIVED.

4.2 Internal Audit Follow Up Activities Dashboard - MNP

2025-02-13 Submission - Internal Audit Follow Up Activities Dashboard

That the communication from MNP, with respect to the internal audit follow up activities update dashboard, BE RECEIVED.

4.3 London Housing Development Projects - Lessons Learned Review - MNP

2025-02-13 Submission - London Housing Development Projects

That the communication dated January 29, 2025 from MNP with respect to the London Housing Development Projects - Lessons Learned Review BE RECEIVED.

4.4 Proposed Risk-Based Internal Audit Plan for Years 2025 and 2026 - MNP

2025-02-13 Submission - Proposed Risk-Based Internal Audit Plan For Years 2025 and 2026

That the communication dated February 12, 2025 from MNP with respect to the Proposed Risk-Based Internal Audit Plan for years 2025 and 2026 BE RECEIVED.

4.5 Audit Planning Report for the Year Ending December 31, 2024 - KPMG

2025-02-12 Submission - Audit Planning Report-KPMG

That the KPMG Audit Planning Report, for the year ending December 31, 2024, BE APPROVED.

4.6 London Downtown Closed-Circuit Television Program for the Year Ending December 31, 2024 - KPMG

2025-02-12 Submission - London Downtown Closed Circuit TV Program-KPMG

That the KPMG Report on Specified Auditing Procedures for the London Downtown Closed Circuit Television Program, for the year ending December 31, 2024, BE RECEIVED.

4.7 2023 Audited Board Financial Statements – Old East Village Business Improvement Area Board of Management

2025-02-12 Staff Report - 2023 Audited Board Financial Statements OEVBIA

That, on the recommendation of the Deputy City Manager, Finance Supports, the report including Appendix ‘A’, Financial Statements of the Old East Village Business Improvement Area Board of Management for the year ending December 31, 2023, BE RECEIVED for information.

5. Deferred Matters/Additional Business

None.

6. Adjournment

That the meeting BE ADJOURNED.

The meeting adjourned at 1:31 PM.

Full Transcript

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[4:34] I’ll just go up there and check the mic to fix it. Microphone test, council chambers. I hear you. Thank you. Okay, we’re gonna get started in about one more.

[19:24] Good afternoon. This is the first meeting in the audit committee. It’s now 12 o’clock. The city of London is situated in the traditional lens of the Nashback, Horoshone, Lopok, and Adwondron. We honor and respect the history, languages, and cultures of the diverse indigenous people who call this territory home. The city of London is currently home to many First Nation, Métis, and Inuit today. And as representatives of the people of the city of London, we are grateful to have the opportunity to work and live in this territory. The city of London is committed to making every effort to provide alternate formats and communication supports for meetings upon request. To make a request specific to this meeting, please contact accessibility@london.ca or 519-661-2489, extension 2425.

[20:06] For everyone’s information in chambers, I’m joined by Councillor Stevenson. Councillor Cuddy will join us momentarily. Councillor Pribble is absent, and member Chima is online. So I do have a quorum of committee to commence. So I’m calling this to order, looking for disclosures to be carrying interest. Seeing none, the first, next item up is election of vice chair for the term ending November 30th, 2025.

[20:41] Councillor Stevenson, are you willing to remain? I am willing to remain. Okay, Councillor Stevenson’s willing to remain as vice chair, looking to committee online to see if there’s any other interest in vice chair. Seeing none, Councillor Stevenson moved her name. I’m happy to second it. It would be uncontested. So looking to call the question of all in favor by a show of hands. Sure.

[21:16] Thank you and congratulations. And as always, this needs to be ratified by council. Consent, we have none, schedule items, we have none. Items for direction, we have seven. So we’re just gonna go in numerical order one at a time. So there is a briefing note from the internal audit from NMNP looking to committee as it was just a briefing note if there’s any questions or comments on that. And I’ll move her in a seconder as it would just be a motion to receive. Councillor Stevenson, are you moving a motion to receive and then?

[21:51] I move an emotion to receive and then I do have some comments. Okay, absolutely. Looking to see if I have a seconder online to, okay, a seconder online. I will start my speaker’s list and as always, I am timing. And my speaker’s list will commence with a Councillor Stevenson. Thank you. Yeah, I’ve talked about this one a couple of times now when it comes to the audit of creating a safe London for women and girls in the scope of that audit. So I still don’t see the scope outlaid here in this report, but from what I was provided this week, it’s going to be the Safe Cities London Action Plan that is going to be the scope of the audit.

[22:34] I just, it has me really looking at what the role of this audit committee is and how we function in terms of scope. Because if we’re choosing what areas to audit, but we don’t have a say as a committee in terms of the scope of the audit, we run into some of the same concerns that I have with the strategic plan. Because council could say we want to make the shelter safer. And if what comes forward is posting a poster that said, I’m just making something up, but a poster with contact numbers is how that’s fulfilled.

[23:10] And council doesn’t have a say in the specificity of what it looks like to make our shelter safer, then it raises concerns in terms of the outcome of the results of this. So I as a member of the audit committee asked that we move up this review of a safe London for women and girls as a result of a public discussion that was happening around the municipal or the allocation of tax dollars by this municipality to agencies that were supporting women in the sex work.

[23:47] So this was agencies that advocate for the decriminalization of sex work and want to bring safety, dignity and empowerment to street level sex workers. In raising questions about this and just asking, is this in alignment with our commitment to a safe London for women and girls? There were denigrating comments made in the media by agencies and complaints put to the integrity commissioner, all of which were tossed out.

[24:22] We get to as a council make a decision in terms of where this council is on that decision. Do we support the laws of this country that were upheld by the courts last September? Or are we taking a social justice position in terms of decriminalization of sex work? And I’m open to whatever council decides but we get to make that decision. Councilor, I’m just gonna interject there that it’s strictly the safe women’s. We can go to, we have other staff from that department with us today.

[24:56] But if I can just tie it in to the scope, right? Yeah, I don’t believe that the scope is part of sex work as it focuses on the UN declaration of public spaces. But that is my point is that it’s not talking about a current issue that is before council and the public when it could be. And I was hoping, maybe it, when I look at this, in our strategic plan, we have three expected results. So I guess my question is on the third one, on the first one, G, 1.1 G, it says continue to support women, gender, diverse and trans people and survivors to access a continuum of safe and quality housing and homeless prevention options.

[25:43] And 1.3 is the construction of public spaces and amenities specifically considering the safety of women, girls, non-bindery and trans individuals and survivors. So I guess I wanna know what role does this committee have in terms of setting the scope? Because I don’t believe it should be determined by management. I do believe it should be determined by the audit committee. I looked up the audit committee terms of reference and it is to oversee all audit matters, including the evaluation of internal and external services to ensure effective independent yet complimentary audit services are received.

[26:20] So I know I might be belaboring this point, but I’ve talked about it for two audit committees. This is now the third one. We’re being told the scope has been set and the report is due to come in June. And I want us to look at, even in this report itself, it talks about putting women and children who are fleeing domestic violence into a building of which there’s security and safety concerns. We have a report of women being put with men in this report. So let’s put your time limit. Did you want an answer from staff before your five minutes is up?

[26:55] Well, I think, yes, thank you. I will start with Ms. Dater’s Bear, the city’s manager. And Councillor, just you had mentioned 1.1G or some other things. Just what document are you out of realizing those documents aren’t part of today’s council? Strategic plan. Okay, so you’re in this draft plan, just remember online would not have any of this documentation. Thank you for that, Ms. Dater’s Bear. Thank you through the chair. Just want to be clear that the audit plan that’s in front of you, the review of the city’s progress towards the execution of creating a safe London for women and children initiative is approved by this audit committee.

[27:33] It is also respectful of our respective to our action plan for this strategic initiative. I acknowledge the councilor’s recommendation or suggestion about auditing the services that are provided by organizations in this community. I appreciate the request for that. That is not in the scope of the work that is done through this plan. I think we don’t, sorry, this plan is held with the city manager’s office. The work is done by city manager staff. What you are asking for through the chair is for an audit, I believe, of services provided by other organizations in this community and the way that they keep women safe.

[28:12] That’s a reasonable request. That would not come through this process. So if there was a desire for that, then I would suggest you put that back on the table for a different discussion. What space would one have said discussion and if a councilor was interested in it? To the city manager? I’m sorry. That’s okay, I asked if that was your suggestion of what space is that motion best to be brought forward in? Yeah, I think through you, Madam Chair, if the request is for audit and for the audit committee to review that kind of audit, then I think it comes back to the audit committee for concurrence for that and then a discussion with our audit provider about the services.

[28:59] I’ll just say again that some of those services we fund for a portion of the work that they do, but we are not the primary funder for some of those services. Sometimes the primary funder is the provincial government, donor dollars, those kind of things. So I think we would need to be clear again, and I don’t want to get into a scope discussion, but it would be about what the scope is and what the city’s role and responsibility in reviewing it would be vis-a-vis the amount of money we do or I don’t fund those agencies to do. Thank you, I’ll also make note that the councilor said they would like this report back before June 18th, but June 18th is the next scheduled audit committee.

[29:37] So it is coming into us the next one. And I return to councilor Stevenson for a follow-up. Yeah, thank you, I just want to be clear, I’m not asking for an audit of external services. What I’m asking for is an audit of this council’s and this city’s policies regarding providing a safe land and for women and girls that isn’t. So I guess my question to the auditor is, what is the scope of this audit? To MNP, if you want to provide any clarity of. So thank you, Madam Chair.

[30:16] So the scope of the audit is going to focus on again, the city put forward through strategic plan, certain initiatives with relation to creating a safe land and for women and girls. The scope of the audit is to check towards how the city has progressed against those and look to how progression has taken place, going against the measures and the execution of those initiatives. So it is looking at a compliance perspective of how we have set a path forward, the actions that we’ve taken in order to achieve those and the progress towards that.

[30:51] Councillor Stevenson. Thank you. So is it the 1.1 to 1.3 as a whole of our strategic plan? To MNP. Thank you, Madam Chair. Yes, and through you. So again, I don’t have that specific points in front of me, but it would be the initiatives and the actions that were set out to specifically achieve the Safe London and Women and Girls program. Those would be the pieces, yes. Councillor. So the scope is the full strategic plan 1.1 to 1.3.

[31:28] I understand you don’t have the specifics in front of you, but I guess my concern is that we would just take a few pieces of it and not address maybe the bigger issue here. So 1.1 to 1.3 is the scope fully for the audit. Then I’m fine with that. I am hoping that in the course of this audit, we do look at truly how we can make this city safer for London in actuality, not just in advocacy efforts.

[32:03] So that it’s how this city, I hear from women all the time how unsafe they feel, whether it’s international students feeling unsafe, getting off the bus downtown, whether it’s women in our shelter systems who are put in spaces with men, whether it’s women who are living on the streets in a very unsafe neighborhood of all East Village where there is rampant crime and drug. So I’m looking forward to this audit. Okay, thank you. Looking online. I’ll also note that part way through that discussion, Councillor Cuddy joined us.

[32:37] Councillor Cuddy, we’re still on 4.1. It’s been moved and seconded. I’m just making sure that you have no pecuniary interests to declare. Okay. So like I said, it’s just 4.1 on the floor. The briefing note, did you have any questions? Okay, member online. I didn’t see any hands up there. Councillor Stevenson, are you looking for an extension? I am. About a different topic. Still in the same briefing note?

[33:14] Same briefing note. And how long are you asking for? I just need two minutes. Okay, Councillor Stevenson’s looking for a two minute extension for the briefing note. She would need a seconder. Councillor Cuddy for two minutes, calling a hand vote of an extension. Motion carries. Okay, restarting the time at two minutes. Thank you. I appreciate it. The other thing on this audit tracker is the homelessness, which again, huge issue for Londoners and for this council. And I noticed that the assessment is going to be a value for money audit on the hubs implementation plan rather than any other aspect of our homelessness.

[33:55] So I wondered again, how is this chosen as the scope when what we hear is sort of the hubs is our success story? And there are a lot of concerns about other areas of the homelessness, why we wouldn’t choose one of the areas of concern. To MNP, if you’re able to speak to that? Through the chair. And again, the process by which we end up point through this is to have conversations with the program area as well as city leadership in order to kind of gain an understanding of where we would be able to take a look and go through things.

[34:32] Through that discussion, the hubs was identified as something where we can take a look, gain some understandings about, and again, with it being a value for money approach, seeing where there is understandings that we can take from that program. Again, from its successes and potentially some of its shortcomings, and those might be opportunities to extend to other programs the city might have. So again, in consultation with city leadership, the hubs was one that was identified because there can be some potentially interesting lessons learned that the city can take from that.

[35:05] And then again, maybe extend to other programs. So I put it back to you, Madam Chair, I’m not sure if there’s anything else from city leadership to add to that, but that would be my perspective on how we went about to select the hubs as the main focus of the audit. Thank you to the city manager, wanna add anything? Thank you through your chair. It’s my understanding that these scopes were approved by audit committee. Thank you, Councillor Stevenson. I don’t believe that’s true.

[35:37] I went, I could be wrong, I’m open to being wrong, but I went back through the last few audit reports, and this is the first indication of any snarrowing of the scope on the homelessness that I saw, maybe MNP has a comment. Hey, if we’d have to go back through audit, Ms. Barbone. Thank you, perhaps that can be helpful. So on the agenda actually, sorry, I should refer to what item, the updated risk-based internal audit plan. The one before you today has not only the projects, but the high-level scope included.

[36:16] That is simply an update from the original plan that was brought forward in the first year that MNP was hired, and through this audit committee was brought forward. So MNP through a number of iterations and updates to that over the last two years has brought forward that with the scope is part of the internal audit plan that the audit committee has approved. So when that plan was brought forward, certainly if there were adjustments that have been done, and that are being done currently, that scope has been set and approved as part of the plan for the projects that were brought forward with the associated timing through the audit committee, and then ultimately approved by council.

[36:55] Thank you, Councilor. So what I really am looking for here is just the greatest value to the public, right? In terms of what it is that we’re doing. MNP was hired in 2022, I believe, and we hadn’t even approved the hub plan then. So this talks about, I guess, in my limited experience in audit work as well, you don’t usually ask people where you’d like them to audit.

[37:30] And I’m not suggesting anything untoward, but I’m saying, why wouldn’t this audit committee say, hey, we, and get our input as council as to what we’ve heard in the public what the concerns are and focus our audit work there? 30 cents. These audits cost a lot of money, and for us to look at a value for money on the one area that seems to have agreement across the board, when there are significant concerns about agencies that have just started up like London Cares since 2019, arcade that has, you know, astronomically increased in terms of the money that we’re giving them.

[38:04] All of the, there’s tons of things, five million dollars was allocated through delegated authority in 2022. So I’ll be looking into this between now and council. I appreciate the time. - Thank you. That’s your two minutes. Looking for further speakers on the briefing note. Seeing none in chambers, seeing none online, calling the question, as it’s been moved and seconded already, all in favor? - I’m in no one that. Item 4.2 is the internal audit follow-up activities dashboard starting on page four.

[38:42] This is an MNP. It would be a motion to receive as well. Be looking for a mover and councilor Cuddy, a seconderter. Hey, I’ll second it. So it’s on the floor, looking to see if there’s questions from committee. Hey, I will start my speakers list with councilor Stevenson and based on her questions, I still might have one too.

[39:21] Okay, thanks. The vendor risk management audit had some high risk ratings. And I do know that council didn’t approve the business cases. But I’m just wondering if we could get some details on the pilot program that’s being put in. In number one, it talks about pilot program to capture contractor health and safety vendor performance monitoring based on high risk, high visibility projects. I wondered if some of our homeless service providers would be included in that pilot project, Mr. Collins.

[40:00] Through the chair to the committee, the 13 pilot projects that we’ve selected for the pilot project were predominantly infrastructure with some of the major works being through environment and infrastructure, as well as through facilities and fleet. And based on the outcome of that project, it will help inform what we’ve set out in our policy to enroll through our other procurements as well. So far, it’s been very informative, working with legal risk and our colleagues in enterprise supports, health and safety to come up with that program in light of our current fiscal realities.

[40:44] Thank you, Councilor. Thank you. Is there any consideration to or could there be a recommendation from this audit committee that we add some of our homeless service providers to this given that they’re untender contracts. So the non-competitive, given that I know for me, I’ve had to file freedom of information requests just to get the contracts for those agencies, the budgets aren’t there either. So I just wondered, given the increased value of them, you know, it’s becoming in the millions of dollars that are going there, if it would be possible to consider some of those social service providers there.

[41:28] Ms. Burbell. Thank you, through the chair. So certainly this is when we went through the original risk assessment, some of what we’re trying to determine is what constitutes high risk. So from a magnitude perspective, where the greater risk is, the multi-million dollars of contractual relationships that we have with a large construction projects and the risk from a health and safety perspective and the greater scrutiny on that that has been given through some of the current legal environment that we’re navigating.

[42:00] So from a capacity perspective, all of these pilot projects, because we did not receive any funding support, are literally being done through overtime with staff. So the challenge is that we’re trying to manage the high risk to try to inform the adoption of best practices going forward. Unfortunately, we just don’t have the capacity to expand that at this time. Councillor Stevenson. Yeah, thank you. I appreciate that. And it’s maybe something Council gets to address in terms of funding, something that might be that important.

[42:34] And I understand the magnitude issue as well. But even when we talk about creating a safe London for women and girls, I understand from a dollar perspective, it might not have the magnitude, but it is having a very significant impact on our city. So having some way to evaluate some of these vendors or to ensure that the health and safety matters are addressed, maybe there’s another way to do it than this. But I do think that some evaluation of the vendor performance to ensure that our dollars are going to create positive outcomes would be good.

[43:16] Even here it talks about in number two about code of conduct. We’ve got agencies publicly calling Councillors misogynist when votes go contrary to what they would like to see and under number four, it talks about health and safety. And there are some health and safety concerns, potentially with some of these vendors or maybe they’re not and it would be great to hear that there’s no concern. So I appreciate the answers. Thank you. Realizing this was a business case P73 that did not receive funding through the multi-year budget every year as we do the annual updates.

[43:55] Any Councillor is welcome to bring the whole case back or a portion of it. If you want to do that, those timelines will be going out shortly as the budget chair. Looking to see if there’s other questions or comments. I see none online. I’m seeing none in chambers. Calling the question, all in favor? Motion carries. 4.3 London Housing Development Projects, Lesson Learn Review.

[44:29] This is also MNP. Looking for a mover and seconder to put on the floor and then we can start our speakers list. I have a mover and Councillor Cuddy moved by Member Chima online. I will have a couple questions at some point on this one too, but happy to go to committee first. Okay, I will start in chambers then. Councillor Stevenson. Okay, thank you. Appreciate getting this report and appreciate the review of these two projects.

[45:02] I must say though that I was really alarmed for a couple of things. And so maybe there could be some speak to, so one of the things was this, the cancellation of the payment certifier. It says that it was terminated and not replaced. And I’m just wondering what reason was for the termination. Councillor, I believe you’re on page 16, section two.

[45:38] Correct. Sorry, just some of these reports, we just say the patient of which is, I had the same thing highlighted, so I knew where that one was. Looking to see if Mr. Mathers would like to come in first. Through the chair, so just give a little bit of background of what this role does is it’s a third party to review any costs that are brought forward by the contractor that may be outside of what the original estimates were. So that is very much needed and very much important when you don’t have that in house knowledge for some of assessing some of these costs.

[46:19] And there is, I think we would take this back as a recommendation to reconsider our approach, but what we had in our staff team was actually an ability to be able to review many of these costs because we had that internal experience and that knowledge to be able to assess the costs. So if at any time we needed to be able to reach out and have that certifier being part of the project, we had the opportunity to re-engage and do that. There’s also significant costs related to having that certifier to be able to provide this.

[46:52] So it was a balance between the risks that we felt was being occurred and the amount of the costs related to the certifier. So we felt that we were able to do that in house with our staff. So that’s the reason why that decision was made. And at the end of the day, as you can see from some of the other comments, we were below budget for the various items. So we do feel that that was a reasonable response at the time. Thank you. I’ll also note that Deputy Mayor Lewis joined us a while back as a visiting counselor to this committee. Councillor Stevenson.

[47:27] Thank you. So it was a requirement of the contract. Is that something we’ll take out going forward or did we think it was good at the time? And then we realized we had the staff that we could do the cost savings and cancel that. Mr. Mathers. Through the chair. So of course this is a, there’s some recommendations here in the audit. So we’ll take that back to our procurement team to identify whether this is something we wanna continue. Currently we have not been using the certifiers with our contracts and just something to ensure that council’s aware as well, is that when these contracts were entered into, this was a separate board and commission.

[48:07] So it was the Housing Development Corporation. Now we’re trying to fold into our practices with what’s consistent with the city of London procurement team. So historically we haven’t included certifiers part of those projects. And mainly because across the city and our procurement team, we’ve been able to have that in house specialty to be able to provide that additional assessment. So, but we will take of course, take back these recommendations and work with our procurement team to be, to assess whether this is something that’s important moving forward.

[48:41] Thank you, Councillor. I also note that we’re at committee and then I’m talking up to our five minutes, but you can speak multiple times. Just I know probably we’ll have a lot of notes highlighted. So happy to return to you or go to another member then circle back to you. If there’s another member that wants to, otherwise I’m gonna, yeah, okay. So the part that really concerns me is the part on page 18 where it says that, and it doesn’t say it right here, but it says that the building was originally intended for tenants different than what truly went in and that there was a requirement tied to the funding so that the federal rapid housing initiative funding that we agreed to said that it had to be targeted to specific vulnerable groups.

[49:30] And so what this is saying is that 100% of the tenants were either homeless, dealing with mental health addiction issues and/or fleeing domestic violence. And when I read this, it says that 33 units were for people who were homeless or at risk of homelessness, 14 units for people dealing with, dealing with currently mental health or addiction issues, and then 14 units for women and children fleeing domestic violence. I had no idea we put women into that building and children. I hear all kinds of terrible stories about that building, and this report validates it by saying that there’s gonna increase depreciation on the building, needs for safety and security, needs for wraparound services.

[50:18] I am quite frankly shocked that we have not heard from the women’s advocates in this city about this concern that I’m finding out about it in the audit committee, and I’m grateful to know about this, and I would like to know what comments there might be from this, because this is talking about it being a financial burden, potentially a safety concern for our most vulnerable, and that it was a requirement of the funding. And did this come before council, did the public have an opportunity to make a decision as to whether it was worth the money?

[51:02] Like was it worth the funding to have these safety concerns and this wear and tear on the building? I would just love to hear more about that. Thank you, I’ll also note that page 13 report did speak to the leveraging of funding that the city invested 5.3 million, but secured 32.8 million in funding. So Mr. Mathers, I’ll start with you, and then if we need other expertise online or in chambers, we will circulate.

[51:37] Through the chair, so as mentioned very correctly that there was a intended mix of population to be able to use this building, that was what the building was constructed based on, and even the finishes of the building were based on that, and that was, it’s a very prudent comment from the auditor as far as wanting to align the population that you’re providing it for, especially if you’re going to change and provide a more vulnerable population in a space, you’re gonna wanna have different finishes and different ways to be able to set up that building. So that is definitely absolutely a learning that we’re taking away from this.

[52:12] So as we’re all aware, and we’ve had many really important conversations, there is a very high need for ability to have people for this type of housing, especially people that are trying to exit homelessness. So at the time, there was a decision made that that was a higher need for the use of this building versus using it for other populations. So that decision was made based on the need at the time, and that’s all that I can provide on that, thanks. Thank you, Deputy Mayor Lewis.

[52:48] Did you have a question, or were you adding insight into this based on other experiences you might have in the realm of LMCH? I was raising my hand to share some perspective from an LMCH board hat. So I’m not sure that it’s tied to this question in particular, or more general comments. But I think that there is a piece of this that speaks to the councilor’s question directly.

[53:22] And I know it’s noted in the report as well. Even the LMCH, at the time that this project was first coming forward, the CEO was replaced. The board was dissolved and brought in house and taken under city management. I can, I will just say, and I’ll share more as a general comment. But this was discussed even at, and this report has been shared with our LMCH board as well, in terms of lessons moving forward.

[53:56] And I think that you see that reflected in some of the comments about Sylvan Street. And I think I might be watering off the specific question. So I’m gonna hold and I’ll wait for turn to just offer some general comments. Okay, I will have you next to my speaker’s list, but I can return to Councilor Stevenson in the interim. Thank you, yeah, so I’m wondering, are there any recommendations from staff in terms of addressing the fact that we have women and children in this building? Mr. Mathers, or if the composition of the residents in that building has evolved since its opening?

[54:35] Through the chair. So one of the things that we are looking at doing moving forward is being more mindful about when we do have changes of folks, ‘cause these are, this is their permanent residences. So it’s not something that we can necessarily pick someone up and move. It’s something that you have to be very deliberate about. So in replacing any vacated residences, we wanna be very conscious of who we’re placing in those areas. And we also, at the same time, wanna ensure that we have housing for families. And when we’re looking at this building, changing that mix over time would be very much appropriate.

[55:12] And we are gonna be moving forward, very mindful of who we take from our waiting list and apply it to include in this building. Councillor Stevenson. Thank you. I guess this is an example of where I think the audit for the compliance of a safe lending to women girls could really help us. Could there be policy recommendations here that we could be ensuring that if we’re placing women and children fleeing from violence, that we’re ensuring them a safe building? I mean, I think it’s true for all of our public housing. There are tremendous concerns about it not being safe.

[55:48] And it is something that we had in our strategic plan. And like I said, this is alarming. And I think there’s an opportunity for us to course correct here. I also think that I guess one of the questions I didn’t get an answer to was, was there an opportunity for council or the public to understand and have a say in this change in tenant profile on this building, in a sense what the price we were gonna potentially pay for accepting this funding? I can go to staff.

[56:24] I’ll also say as a member of council at the time, we were aware of things and certainly we’ve seen changes throughout as we move forward. Also looking for that right mix of people on who is weightless trumpet, but Mr. Mathers. The chair, I can’t point to specific report as this was also before my time in this area as well. So, but I can tell you that the general shift that happened was when the HDC moved into the city, the need and the request to be able to take from the city’s weight list versus just allowing this to be for open market purposes.

[57:01] So that was that link that provided the ability to be able to fill from the weight list. Councillor, you have just less than a minute left. Yeah, well, I’ll just say that, you know, this is sometimes what happens and how the politics influences us here in the municipality is we are suffering from some of the failed social policies that are mandated and tied to funding from the different levels of government. And I think it’s something that as a council and the public, we should decide whether we want in or out. There are municipalities who say no to the funding because they don’t like the strings that are attached to it.

[57:39] And as a councilor, I think I get to bring that up more so that the public has a say in it. I’m concerned too about the wear and tear on the building and the lack of reserve funds. And I think we really get to look at, you know, it’s not just the dollar value of the constant repairs but the safety issues. Thank you, looking into other members of the committee. I do have a question, but does the City Manager, has something to add on that?

[58:10] Okay. Thank you, through you, Chair. And thank you very much for the feedback with respect to safety within buildings. I can tell you as a City Manager, I have had a discussion with the Executive Director, the CEO of London Middlesex Housing Corporation. And we’ve talked a fair amount about the work that they’re doing to ensure safety for their tenants. And we specifically spoke about this building as well and some of the challenges that have been identified by our outside auditors. And so we are certainly committed to working with them to ensure their work and keeping their tenants safe and the work that we need to help them to do that.

[58:44] Additionally, if there are, and to the Councilor’s question about safety for women and children, as we know, one of the priority placements for us when we have individuals on our waitlist, on the coordinated waitlist, is to try to house women and children who are fleeing from domestic violence. If however, they feel unsafe in that environment, then they should be in contact with their housing provider to address those concerns as quickly as possible. Thank you. Committee will indulge me from the chair. I have no motions to move. There’s just a couple of questions. Building off from the reports. On page 19, it does speak to you.

[59:20] And I realize that Mr. Mathers has spoke to already try and change out some of the mix of the building. And I know it’s no difference in the conversations they’re having at LMCH when I toured the reimagined self-dale project, that there is a risk to plan annual replacement reserve funding will be insufficient to maintain this asset in good condition. And operating costs are higher than originally planned and revenues are lower than expected. Realizing we knew that, the report backs that up. Just looking to see, as we move this process right now, is that still at a sustainable level or the speed of conversation going back during future budget discussions?

[59:57] To the chair, we are working directly with LMCH to ensure that we get back to that sustainable level. Part of that is going to involve what we were discussing as far as looking at the population moving forward and making those course corrections, but we are actively working with them on it. Thank you, Deputy Mayor Lewis, you are next on the speakers list. Thank you, Madam Chair. So first of all, I would say moving forward, I absolutely agree with the parts of Councillor Stevenson’s point about we need to be and the proof is in the report, we need to be more mindful of the mix of people that are being put in buildings.

[1:00:41] I wanna take the opportunity to also say thank you to those council members present in specific administration in listening to the concerns that LMCH brought forward about tenant mixes and changing the tenant placement prioritization process. We are still in the early days of impact because tenant turnover is slow, it is hard to bring new tenants in and stabilize a mix when you are struggling with tenants who quite honestly, in some cases, to go through a landlord tenant board tribunal hearing over in eviction, over their behaviors, but that is actually a reality that we deal with at LMCH as well.

[1:01:25] I would say, and I don’t want us to put words in the mouths of everyone on the LMCH board, but I would say there’s a general consensus that if this same offer to manage this property was brought forward to LMCH again under these existing conditions, we would not touch it. From an LMCH perspective, it’s not a sustainable model. We are not a highly supportive housing provider, it’s noted in the report, we do not provide day-to-day services to tenants in this building.

[1:02:02] And that was one of the things that was tracked as a high risk in this audit report was the tenant mix and the inability to provide the appropriate supports there. So, but we have learned some lessons going forward and that’s highlighted in the report as well a bit. So things like securing elevators, which we’ve done at the Sylvan Street property. So that tenants can only access their own floor. When you’re talking about guest management challenges and things like that, that’s really a key factor in providing security for tenants, regardless of which population they fit into, whether it’s women and children, whether it’s seniors, whether it’s folks moving into stable housing from transitional beds from homelessness, tenant management continues to be a problem at this site in addition to the tenant challenges we have.

[1:02:55] And because the sustainability piece was raised, I do want to really let counselors and highlight this even from an auditor perspective in terms of where we’re getting our value for money, currently a tenant in an LMCH building on ODSP or Ontario Works as their sole source of income. The provincial contribution to their housing is less than $150 a month. Even though somebody in the market rent is getting a shelter a lot out of 400, the province only pays an RGI rate to London housing units of less than 150.

[1:03:40] There’s a slight difference between OW and ODSP, but that is not sustainable for LMCH in any way, shape or form moving forward to continue to have the capital reserves invest to invest back into our buildings and when that is our rental income. We really appreciate the contribution the city has made to our capital needs to help us get buildings in better shape, we’re investing. We’ve made something in the range of 400 furnace changeouts in the last year to get high-efficiency furnaces in so that we’re seeing energy savings.

[1:04:20] I mentioned securing the elevators. We’ve had elevator replacements. There are things that are going on because the city has funded it, but it is not sustainable. And buildings like Sylvan Street have been much better designed as a result of the lessons we’ve learned from baseline, but baseline continues to present some long-term challenges for LMCH to manage it effectively. 30 seconds, okay, perfect. Councilor Stevenson, you had 10 seconds left. Can I ask for more time?

[1:04:56] How much time are you looking for? Just two minutes again. Okay, we have a member asking for more time of two minutes. Is there a seconder? Seconded by Councilor Cuddy, calling the question all in favor. Sure. Hey, starting your time. Thank you, colleagues. I appreciate the extra time. I just wondered that this audit was looking at the two properties, 122 baseline and 403 Thompson Road. And I know that four or three Thompson Road was different because we turned it into supportive housing with Indwell.

[1:05:33] But it would have been, I’d be very interested in the results there in terms of safety, sustainability, and the other, the tenancy ratios and that kind of thing. Was that looked at? Were both properties looked at in the same way? And are there any comments? Hey, I will start a question with MNP. Through the chair, I’d like to ask our main auditor on this Jason Ducharm to comment on this. So I’ll pass it over to Jason and Madam Chair.

[1:06:10] Thank you, welcome Jason, the floor is yours. Thanks very much. Through the chair, it’s an excellent question that the Councilor raises. In the case of Thompson, there was less of a disconnect between the tenant mix that was being planned for and the actual tenants that reside in the building. So it was known it was going to be a supportive housing building. And so the kinds of wraparound services, the kind of security, the kind of things that you need for a more vulnerable population was thought through during the design process.

[1:06:48] That’s different. And I think that’s why our recommendation there focuses in on baseline road because baseline, there was this disconnect between early plans that were thinking about a mixed market rent, affordable housing with rental units. And then there was the shift to the 100% vulnerable. And so our recommendations primarily focused in on what happened with baseline. And that same issue was not so much a problem with Thompson because people knew going in that this was going to be a supportive housing project.

[1:07:23] And so it was designed for the tenant mix. Councillor Stevenson. Thank you, I appreciate that. From my recollection, it was designed to be just affordable housing. And then in May, we made the switch to highly supportive housing, which delayed the occupancy six months while renovations were done to accommodate that. But I understand it and I appreciate the answer. Thank you, looking for further questions or comments. Seeing none, it’s already been moved and seconded.

[1:07:57] Call on the question of all in favor of receiving this report. Okay, this moves us on to item 4.4, starting the proposed risk-based internal audit plan for 2025 through to 2026. Starts on page 26 of your agenda package, looking for a mover moved by Councillor Cuddy, seconded by Councillor Stevenson. Looking to see if there’s any questions or comments on the 2025 to 2026 plan. Seeing no questions online, I will start my speakers list in chambers with Councillor Stevenson.

[1:08:37] Thank you. So when I look at this internal audit plan on page 29 of the audit committee report, we’ve got on here the creating a safe London for women and girls and the homelessness. So creating a safe London for women and girls is compliance, homelessness is value for money. I guess what I’m wondering is, is there value or would it be appropriate for the audit committee to move a motion that would ask the compliance audit to look at 1.1G specifically of the strategic plan, which talks about accessing a continuum of safe and quality housing and homeless prevention options.

[1:09:28] Given what we’ve seen in this report and given the many concerns that I hear about women who are in coed spaces and lacking safe options, would it be appropriate for a motion like that? I guess like is it, would it be helpful or can the committee make such a direct request? Let me just one second. Okay, I’m gonna start with our finance team to see what’s already part of the scope of the contracted services to see if this would be within the scope.

[1:10:16] Thank you through the chair. So in terms of setting from the contractual relationship, MNP through its discussions with the audit committee, the management, they put forward the audits to go forward. They have approximately and they’ve got about five audits outlined each year. So certainly there could be different audits selected and or additional audits added, in which case you might want to bump some out. But certainly anything over and above what’s already there would be an additional cost from a contractual relationship.

[1:10:53] I think that’s what you were looking for. Well, the scope, I’m not asking to change the overall scope of it. I’m just asking that part of this complaints audit look at 1.1G. I don’t think it would need to be a new audit. I think MNP began this meeting for the next report coming up on the briefing note. Already said that the strat plan and items one would be in it. MNP just clarification of if this would include scope 1.1G. Yeah, through Madam Chair, yes it went to, we would look at strategy G and we will look at the various actions that are mapped and continue to understand if they’re on track or if they’re on deviations away from what’s the management’s put in the plan.

[1:11:38] So Councillor SRI, we’ll be left out. Thank you, Councillor. Okay, thank you. So I hear there’s no need for that. In terms of the homelessness, if this audit committee or council were to determine that rather than a value for money on the hubs plan, they would prefer to see a value for money focused in an area of more concern in terms of the homelessness, would we be able to bring that forward prior to council? Just one second. So Councillor, just clarification you’re wording that the homelessness type is the value for money but you wanted to focus on a different area of the plan?

[1:12:27] Well, I’m only one vote, but if council, I’m assuming, I believe this is the first time I’ve seen a specificity regarding what the value for money was gonna focus on within homelessness. So I’m asking if it is not too late to redirect the focus of that scope if council were to decide to do so. Okay, we can ask MNP if they’ve already started researching the homelessness value for money section of the audit that we would be expecting in September 2025. So through the chair, we’re happy to have that dialogue with Councilor Mantran.

[1:13:04] If there is value to look at a different component of the scope, we’re more than happy to kind of work with you to deliver that value. If that is what is the consensus when we’re not going to revisit what that scope looks like? Looking to the city councilor finance in chambers, if they would like to make comment of what’s— Thank you, through you, Chair. I just pulled up for our benefit. Also, I think, Councilor, you indicated 1.1G, correct? If I threw the chair, that’s right.

[1:13:39] Okay, so there are four actions identified in the action plan for safe lender for women and girls. It is actions 260, 261, 262, and 263. Sorry, the question that was passed that, the question that’s on the floor is homelessness value for money audit if the Councilor wishes to change the scope that’s been laid out. Sorry, they were content with 1.1G and the staff plan. So it was just the homelessness value for money audit that we’re expecting back in September 2025. The current scope lays out that we’re looking at the Hobbes implementation plan.

[1:14:15] And the Councilor’s question was, if we want to change what the plan is, MNP said it’s still up for discussion. Should Council have a different direction? Ms. Barbone? Can I have it still? Okay, go ahead. Thank you, through the Chair. So as ultimately the scope is set by audit committee and I would defer to the Chair, if Council wanted to change it, I’m wondering if it would need to come back to the audit committee to update the audit plan as a result of the change, so that MNP who does not come to Council would be able to comment on their ability to implement that audit and what that would mean from a timing perspective and their work in terms of moving that forward.

[1:15:05] Certainly from a compliance versus value for money, if the intent is to do an additional audit, then something would have to come off the table. If the intent is to replace that audit with something completely different, the whole entire scope would need to be confirmed by MNP and then ratified by the audit committee and then likely brought back to Council. But I defer to the clerk if Council could set the scope without consultation with the auditors to revise the internal audit plan. I’ll confer with the clerk in a moment.

[1:15:40] I’ll also gonna note that the audit committee does have a member of the public on it who would not have a voice at Council to speak to any of this. Okay, the clerk is advising that procedurally yes, Council can make a change to it. Just MNP wouldn’t be present to speak on the increase in cost.

[1:16:15] We might absorb the ripple effect of reports coming back in a pushback of timing of the reports, actually making it to audit as per the audit plan. Councillor Stevenson. Okay, thank you. I heard MNP say they were open to a scope shift there. I’m open to working with civic administration and MNP prior to Council. And if we can get something in writing or a verbal approval to make a switch because this audit committee, again, to my knowledge has not approved that we’re gonna do HUBS implementation plan.

[1:16:51] This is the first I’ve seen of it. And I’m not looking to change it. It’s a value for money. It’s perfect. It’s just a question of where that focus would be. And I do, again, think that this opens up a bigger dialogue in terms of policy direction that I’m gonna be looking into as well, where the scope, the detailed scope, gets to be approved by the audit committee prior to the implementation of the audit. I think that’ll be a helpful addition to this process to ensure that there’s the most effectiveness and value for the public in terms of these internal audits.

[1:17:28] The scope is the differentiator between how effective these audits are. I mean, are we looking at something that is of concern or not? And I’m just looking to get the most value for the time and the money that we’re investing in this. So thank you. Thank you, looking to other members of the committee or visiting counselors on this item. I’m seeing that online, seeing that in chambers, calling the question, all in favor?

[1:18:07] I’m gonna vote no just because I’d like to see some of these change. Motion carries. Okay, thank you to MNP for being with us today. That concludes your portion of the agenda. Next, we get to spend our afternoon with KPMG. 4.5, this is the audit planning report for the year ending December 31st, 2024. It’s gonna be a motion for approval. I will hold off on approval. I will need a motion on that when it’s time as they have a 15-minute overview presentation and walkthrough, last year was five minutes.

[1:18:48] So I apologize for that in this year. 15 minutes, give or take. And you can certainly introduce the members of your team and share the report as you wish for presentation time. And welcome again. Thank you very much, Madam Chair, and through you, we would like to go over the highlights of our audit plan for fiscal 2024. My name is Katie Dembach, the external audit partner from KPMG. I have with me today Emily Pelerin, who is an audit manager and Melissa Reden, who is an audit senior manager, who will all be assisting with the external audit.

[1:19:23] I’d like to start just by giving a brief overview of why we put this report together in the first place. It allows us to communicate with the committee anything that we are required to communicate under Canadian auditing standards. So I’m gonna pause you for one second. Sorry, we’re good. Just need to make sure I still had a quorum ‘cause the council left the room. We’re good, please proceed. Thank you. Anything we’re required to communicate with you under Canadian auditing standards, as well as anything we feel would be of interest or importance to you in your governance role over the external audit process.

[1:20:02] So we’re gonna really briefly walk through our slide deck here. Starting on page four, which is the audit highlights, I won’t go over any of those in detail as we will touch on them as we continue through the slide deck. Page five, and I’m referring to the page numbers at the bottom of our report, just for clarity, updates for a prior year audit plan. So there have been no new significant risks identified. There are, however, a couple of new accounting standards that have become effective for the city for the fiscal 2024 year-end.

[1:20:37] Those include a new standard over revenue, being PS3,400, a new standard relating to public-private partnerships, as well as some guidance around purchased intangibles. So we’ve had conversations with the finance team already and the analysis of the impacts of implementation as well underway. We’re having ongoing conversations about what that looks like for the city and what the impacts might be to the financial reporting for 2024. And we’ll certainly report back to the committee in our audit findings report on any important matters noted as a result of that.

[1:21:16] On page six, there is a newly effective auditing standards that deals with group audits, of which the city consolidated entity is considered a group audit, meaning it’s made up of many different components, being the boards and commissions mainly. As a result of this new standard, we’ve had to make some additional considerations and documentation as noted above in the table. And as Melissa will go through in a little bit more detail shortly here. So page seven provides information on materiality and how we use it to plan and perform the audit, as well as evaluate the effect of misstatements.

[1:21:58] Moving on to the next page. Materiality for the consolidated finish statements has been set at 25 million for the current year. This is based on the total prior year expenses, and we also look to total revenues and total assets as other relevant metrics. There has been an increase over prior year, primarily due to an increase in these accounts. We’ve also noted the group audit misstatement posting threshold of 1.25 million, which ultimately means any misstatements greater than this amount, we will bring to your attention during the presentation of our audit findings report.

[1:22:33] Page nine notes materiality they’ll be used for the non-consolidated city of London component, as this is the most significant component within the group. On page 10, as well as page 11, we have noted the parties that will be involved in the audit of the financial statements, both management specialists and our own. These are consistent with those used in prior years, so I’m not going to spend any further time on these pages. Page 12 looks similar to prior years, however, we do want to note that, as Katie mentioned, was the change in the auditing standard as it relates to group audits.

[1:23:11] Previously for purposes of the group, we had scoped in the city unconsolidated component, and this provided coverage over a significant portion of the group. You can see this was scoped in again this year on page 13. Due to the changes, we are now scoping in specific balances at certain additional components for purposes of group reliance, as you can see on page 14. Just want to clarify the statutory audits are still performed on all of the same entities as the past, so the actual audit work procedures will not change significantly from what was performed in the prior year.

[1:23:44] The key changes are a greater emphasis on a risk-based approach that requires a deeper understanding of the group and its components, as well as their environments and systems of internal control, new requirements for the group auditor to take overall responsibility to respond to the risks of the group financial statements, as well as enhanced directions to provision and review responsibilities of the group engagement partner, as well as more explicit requirements for documentation, including the evaluation of the component auditor and their work, and increased documentation due to evidencing the performance of these key changes. Moving on to page 13, as mentioned, this shows the non-consolidated city of London and the value of the total assets and total revenue that are subject to further audit procedures in this component, and just noting this provides coverage for over 80% of each of these balances as a percentage of the total group.

[1:24:37] Page 14 shows the additional components where further audit procedures are planned to be performed, and again, just clarifying that this only highlights those areas where the group will be placing reliance on the component auditor work and does not capture the full extent of testing that would be performed at these entities for the standalone audits. For example, the entities that are showing zero on this in this table just means that there is no revenue or asset balances that were scoped in for purposes of the group audit. Page 15 is just some additional information on the involvement in the work of component auditors, and I’m now going to pass it over to Emily to discuss risk assessment.

[1:25:16] Thank you. So page 16 and 17 provide a summary of the risk ratings that we have assigned to each of the business processes. All of the ratings have remained consistent with the prior year with the exception of the asset retirement obligations and portfolio investments. As those were implemented in 2023, we looked at those in further detail to ensure that they were implemented appropriately, but now the risk rating has been reduced. Moving on to page 18. 18 through 26 touch on each of the business processes that have been summarized in the risk rating summary, and it goes over our planned audit responses to each of those.

[1:25:57] I’m not gonna spend a lot of time on those as many of them are consistent with procedures that we have performed in previous years. However, I will highlight any key areas and changes that are seen on those pages. So on page 18, we do have our significant risk relating to management override of controls. This has been unchanged from prior years. It’s a non-rebuttable significant risk, and we perform our procedures, including journal entry testing, retrospective review of estimates, and evaluating significant unusual transactions in order to address this.

[1:26:31] Next, moving to page 20, where we look at tangible capital assets. Again, most of our procedures here have remained consistent from previous years, but two key changes I want to note are with assumed assets. So as you can see on that page, we have assessed tangible capital assets with a base risk rating. However, as assumed assets are within this, and given that the costs were reassessed during 2024, we have assigned an elevated risk level, and we are performing procedures over the assessment of those costs, as noted in our response.

[1:27:07] Additionally, we’ve highlighted that the public-private partnerships for the PS3160 standard are included here, and we are performing procedures to assess management’s analysis over that as well. Moving on to page 22, where we look at revenue, the one key change here is with respect to the new revenue standard, PS3,400. We have had discussions with management on their analysis, and we will continue to perform work as it’s outlined on here as well. I am passing through pages 23 to 26, as again, those procedures have remained consistent from previous years.

[1:27:48] There are no significant changes. Looking at page 27, this highlights the required inquiries that we have of you as the audit committee. So these highlight areas, including fraud risks and risk assessments, inquiries around the company processes, and any inquiries relating to related parties or significant unusual transactions. So we are bringing this to your attention today. If you are aware of anything that goes under these inquiries, we would ask that you make us aware at the end of this presentation.

[1:28:25] Page 28 highlights the timeline for our engagement. In December, we began our risk assessment procedures and discussions with management, having our planning discussion, and beginning inquiries with management those charged with governance and IT. We also began interim field work in January for looking at the assumed assets and business process walkthroughs, which will continue on in March of this year. And, of course, in April, we begin our audit field work for the year end, and we will present to you our findings in June. So I will pass it now to Katie to go over the audit quality.

[1:29:01] Thank you, Emily. So, slide 29, sorry, just talks about audit quality at KPMG, and you can see their information on how we go about ensuring that our audit quality standards are met, as well as some links to the firm’s transparency report and system of quality management. On page 30, we’ve identified a few areas that we consider to be key indicators of audit quality. So these include things like the composition and experience level of our team, the number of hours, technology that’s used in the audit, timing and preparedness of client documents, all of those things that drive audit quality, and we highlight them to you in the audit planning report because we are gonna report back to you on these during our audit findings report.

[1:29:52] Page 31 outlines our fees, which are as agreed to in the contract with the city. There were a few or are a few out of scope items that we’ve identified there, where any additional time would be built based on the number of hours that are incurred for that. And then the appendices include a variety of items. Some of, I won’t go through all of them, some of which are just reading of items that might be of interest to you. There’s a lot of live links contained as well within the appendices.

[1:30:27] Appendix B though on page 34, that’s where you can find some additional information on upcoming changes to public sector accounting standards. So there are a few things coming down the pipeline that will affect the city in future years. So welcome to read that at your leisure. Appendix F, page 40. Again, this is some thought leadership and insights, some of which are our specific municipalities, and there’s some live links contained there for you to reach as you wish.

[1:31:00] Appendix G, we’ve included here, it relates to fraud prevention. The reason we included is simply because we are seeing increased instances of fraud, hit the public sector and the not-for-profit sector these days, and so we are just making sure all of our clients are aware of resources that we have available. Should they be needed, whether it be staff training or consultations, should there be instances of fraud that are identified. So just wanted to point that out to the committee. And then the last item I’ll touch on briefly is Appendix I, which starts on page 48.

[1:31:37] This is something we prepare each year for your review, which is the indicators of financial performance. So where we look at certain metrics relating to the sustainability, flexibility, and vulnerability of the city in relation to some comparator municipalities. And we look at that on a five-year kind of rolling basis and have included for you here the similar type of charts and graphs that we’ve provided in the past. More for your information and conversation than anything else, but just wanted to highlight that that is also in our audit planning package.

[1:32:16] And that concludes the presentation of our audit plan. Thank you, that was 13 minutes, excellent job. Councilor Cuddy, are you still willing to move approval of this report? Councilor Cuddy is moving it. Councilor Stevenson’s second yet. I’ll start off first by going to committee as a question of KPMG was asked of us, which was page 57. Just asking if any members of the committee are currently aware of any fraud.

[1:32:53] I have not been made aware of. I see no concerns raised online. So that’s in there. Okay, starting a speakers list of questions, comments, or onwards. Starting with, I’m gonna start with Chima online. And then I will continue my speakers list in chambers. So you’re unmuted. Please go ahead, and if there’s any audio issues, I’ll let you know. Thank you, Madam Chair, through you. A couple of quick questions. Just wanted to understand on page nine component audit misstatement threshold.

[1:33:27] Any particular reason that’s lower this year than prior year? Okay, I think he’s at page nine. I’m just reflipping our pages in chambers. And then I will go to our presenters. So with regards to this, there was a bit of a change when it came to the group auditing standards and how we determine the audit misstatement reporting threshold that goes back to the group. So historically, the component audit misstatement posting threshold would be 5% of the component materiality.

[1:34:03] It has now changed to be 75% of the group audit misstatement posting threshold. So that is really just a part of the standard change more than anything else. Thank you, back to our member. Thank you. And the second question, I guess, is on page 34 on the employee benefits future change. This is just high level. Is that supposed to or from your understanding? Is that meant to be a reclassification on the balance sheet or will there be a potential P&L impact coming out of that as well?

[1:34:43] Thank you to our presenters. Through you, Madam Chair. My understanding is there is potentially an income statement impact to that as well. To be determined, what actually happens between now and the implementation date. But my understanding is there could be more than just a reclassification impact. Thank you for that reply. Back to our member. If there’s another question or a follow-up? Thank you, and from my understanding, it’s Mercer that’s going to be helping us with evaluating that impact.

[1:35:21] To our presenters, Ms. Denmark? Yes, that’s correct. We do rely on the city’s actuaries to assist in valuing this. Thank you. Thank you. I will continue my speakers with Councillor Stevenson. Thank you. I did have a question that came out of the budget discussions and it was around the unfunded liability reserve that had gone up a large amount in the past year and yet we don’t have a plan to pay that down other than some employment savings each year.

[1:35:57] Is that something that’s looked at within the audit? So I guess through you, Madam Chair, we do look at reserves and as part of the audit as well as support for the balances that are there. We do as part of our risk analysis, look for any risks within the financial statements. It’s not something we flagged as being a significant risk from an audit perspective, not to say that it doesn’t merit the attention of management. Thank you, Councillor.

[1:36:33] Okay, thank you. And then on page 57 in the audit report, 27 in the KPMG report where it talks about the required increase of the audit committee. In the middle section, it says including those complaints or tips received through the audit committee’s internal whistleblower program, if such programs exist. So I haven’t heard anything about that, but I wondered if we have such a program. Is it something, and if not, is it something we’ve looked at?

[1:37:07] Currently concerns would go to Mr. Schultez, is the city clerk and this committee’s clerk. Looking to the city manager, Ms. Barbone, I know some cities have different things in place, some don’t, if you were able to speak to this. Thank you, through you, Madam Chair, we do not currently have a whistleblowing policy. Councillor Stevenson. Thank you, and through you. I just wondered, is it something that Council or civic administration has looked at?

[1:37:42] I know other cities are sized, have auditor generals and other things, some cities like Toronto have reclaimed a lot of money through tips and complaints. So I just wondered if that has been looked at already here or maybe something that Council can look at going forward? Ms. Barbone. Thank you, through the chair. It’s been a number of years since that’s been looked at. That was looked at through the audit committee in years past, and I’m sorry I can’t remember exactly what year that happened, but they did look at that.

[1:38:17] At that time, they selected to go with the external internal auditor process, and that is what we currently still have today. Okay, sorry, Ms. Barbone, just a follow-up. Do you just follow us and usually have one or the other? Okay, so she’s just not, they normally have one or the other, and we’ve gone this route, Councillor. So for the public, if they’re watching this, if they did have tips or complaints or something that might go through a whistleblower program, what is the process for somebody to make that aware? Like, I know we don’t have an internal whistleblower program, but it says if the audit committees is aware of any tips or complaints.

[1:38:56] So if the public out there is watching and saying, “Well, I have a tip, but I don’t know who to call,” what, who should they call? Okay, I will note that a lot of people take a counselor. They represent some or serve upon committee. They’re interested and they reach out directly a lot of the time. I think I have questions, comments, and concerns, but to the City Manager. I thank you through you, Madam Chair. Certainly there are many avenues by which people could raise concerns with us. You’ve shared some of them already. Audit committee, internal audit or external auditor, you’re through council members, through the City Manager and through whatever other source to get the information, we take action on it.

[1:39:32] As you know, we even have a service, London portal. And so if information wanted to come through that way, that’s another option for people as well. Councillor Stevenson. Thank you. Yeah, and I guess I just concerned about the public, maybe not wanting to have the repercussions of the whistleblower portion, but that’s something we can talk about another time. The next column talks about related parties. And I just wondered if we could get clarification on what would be a related party to the City? To our presenters?

[1:40:05] Yes, please. Thank you through you, Madam Chair. For the audit purposes, a related party would be any entity that you don’t deal at arms length with. So we would consider the boards and commissions and actually within the financial statements, I believe they are all listed. What is considered a related party for the purposes of financial reporting? Councillor? No, thank you, that’s good. Thank you. Looking for further questions online.

[1:40:41] I see nine at the moment in chambers. I have not at the moment. And Deputy Mayor Lewis has departed. So this has been moved and seconded. And it was for the approval of it, calling the question of all in favor by a show of hands. Motion chairs. Thank you. That moves us on to the London downtown closed circuit television program for the year ending December 31st, 2024. This would also be to receive it. I wasn’t anticipating a staff presentation to go with this one.

[1:41:19] I am remembering correctly. So I have a mover in Councillor Cuddy. I’m happy to second it. So it’s on the floor. Looking to see if there’s any questions on it. This commences on page 96 of your agenda packages. Okay, I didn’t have any questions. Looking online, I see none. Looking in chambers, calling the question then, as it’s been moved and seconded for receipt.

[1:41:59] All in favor by a show of hands. Motion chairs. Thank you. This moves us on to the 2023 Audited Board Financial Statements for the Old East Village Business Improvement Area Board of Management. It’s gonna be a motion to receive it. This starts on page 100 of your agenda package. I’ll note as well that we have the manager, the BIA is with us in chambers today. He is happy to take any questions, just for member online knows that as well. And he has asked to speak to it as well.

[1:42:33] So looking to see if there’s any questions of the auditor first before we hear from the BIA. Okay, to our technology support, it’s gonna be the microphone lower front on this side. And it should be alive. Ms. Morrison, would you like to have your spot? Thank you, Madam Chair and through you. I do want the committee to know that I do have another committee at six o’clock tonight. So I’ll be as brief as I can be, but I thought it was important for me to be here today because not to make excuses, but to actually offer a few explanations as to why once again, the Old East Village BIA has been somewhat negligent when it comes to the reporting of our financials.

[1:43:20] I took on the role as a leadership role of the BIA as a general manager at the end of 2023. And one of the first things I did in that position is no different than when I’ve taken over businesses or been the lead of other organizations is to look through the financials. One of the first things that I did was I reached out to Katie from KPMG and we met. And so I take full responsibility for some of the delays when it comes to the audit because I was very open and honest with some of the issues that I saw that really should have been looked at.

[1:43:56] Katie and her team from KPMG have been an amazing help as has Sharon Swats from the city. And then of course getting involved with your city manager. And again, I make no excuses, but I do want you to know that moving forward, this will not be an issue. We have made some major changes, as you can see in the report as well. We have a bookkeeper now who is experienced when it comes to the operations of BIAs. We have a great reporting system.

[1:44:31] We have the supports from numerous city staff as well as our auditor. I think at times the auditor was somewhat surprised that the questions I was asking because a lot of people when they take a look at an audit, whether it be personal or business or organizations aren’t welcoming to sometimes working with an auditor. But I have to say that my concerns were directed, or the concerns that I had directed to the auditors were addressed and it’s a very fair report.

[1:45:06] And I appreciate the professionalism that they offered as well. They did visit our board meeting and provided a report in January. And our board is certainly supportive of the changes that have been made. So again, I don’t offer excuses, but an explanation you’ve been very patient and understanding. And I do apologize on behalf of the BIAs for the tiredness when it comes to financial reporting. A lot of the questions, or if you have questions today, many of them I will not be able to answer because some of this happened before my time.

[1:45:43] However, Katie certainly can answer because she was involved with the audit. But certainly if there’s questions to be addressed for moving forward, I’m more than happy to answer them. So thank you for your time, I appreciate it. Thank you, I appreciate you taking the time to be with us today, knowing you’re the last one up on the agenda and for keeping it under five minutes. As he has stated, this is the consolidated financial statements you’re ending December 31st, 2023. And the action items he spoke to for eliminating the problems going forward are found in page 102.

[1:46:18] As outlined in the report, those are publicly there and acknowledged by the BIA in chambers with us today. So the motion I’d be looking for is a motion to receive this report. It would be moved by Councillor Cuddy, seconded by Councillor Stevenson, looking to members, a committee online or in chambers to see if you have questions of the BIA or KPMG. I see nothing online, I’m seeing nothing in chamber. I will start my speakers listening chambers with Councillor Stevenson.

[1:46:52] Thank you, I’ll just take the opportunity to ask KPMG if there’s anything that they’d like to share with Council or that we should know about the delays or anything regarding these financial statements, anything that Council or this committee should be aware of? Mr. Stembach. Thank you for the question and through you, Madam Chair, as mentioned, we did report to the BIA’s board, all of the required communications under Canadian auditing standards. So all of the audit statements, any control deficiencies that were noted were reported to the BIA board as required.

[1:47:28] In terms of this committee to be aware of, I am grateful that there have been some changes made and applying going forward. At this point in time, I’m not aware of anything that would stop us from being able to complete the audit in a much more timely manner this year than last year and certainly have had Kevin and the board’s support in getting the information we need to complete the audit. So I don’t have any concerns or anything like that to address today. Thank you, Councillor. Satisfy, okay, last call for questions or comments online. Looking in, Mr. Stembach, please go ahead.

[1:48:06] Madam Chair, just a very good question. So I understand that it’s COVID funding we received, which represents a significant surplus. I did go over it briefly, but just wanted to clarify from KPMG’s perspective, none of that is refundable and that has all been earned as revenue and none of that is in third of the clawback. Just wanted to clarify that. Yeah, so thank you for that, that would have been money for the COVID-19 relief received from the city of London, making sure that we had no parameters set forth, that they’d have to spend it within a certain time or designate and that it’s up to the BIA’s.

[1:48:41] I will start with Ms. Stembach and then I will go to Mr. Morris and the gallery. Yeah, through you, Madam Chair, that is correct. There were no stipulations on the funding that would require it to be deferred, which is why you see it all recognized in fiscal 2023. Thank you, and to the BIA? Just to clarify as well that it was recently, it was in our report, our audit report as well that came to council that the funds are to be spent by the end of 2026. The funds did come in at the end of 2023. I made it clear to the finance department that they would not be spent at the end of, or by the end of 2023.

[1:49:19] Those funds were for our four direct support to our membership and we have initiated grants for safety and security. We’ve initiated a sign permit and sign installation grants. We had a special event grant and unfortunately, some of those funds are now being used for our private property cleanup, which is a substantial amount. To me, that’s not a direct support that’s going to help our businesses to grow. However, it’s something that’s much needed because you are all aware of the issues that we do have in the oldies village.

[1:49:55] So the funds will certainly be spent, probably the majority did this year. Thank you. Looking to see if there was a follow-up from Mr. Chima. No, thank you. Hey, looking in chambers to see if there’s any follow-up questions or comments. Seeing none by a show of hands, this was a motion to receive the report, all in favor. Motion carries. Thank you, I’ve not been made aware of deferred matters or additional business. That would move us to adjournment and I would need a motion to adjourn.

[1:50:26] Moved by Councillor Stevenson, seconded by Councillor Cuddy. All in favor, by a show of hand? Motion carries. Thank you everyone. I will see you back here in June.

Open Council

1st Meeting of the Audit Committee

Table of Contents

Open Council

1st Meeting of the Audit Committee

1. Call to Order

1.1 Disclosures of Pecuniary Interest

1.2 Election of Vice Chair for the term ending November 30, 2025

2. Consent

3. Scheduled Items

4. Items for Direction

4.1 Briefing Note From Internal Audit - MNP

4.2 Internal Audit Follow Up Activities Dashboard - MNP

4.3 London Housing Development Projects - Lessons Learned Review - MNP

4.4 Proposed Risk-Based Internal Audit Plan for Years 2025 and 2026 - MNP

4.5 Audit Planning Report for the Year Ending December 31, 2024 - KPMG

4.6 London Downtown Closed-Circuit Television Program for the Year Ending December 31, 2024 - KPMG

4.7 2023 Audited Board Financial Statements – Old East Village Business Improvement Area Board of Management

5. Deferred Matters/Additional Business

6. Adjournment

Full Transcript

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