The URL can be used to link to this page

AGENDA - Special General Committee - 20071127SPECIAL GENERAL COMMITTEE - AUDIi COMM117EE AGENDA TUESDAY, NO.07-49 7:00 PM R 2007 AURORA TOWN NALL PUBLIC RELEASE 23/11 /07 AupztpxA TOWN OF AURORA SPECIAL GENERAL COMMITTEE MEETING AUDIT COMMITTEE AGENDA NO. 07-49 Tuesday, November 27, 2007 Aurora Town Hall - Council Chambers 7:00 p.m. Mayor Morris in the Chair I DECLARATIONS OF PECUNIARY INTEREST H APPROVAL OFAGENDA RECOMMENDED: THAT the agenda as circulated by the Corporate Services Department be approved. 111 DELEGATIONS (a) Mr. Allister Byrne of Grant Thornton Accounting Re: Review of 2008 Audit Plan IV CONSIDERATION OF ITEM REQUIRING SEPARATE DISCUSSION V ADJOURNMENT Special General Committee Meeting No. 07-49 Page 2 of 2 Tuesday, November 27, 2007 AGENDA ITEMS 1. FS07-051 - 2008 Regional Audit Plan pg. 1 (Attachment #1 - 2008 Regional Audit Plan to be distributed at the meeting) RECOMMENDED: THAT the Audit Committee recommends to Council approval of the 2008 Regional Audit Plan. 2. FS07-052 - 2008 Audit Plan pg. 3 RECOMMENDED: THAT the Audit Committee recommends to Council approval of the 2008 audit plan as presented by Grant Thornton. 3. FS07-053 - Agreement with Region of York for Internal pg. 57 Audit Services RECOMMENDED: THAT the Mayor and Clerk be authorized to sign the Memorandum of Understanding with the Region of York for Internal Audit Services. 4. Memorandum from the CAO pg. 66 Re: Northern 6 Internal Audit Best Practices RECOMMENDED: THAT the memorandum from the CAO regarding the Northern 6 Internal Audit Best Practices be received for information. SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 ,1GENDA ITEM # TOWN OF AURORA AURORA AUDIT COMMITTEE No.FS07-051 SUBJECT: 2008 Regional Audit.Plan FROM: L. John Gutteridge, Director of Finance / Treasurer DATE: November 27, 2007 RECOMMENDATIONS THAT the Audit Committee recommends to Council approval of the 2008 Regional Audit Plan. BACKGROUND This report is being presented as the terms of reference for our Audit Committee identifies that the Audit Committee approve audit plans for the Municipality. In 2005 the Town of Aurora in conjunction with the Town of Newmarket, the Township of East Gwillimbury and the Township of Georgina entered into an agreement with the Region of York to provide Internal Auditing services. This year the service has been extended to include the Town of Whitchurch-Stouffville and the Township of King. With this service we have some flexibility with the audits the Region perform and if Council feels there is a need in another area we can see if we can change direction for 2008. From a staff perspective we feel that an audit of the Stronach Recreation Complex would be beneficial. ,607irihld=l�1� We have reported to Council on the work the Regional auditor has done on the Leisure Complex and the Purchasing and Accounts Payable functions. They have also done and audit on our infrastructure projects to which we are waiting for our final report and they are currently working on an audit of the Building, Department. Attached is the audit plan for 2008 and if Council would like any other areas addressed other than those identified we can suggest a change to the plan. We would like to report your management team find the audit services provided by the Region to be very beneficial. OPTIONS -1- SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 November 27, 2007 -2- Report No. FS07-051 1. Accept the plan as proposed. 2. Request the auditors to review other aspects of the operation. FINANCIAL IMPLICATIONS The fees for the Regional audit are determined by a predefined formula for all the municipalities participating. This year our fees will be reduced a little from previous years do to a greater participation with the two new municipalities. Our fees for 2008 are estimated to be $31,500. CONCLUSIONS This service provided by the Region provides great value to the municipality as it is independent from any other department in the municipality, which reduces potential conflict. LINK TO STRATEGIC PLAN Goal D: Ensure transparent, accountable and open governance in concert with informed and involved citizens Objective D1: Continue the commitment of fiscal responsibility and accountability ATTACHMENTS Attachment #1 — 2008 Regional Audit Plan PRE -SUBMISSION REVIEW Management Team Review— Wednesday, November21, 2007 Prepared by- L. John Gutteridge, Director of Finance/Treasurer -Ext. #4111 l � John Putteridge 'John S. Rogers Di?betof of Finance/Treasurer Chief Administrative Officer —2— SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 Audit Services Aurora Audit Status Update Nov 23, 2007 Audit Projects in reporting phase: • Infrastructure - Capital Delivery Audit Projects - Fieldwork Currently in progress: • Building Inspections Audits Planned for 2008 Leisure Services — SRC (Stronach Recreation Complex) — June 2008 An operational audit which will include: • a review of cash handling procedures and the CLASS system to ensure the completeness of revenues and accuracy of recording transactions to the accounting system • a review of compliance with provincial regulations for the pool and TSSA compliance for the ice/building. — 2A SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 ' LZAGENDA ITEM # R TOWN OF AURORA AURORA AUDIT COMMITTEE No.FS07-052 SUBJECT: 2008 Audit Plan FROM: L. John Gutteridge, Director of Finance / Treasurer DATE: November 27, 2007 RECOMMENDATIONS THAT the Audit Committee recommends to Council approval of the 2008 audit plan as presented by Grant Thornton. BACKGROUND The terms of reference for our Audit Committee identifies that the Audit Committee approve the annual audit plan. COMMENTS Attached hereto is the proposed audit plan as prepared by our auditors Grant Thornton. A representative of Grant Thornton will be in attendance to present a brief overview of the plan and to answer any questions. Council should be aware that if there are any areas of concern that you would specifically like the auditors to focus on you may request the auditors to do so. If it is over an above the scheduled amount of.time allocated for our audit it will involve additional costs. OPTIONS 1. Accept the plan as proposed. 2. Request the auditors to review other aspects of the operation. FINANCIAL IMPLICATIONS The fees for the audit plan as proposed are outlined on page 11, these are as per the tender submitted by Grant Thornton. CONCLUSIONS This is Council's opportunity to ask any questions about the plan or the audit process and —3— SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 November 27, 2007 - 2 - Report No. FS07-052 to make any changes should you feel they are necessary. The plan can be changed if you wish to focus on a specific area but if the request cannot replace some other part of the plan there will be an additional fee. From a management perspective we are satisfied with the plan as proposed. LINK TO STRATEGIC PLAN Goal D: Ensure transparent, accountable and open governance in concert with informed and involved citizens Objective 131: Continue the commitment of fiscal responsibility and accountability ATTACHMENTS Attachment #1 — 2008 Municipal Audit Plan PRE -SUBMISSION REVIEW Management Team Review — Wednesday, November 21, 2007 Prepared by. L. John Gutteridge, Director of Finance/Treasurer -Ext #4111 L. Joh tteridge S. Rogers` Director of Finance/TreasurerChief Administrative Officer —4— SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 ATTACHMENT1 Report to the Audit Committee — Initial Communication on Audit Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 Grant Thornton -5- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton T Grant Thornton LLP Chartered Accountants Management Consultants November 7, 2007 To the Members of the Audit Committee of The Corporation of the Town of Aurora We are pleased to enclose a copy of a document titled Report to the Audit Committee — Initial Communication on Audit Planning. This document covers the terms of our financial statement audit engagement of The Corporation of the Town of Aurora (the "Town') for the year ending December 31, 2007. This document will help the committee understand the audit and non -audit services we provide to The Corporation of the Town of Aurora and the level of responsibility assumed by Grant Thornton LLP under Canadian generally accepted auditing standards.. If you have any particular comments, concerns or additional expectations that may require us to undertake additional work over and above that which is currently contemplated, please do not hesitate to raise them at our scheduled meeting. Yours very truly, GRANT THOR�NTON LLP Allister Byrne, FCA Partner cc: L. John Gutteridge, Director of FinancelTreasurer 15 Allstate Parkway Suite 200 Markham, Ontario UR 694 T (416) 366-0100 F (906) 475-6906 E Markham@GrantThornton.ca W www.GrantThmnton.ca Canadian Membar of Grant Thornton Inlamellanal ry SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Contents Page Snapshot of the business and recent changes..........................................................................1 Achievingeffective governance................................................................................................3 Qualityassurance, independence and communication...........................................................4 Ouraudit approach..................................................................................................................5 Clientservice team...................................................................................................................9 Audittimetable.......................................................................................................................10 Feeschedule............................................................................................................................11 Appendices AppendixA — Engagement Letter..........................................................................................12 AppendixB — Letter of independence....................................................................................20 Appendix C — Accounting and auditing developments......................................................... 23 Appendix D — Audit requirements letter................................................................................38 -7- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Connniltea —Initial Communication on Audit Planning The Corporation ofthe Town of Aurora For the year ended Decernber 31. 2007 The Corporation of the Town of Aurora — Snapshot of the business and recent changes Town -specific changes We consider all relevant Increase in property taxes to fund capital projects. The Town has increased taxes by4%o after factors when preparing an growth to fund needed capital projects which will reduce costs over the long term. This will impact audit plan apeolllc.11y. . our work by setting our expectations of the increase in tax revenues to be at least 4%, and to help us tailored to your to identify significant capital projects to ensure completeness of the capital fund accounts. municipality E-commerce payment system. The introduction of a new e-commerce method of paying parking tickets called "Paytickets", will impact our approach for our IT specialists, to ensure the system is operating effectively. Broader business environment All Municipalities are slowly progressing through developing policies and procedures to determine the value of the tangible capital assets of the Town in accordance with the new PSAB requirements. The municipalities in York Region continue to make great strides in becoming more environmentally friendly through the use of green bins starting in fall 2007. Accounting & auditing standards As in prior periods, there continues to be significant changes with respect to fmancial reporting, accounting and auditing standards which impact on municipal governments. M-C SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 Accounting standards issued by the CICA and those under development which may affect your business for the current and future years include: • PSAB Section 3150— Tangible Capital Assets • PSAB Section 1200— Financial Statement Presentation • PSAB Section 2700— Segment Disclosures • PSAB Section 1150— Generally Accepted Accounting Principles • PSG-6 —Including Results of Organizations and Partnerships Applying Fair Value Measurement • PSG-7 — Tangible Capital Assets of Local Governments • Re -exposure Draft— Government Transfers • Statement of Principles — Financial Instruments Auditing standards issued by the CICA which may affect your business for the current and future years include; • Section 5365 — Communication with Actuaries • Section 9110 — Agreed -upon Procedures Regarding Internal Control over Financial Reporting • AuG-45 — Legislative Auditor's Report on Financial Statements of a Federal, Provincial or Territorial Government Further detail of the changes to accounting and auditing standards, including management's preliminary comments on their applicability to the Town are included in Appendix C. If you have any questions about these changes we invite you to raise them during our meeting. We will be pleased to address your concerns. SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 The Audit Committee helps set the tone for the organization by emphasizing honesty, ethical behaviour and fraud prevention Report to the Audit Committee —Initial Communication on Audit Planning 3 The Corporation of ilia Town of Aurora Far the year ended December 31, 2007 Achieving effective governance There are several fundamental components of effective governance. The Audit Committee plays a key role in achieving strong governance, particularly with respect to financial reporting. Roles in ensuring strong financial reporting -10- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 Quality assurance, independence and communication Quality assurance Grant Thornton up has a Grant Thornton LLP has a robust quality control program that forms a core part of our client robust quality control service. We combine internationally developed audit methodology, advanced technology, rigorous review procedures, mandatory professional development requirements, and the use of specialists to program deliver high quality audit services to our clients. In addition to our internal processes, we are subject to inspection and oversight by standard setting and regulatory bodies. We are proud of our firm's approach to quality assurance and would be pleased to discuss any aspect with you at your convenience. Independence We have a rigorous process where we continually monitor and maintain our independence. We are required to communicate this annually to the Audit Committee of the Town in writing and have attached our letter of independence as Appendix B. The process of maintaining our independence includes, but is not limited to confirming the independence of our engagement team members. Communication with the Audit Committee Throughout the audit Communication is key to quality service. In conducting our audit we will communicate frequently process we encourage the with the Audit Committee so that issues and concerns are addressed in a timely and productive Audit Committee to contact manner' us It there are any We encourage the members of the Audit Committee to contact us at any time if questions or questions or concerns concerns arise. -11- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee -Initial Communication on Audit Planning The Corporation of the Town of Aurora For the year ended Cecember 31, 2007 Our audit approach An understanding of your municipality and your business drives the Grant Thornton LLP audit approach. Tailoring is central to our approach and a key aspect in providing the Town with quality service. The objective of our audit is to obtain reasonable assurance that the financial statements are free of material misstatement. The responsibilities of the Audit Committee and management are broad and therefore the financial statement audit engagement is not designed to identify all matters which may be of interest to the Audit Committee or management in the discharge of these responsibilities. -12- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Cominitlee -Initial Communicalion on Audit Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 However, we will communicate the following should we encounter them during the course of our audit: • Misstatements, other than ttivial errors • Fraud • Misstatements that may cause future financial statements to be materially misstated • Illegal or possibly illegal acts, other than those considered inconsequential, and • Material weaknesses and significant deficiencies in internal control over financial reporting. Internal control Our audit includes gaining an understanding of the Town's internal control over financial reporting. Our understanding will focus on processes associated with the identified financial statement risk areas (see below). The audit team uses this understanding to determine the nature, extent and timing of our audit procedures. Our understanding may also result in valuable internal control findings for your consideration. Please note that the objectives of a financial statement audit are different from fiduciary control objectives. Therefore, management and the Audit Committee cannot rely on our findings to discharge their responsibilities in this area. Risk assessment Our risk assessment process has identified the following areas where we will focus our attention: The following areas have been identified as low risk and our audit approach for these areas will be as follows: -13- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee -Initial Communication on Audil Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 Materiality ...In our opinion,. the The purpose of our audit is to provide an opinion as to whether your financial statements present financial statements fairly, in all material respects, the financial position, results of operations and cash flows in present fairly, In all accordance with generallyaccepted accounting principles as of to date. Therefore, materiality is a material resoecle, the critical auditing concept and as such we apply it in all stages of the engagement. financial position of... Applying mgthe concept of materiality at the planning and execution stage of the engagement recognizes that the audit team cannot verify every balance, transaction or judgment made in the financial reporting process. During audit planning, we make a preliminary assessment of materiality for purposes of developing our audit strategy, including determining the extent of our audit procedures. During the completion stage, we consider not only the quantitative assessment of materiality, but also qualitative factors, in assessing the impact on the financial statements, our audit opinion and the matters reported to the Audit Committee. Fraud considerations We are responsible for planning and performing the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement caused by error or by fraud. Our audit procedures consider the requirements of CICA Handbook Section 5135, The Auditor's Responsibility to Consider Fraud and Error, Section 5135 was issued to heighten the awareness of the potential for fraud when planning and executing audits and it emphasizes the need for Fraud can occur In any professional skepticism during the audit. municipality, at any time, and can be perpetrated by The following provides a summary of some of the fraud -related procedures we plan to perform anyone. during the audit. • Discuss amongst the engagement team where the financial statements may be susceptible to material misstatement due to fraud. • Gather information to identify the risks of material misstatement due to fraud, including our understanding of internal control and making detailed inquires to both management and the Audit Committee. • Using the information gathered in our risk assessment process. -14- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communicalion on Audit Planning The Corporation of the Town of Aurora For the year ended December 31, 2007 Client assistance and readiness Client assistance and readiness are integral to the successful meeting of our targeted report release date. As presented further below, it is also critical in meeting our agreed fee. To facilitate the communication process, we have provided management with a letter detailing expected assistance and the critical milestone dates. Deliverables we are commuted to We are committed to executing our audit in a most effective, efficient and timely manner. We will executing our audit In a provide the following deliverables to the Audit Committee: most effective, ellicient and timely manner • Initial communication on audit planning, • Audit report on the financial statements of the Town, • Audit report on the financial statements of the Aurora Public Library Board, • Communication of audit results, • Management letter that provides our observations and recommendations regarding internal controls, based on matters identified during the course of our audit, and • Report on Compliance with the Federal Gas Tax Legislation -15- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Commillee- Initial Communication on Audit Planning The Gorporat ion of the Town of Aurora For the year ended December 31, 2007 - Client service team We have assembled a team of outstanding professionals to demonstrate our commitment to quality and service to the Town. -1 6- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audll Cornrnillea — nillal Cornm unloalion on Audit Planning 10 The Corporalion of the Town of Aurora For the year ended Decernher 31, 2007 Audit timetable -17- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Our approach to dealing wlih lees is to avoid surprises Report to the Audit Committee —Initial Communication on Audit Planning 11 The Corporation of the Town of Aurora For the year ended December 31, 2007 Fee schedule Fee proposal considerations Upfront and periodic discussions are central to our approach in dealing with fees. Our goal is to avoid surprises by having early and frank communication. We wish to provide the Town with a competitive price and fair value, while also allowing sufficient audit hours to conduct an effective audit and deliver quality service. The proposed fee for the audit for the year ended December 31, 2007 is based on the level of activity and the anticipated complexity of the audit of the Town and Library's financial statements. The proposed fee is based on receiving the following from management: • Draft financial statements including the notes to the financial statements; • Ail working papers and schedules as outlined in our requirements letter; • Trial balance together with reconciled control accounts; • All books and records made available to us when requested; and • Use of the Town's staff to help us locate information and provide explanations. Our ability to dehver the services outlined in the agreed timetable and our proposed fee will depend upon these schedules being available/ tasks being completed by the due dates. If there are any variances to the above plan, we will discuss them with you and agree to any additional fees before costs are incurred, wherever possible. Any unforeseen work outside the scope of this proposal will be billed separately after discussion with appropriate Town officials. am SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —I nit ial Communication on Audit Planning 12 The Corporation of the Town of Aurora For the year ended December 31, 2007 Appendix A — Engagement Letter -19- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton r Grant Thornton LLP Charlored Accountants Management Consultants October 12, 2007 The Corporation of the Town of Aurora 1 Municipal Drive, Box No. 1000 Aurora, Ontario, L4G 6J I Attention: Mr. L. John Gutteridge Dear Mr. Gutteridge: Thank you for reappointing Grant Thornton LLP as your auditors for the year ending December 31, 2007. The purpose of this letter is to confirm our mutual understanding of the terms of our engagement. OBJECTIVE, SCOPE AND LIMITATIONS Our statutory function as auditors of The Corporation of the Town of Aurora (the "Town") is to report to the ratepayers by expressing an opinion on the Town's annual consolidated financial statements. We will conduct our audit in accordance with Canadian generally accepted auditing standards and will issue an audit report. The audit will not be planned or conducted in contemplation of reliance by any third party or with respect to any specific transaction. Therefore, items of possible interest to a third party will not be specifically addressed and matters may exist that would be assessed differently by a third party, possibly in connection with a specific transaction. An auditor conducting an audit in accordance with Canadian generally accepted auditing standards obtains reasonable assurance that the consolidated financial statements taken as a whole are free of material misstatement, whether caused by fraud or error. It is important to recognize that an auditor cannot obtain absolute assurance that material misstatements in the financial statements will be detected because of: (a) factors such as use of judgment, and the use of testing of the data underlying the financial statements; (b) the inherent limitations of internal control; and '(c) the fact that much of the audit evidence available to the auditor is persuasive rather than conclusive in nature. Furthermore, because of the nature of fraud, including attempts at concealment through collusion and forgery, an audit designed and executed in accordance with Canadian generally accepted auditing standards may not detect a material fraud. Further, while effective internal control reduces the likelihood 15 Alls!dle Parkway Suite 200 Markham Onta^o L39 r34 T (4161366-0100 F (905) 475-8906 E Ma,1,hmnC4Gran1ThorMoll ca W www Granlrhornlort Canadian Member of Grant Thornton International -20- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton r that misstatements will occur and remain undetected, it does not eliminate that possibility. For these reasons, we cannot guarantee that fraud, error and illegal acts, if present, will be detected when conducting an audit in accordance with Canadian generally accepted auditing standards. MANAGEMENT'S RESPONSIBILITIES Management is responsible for: Financial Statements a) the preparation and fair presentation of the Town's consolidated financial statements in accordance with Canadian generally accepted accounting principles; Completeness of information b) providing us with and making available complete financial records and related data, and copies of all minutes of meetings of the Town Council and the Audit Committee; c) providing us with information relating to any known or probable instances of non-compliance with legislative or regulatory requirements, including financial reporting requirements; d) providing us with information relating to any illegal or possibly illegal acts, and all facts related thereto; e) providing us with information regarding all related parties and related party transactions; Fraud and error f) the design and implementation of internal controls to prevent and detect fraud and error; g) an assessment of the risk that the financial statements may be materially misstated as a result of fraud; h) providing us with information relating to fraud or suspected fraud affecting the entity involving:. i) management; - ii) employees who have significant roles in internal control; or iii) others, where the fraud could have a material effect on the financial statements; i) providing us with information relating to any allegations of fraud or suspected fraud affecting the entity's financial statements communicated by employees, former employees, or others; j) communicating its belief that the effects of any uncorrected financial statement misstatements aggregated during the audit are immaterial, both individually and in the aggregate, to the financial statements taken as a whole; Recognition, measurement and disclosure k) providing us with its assessment of the reasonableness of significant assumptions underlying fair value measurements and disclosures in the consolidated financial statements; - 1) providing us with any plans or intentions that may affect the carrying value or classification of assets or liabilities; m) providing us with the measurement and disclosure of transactions with related parties; n) providing us with an assessment of all areas of measurement uncertainty known to management that are required to be disclosed in accordance with CICA Handbook — Accounting Section 1508; -21- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton T o) providing us with information relating to claims and possible claims, whether or. not they have been discussed with the Town's legal counsel; p) providing us with information relating to other liabilities and contingent gains or losses, including those associated with guarantees, whether written or oral, under which the Town is contingently liable; q) providing us with information on whether or not the Town has satisfactory title to assets, liens or encumbrances on assets, and assets pledged as collateral; r) providing us with information relating to compliance with aspects of contractual agreements that may affect the financial statements; s) providing us with information concerning subsequent events; and Written confirmation of significant representations t) providing us with written confirmation of significant representations provided to us during the engagement on matters that are: i) directly related to items that are material, either individually or in the aggregate, to the financial statements; ii) not directly related to items that are material to the financial statements but are significant, either individually or in the aggregate, to the engagement; and iii) relevant to your judgments or estimates that are material, either individually or in the aggregate, to the financial statements. It is agreed that for any electronic distribution of your consolidated financial statements and our report thereon, management is solely responsible for the accurate and complete reproduction of the consolidated financial statements and our report thereon. While the report may be sent to the Town electronically by us for .your convenience, only the signed (electronically or manually) report constitutes the Town's record copy. If management intends to publish or otherwise reproduce our report (or otherwise make reference to Grant Thornton LLP) in a document that containsother information, council and management agrees to (a) provide Grant Thornton LLP with a draft of such document to read, and (b) obtain our approval for inclusion of our report, before the document is finalized and distributed. Management also agrees that if our name is to be used in connection with the consolidated financial statements, it will attach our auditors' report when distributing the consolidated financial statements to third parties. OUR RESPONSIBILITIES We will perform the audit in accordance with Canadian generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements present fairly, in all material respects, the financial position, result of operations and cash flows in accordance with Canadian generally accepted accounting principles. Accordingly, we will plan and perform our audit to provide reasonable, but not absolute, assurance of detecting fraud and errors that have a material effect on the consolidated financial statements taken as a -22- SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton Fa whole, including illegal acts whose consequences have a material effect on the consolidated financial statements. One of the underlying principles of the profession is a duty of confidentiality with respect to client affairs. Accordingly, except for information that is in or enters the public domain, we will not provide any third party with confidential information concerning the affairs of -the Town without the Town's prior consent, unless required to do so by legal authority, or the rules of professional conduct/code of ethics. We will communicate in writing to those responsible for financial reporting oversight, the relationships between Grant Thornton LLP and the Town (including related entities) that, in our professional judgement, may reasonably be thought to bear on our independence. Further, we will confirm our independence with respect to the Town.. The objective of our audit is to obtain reasonable assurance that the consolidated financial statements are free of material misstatement. However, if we identify any of the following matters, they will be communicated to the appropriate level of management: (a) misstatements, resulting from error, other than trivial errors; (b) fraud or any information that indicates that a fraud may exist; - (c) any evidence obtained that indicates an illegal or possibly illegal act, other than one considered inconsequential, has occurred; (d) significant weaknesses in the design or implementation of internal controls to prevent and detect fraud or error; and (e) related party transactions identified by us that are not in the normal course of operations and that involve significant judgments made by management concerning measurement or disclosure. The matters communicated will be. those that we identify during the course of our audit. Audits do not usually identify all matters that may be of interest to management in discharging its responsibilities. The type and significance of the matter to be communicated will determine the level of management to which the communication is directed. We will audit the consolidated statement of financial position at December 31, 2007, and the related consolidated statements of financial activities and consolidated statement of changes in financial position for the year then ended for the Town. Upon completion of our audits, we will provide you with our audit report on those consolidated financial statements. We will consider the Town's internal control over financial reporting solely for the purpose of determining the nature, timing and extent of auditing procedures necessary for expressing our opinion on the financial statements. This consideration will not be sufficient to enable us to render an opinion on the effectiveness of internal control over financial reporting. However, we will inform the appropriate level of management of any significant weaknesses in internal control that come to our attention. —23— SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton Va Other Services We will also carry out the related audit work to enable us to issue the Audit Report on the Town's compliance with the Funding Agreement for the Transfer of Federal Gas Tax Revenues under the New Deal for Cities and Communities dated November 14, 2005 with the Association of Municipalities of Ontario. Any additional services that you may request and we agree to provide will be the subject of separate written arrangements. OTHER MATTERS Privacy and Confidentiality Grant Thornton LLP is committed to the protection of personal information. During the course of planning, performing and reporting on the results of our audit of the Town's consolidated financial statements, partners and employees assigned to this engagement will need to obtain, use and disclose personal information in the possession of, or under the control of, the Town. The Town is responsible for obtaining, when required under law or regulation, consent from those parties that provided the Town with their personal information for Grant Thornton LLP to obtain, use and disclose it for its required purposes. Use of Electronic Communications During the course of our engagement, we may need to electronically transmit confidential information to each other and to outside specialists or other entities engaged by either Grant Thornton LLP or the Town. Electronic methods include telephone, cell phones, e-mail and fax. These technologies provide a fast and convenient way to communicate. However, all forms of communications have inherent security weaknesses and the risk of compromised confidentiality cannot be eliminated. The Town agrees to the use of electronic methods to transmit and receive information. Working Papers/Reports All materials, reports and work created, developed or performed by Grant Thornton LLP, including its working papers during the course of the audit are the property of Grant Thornton LLP. Fees and Expenses Our audit fee for the year ended December 31, 2007 has been estimated to be $51,000. The fee estimate by Grant Thornton LLP take into account the agreed -upon level of preparation and assistance from your personnel and providing the information to us on the dates specified in our Requirements Letter. Any delays in providing the requested information on the specified dates could result in an extra billing. We will discuss such circumstances with you should they arise. Normal administrative expenses which include items such as computer and technology usage, software licensing, research and library databases, photocopies, postage supplies and delivery, fax charges, printing -24- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton T of statements and reports, and similar expense items are charged on the basis of a percentage of our professional costs. The administrative fee is 3.5 % of the audit and tax fees quoted. Bills, including expenses will be rendered on a regular basis as the assignment progresses. Accounts are due when rendered. We retain the right to suspend or terminate our service in the event of non-payment, and you will be obligated to compensate us for all time expended and to reimburse us for out-of-pocket expenses through the date of termination. Interest on Overdue Accounts All accounts outstanding over 30 days will be charged interest at the rate of 1,5010 per month (18% per annum) until paid. Taxes All fees and other charges do not include any applicable federal, provincial, or other goods and services or sales taxes, or any other taxes or duties whether presently in force or imposed in the future. Any such taxes or duties shall be identified and charged separately on our billings. Other If, in our opinion our professional obligations require it, we may resign from the engagement prior to completion. Should the Town not fulfill its obligations set out herein and in the absence of rectification by the Town within 10 days Grant Thornton LLP, upon written notice to you, may terminate its performance and will not be responsible for any loss, cost pr expense resulting from such early termination. Limitation of Liability In any action, claim, loss or damage arising out of the engagement, the Town agrees that Grant Thornton LLP's liability will be several and not joint and several, and the Town may only claim payment from Grant Thornton LLP of Grant Thornton LLP's proportionate share of the total liability based on degree of fault. Any action against Grant Thornton LLPmustbe commenced on or before the date which is the earlier of. i) eighteen months from the date on which our audit report is provided to you and, ii) the date by which an action must be commenced under any applicable legislation other than limitation legislation. In no event shall Grant Thornton LLP be liable to the Town whether the claim be in tort, contract or otherwise, for an amount in excess of the professional fees paid by the Town for the engagement. In no event shall Grant Thornton LLP be liable to the Town, whether a claim be in tort, contract or otherwise for any consequential, indirect, lost profit or similar damages, or failure to realize expected savings. Grant Thornton LLP will use all reasonable efforts to complete within any agreed upon time -frame the performance of the services described above. However, Grant Thornton LLP shall not be liable for -25- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton T failures or delays in performance that arise from causes beyond its control, including the untimely performance or non-performance by the Town of its obligations. Governing Law This engagement will be governed by the laws of the province of Ontario. The Town and Grant Thornton LLP agree to submit any unresolved dispute or any litigation arising as a result of or in relation to this letter to the exclusive jurisdiction of the Courts of the Province of Ontario. Survival of Terms This engagement letter will continue in force for subsequent audits unless terminated by either party by written notice prior to the commencement of the subsequent audit. The Town and Grant Thornton LLP agree that the limitation of liability paragraph will survive the termination of this engagement contract. We are proud to serve as your auditors and we appreciate your confidence in our work. If you have any questions about the contents of this letter, please raise them with us. If the services outlined herein are in accordance with your requirements and if the above terms are acceptable to you, please have one copy of this letter signed in the space provided below and return it to us. Yours very truly, GRANT THORRNNTTON LLP ��-��•�. ALP Allister Byrne, F.C.A. Partner The services and terms as set forth in this letter are agreed to. THE CORPORATION OF THE TOWN OF AURORA By: L. John Gutteridge, Director of Finance/Treasurer Date J:\Data\Continuing Files\T\Town of Aurara\CorrespondeneeTiscat 2007\Town of Aurora- Engagement Letter 2007.doc -26- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit planning 20 The Corporation of the Town of Aurora For the year ended December 31, 2007 Appendix B - Letter of independence -27- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton LLP Chartered Accountants Management consultants Grant Thornton T November 7, 2007 The Audit Committee The Corporation of the Town of Aurora 1 Municipal Drive, Box No, 1000 Aurora, Ontario, L4G 671 Dear Audit Committee Members We have been engaged to audit the consolidated financial statements of The Corporation of the Town of Aurora (the "Town") for the year ending December 31, 2007. Canadian generally accepted auditing standards (GAAS) require that we communicate at least annually with you regarding all relationships between the Town, its subsidiary - The Aurora Public Library, and Grant Thornton LLP that, in our professional judgment, may reasonably be thought to bear on our independence. In determining which relationships to report, these standards require us to consider relevant rules and related interpretations prescribed by the appropriate provincial institute I ordre and applicable legislation, covering such matters as: (a) holding a financial interest, either directly or indirectly, in a client; (b) holding a position, either directly or indirectly, that gives the right or responsibility to exert significant influence over the financial or accounting policies of a client; (c) personal or business relationships of immediate family, close relatives, partners or retired partners, either directly or indirectly, with a client; (d) economic dependence on a client; and (e) provision of services in addition to the audit engagement. We have prepared the following comments to facilitate our discussion with you regarding independence matters arising since October 4, 2006, the date of our last letter. We. are not aware of any relationships between the Town, its subsidiary - The Aurora Public Library, and Grant Thornton LLP that, in our professional judgment, may reasonably be thought to bear on our independence, that have occurred from October 4, 2006 to November 7, 2007. The total fees charged to the Town for audit services were $59,000 and for non -audit services were $10,600 during the period from October 4, 2006 to November 7, 2007. 15 Allatele Parkway Suite 200 Madaham. Onto,,. 3n 6134 T (4161966-0100 F (905) 475 8906 E MArkham@GrdntThorntore ca W www. G✓anlThomlan ca Cana0lnn Membe, of Grant Thornton lnte✓natWol mm SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Grant Thornton Fj GAAS requires that we confirm our independence to the Audit Committee in the context of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario. Accordingly, we hereby confirm that we are independent with respect to the Town within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Ontario as of November 7, 2007. This report is intended solely for the use of the Audit Committee, Town Council, management, and others within the Town and should not be used for any other purposes. We look forward to discussing with you the matters addressed in this letter at our upcoming meeting. Yours truly, GRANT THORNTON LLP Chartered Accountants Allister Byrne, FCA Partner cc L. John Gutteridge, Director of Finance/Treasurer -29- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communi Cation on Audit Planning 23 l"he Corporation of the Town of Aurora For the year ended December 31, 2007 Appendix C — Accounting and auditing developments -30- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report tothe Audit Committee —Initial Comm unica l ion on Audit Planning 24 The Corporation of the Town of Aurora For the year ended December 31, 2007 PSAB Accounting developments -31- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee—Inilial Communication on Audit Planning 25 The Corporation of the Town of Aurcra For the year ended December 31, 2007 - -32- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 26 The Corporation of the Town of Aurora , For the year ended December 31, 2007 -33- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 27 The Corporation of the Town of Aurora For the year ended December 31, 2007 -34- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Commis tee --Ins l ial Communica li on on Audit Planning 28 The Corporation of the Town of Aurora For the year ended Uecem then 31, 2007 -35- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee — Initial Communication on Audit Planning 29 The Corporation of the Town of Aurora. For the year ended December 31, 2007 -36- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 30 The Corporation of the Townof Aurora For the year ended December 31, 2007 -37- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Cornmitlee - -Initial Gomm unicalion on Audit Planning 31 1'he Corporalion of the Town of Aurora For the year ended December 31, 2007 IME SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Commillee —Initial Communicalion ch Audit Planning 32 The Corporation of the Town of Aurora For the year ended December 31, 2007' -39- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee - Initial Communication on Audit Planning 33 The Corporation of the Town of Aurora For the year ended December 31, 2007 _ -40- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 34 The Corporation of the Town of Aurora For the year ended December 31, 2007 -41- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee— Initial Communication on Audit Planning 35 The Corporation of the Town of Aurora For the year ended December 31, 2007 -42- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee -Initial Conununication on Audit Planning 36 The Corporation of the Town of Aurora Pm' the year ended December 31, 2007 -43- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 37 The Corporation of the Town of Aurora For the year ended December 31, P007 -44- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee -Initial Communication on Audit Planning 38 The Corporation of tha, Town of Aurora For the year ended December 31, 2007 Appendix D — Audit requirements letter -45- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 39 The Corporation of the Town of Aurora For the year ended December 31, 2007 - The Town of Aurora - Audit Requirements List 'Date ". To be . Date December 31, 2007 required ' prepared received eos Pte provide the requested information in electronic format where possible. by b y Financial Statements and Trial Balance Final trial balance as at December 31, 2007 in Excel format with comparison budget to prior year amounts. ASAP Draft financial statements as at December 31, 2007 (including notes). Please At start of provide support for amounts in the notes, fieldwork Management Discussion and Analysis of all significant variances between current year actual figures and the prior year results, including explanations. Analysis of significant variances between current year actual results and budget figures. At start of fieldwork "Please perform analysis on a category by category basis (according to expenditures as disclosed on the Statement of Financial Activities) Lead sheets/grouping schedules to support financial statement figures and tie back to general ledger accounts (including comparative figures for the prior year At start of actual and current year budget). fieldwork A reconciliation of interfund transfers between Operating, Capital and Reserve At start of Fund Schedules of financial Statements. fieldwork A reconciliation of Council approved/published budget documents to budget At start of amounts shown on.the financial statements. fieldwork At start of Details of any major operational changes and related financial controls fieldwork Copies of any new policies and procedures implemented during the year or At Start of amendments made to existing policies and procedures, including Purchasing Fieldwork By-law. Cash/Bank Lead sheets as at December 31, 2007 with comparative prior year figures for all bank accounts plus petty cash. Lead sheets should include an explanation of At start of significant account variances from prior (greater than 10% of account balance or fieldwork $75,000). Bank reconciliation for all bank accounts as at December 31, 2007, with list of outstanding cheques, outstanding deposits and other reconciling items listed in At Start of detail. The outstanding cheque list should detail the cheque number, cheque date, Fieldwork payee and amount. -46- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 40 The Corporation of the Town of Aurora For the year ended December 31, 2007 The Town of Aurora - Audit Requirements List Date To be December 31, 2007 required 'prepared Date Please provide the requested infumaaaon in electronic format whom' oiAble b Y b Y. received At Start of Bank statements for the month of December 2007. Fieldwork At Start of Bank statements for the month of January 2008. - Fieldwork A listing of any cheques that were written in December 2007 that were not mailed until January 2008. (Note that these cheques should be reclassified to All? for At Start of Fieldwork financial statement purposes.) Schedule of transfers between bank accounts for the periods 10 days before and At Start of 10 days after. year-end indicating date of transfer, bank account #'s and amount. -Fieldwork Appropriate supporting documentation should also be provided. Copies of the most recent agreement(s) relating to current banking facilities. At Start of Fieldwork Investments and Interest Revenue Lead sheets as at December 31, 2007 with comparative prior year figures. Lead At start of sheets should include an explanation of significant account variances from prior fieldwork year (greater than 10% of account balance or $75,000). Investment continuity schedule for all investments held (for both the general and reserve accounts) in the year showing opening balances, purchases, redemptions, At Start of disposals and closing balances. Continuity schedule should include details of Fieldwork terms for each investment (interest rate, repayment terms, due date, market value, etc). Supporting documentation for purchases and disposables (if any). At start of fieldwork Reconcile investment interest/income earned- please include a schedule, detailing by month, the amount of interest received on the bank statements and include At Start of interest earned on investments. Tie in the total interest earned to the Fieldwork corresponding general ledger accounts and provide supporting documentation re: accrual at year end. Taxation- Receivable and Revenue Lead sheets as at December 31, 2007 with comparative prior year figures. Lead Sheets should include an explanation of significant account variances from prior At start of (greater than 10% of account balance or $75,000). fieldwork -47- SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee—Inilial Comm unicatlon on Audit Planning 41 The Corporation of the Town of Aurora For the year ended December 31, 2007 The Town of Aurora-- Audit Requirements List Date To be 'Date December h, 2007 required ;" prepared received Please provide rho requested information in electronic format where'pos9tble. by by Detailed aged taxes receivable listing (e.g. sub ledger) as at December 31, and reconciliation to the general ledger. Also, provide a copy of the Vadim report At Start of that agrees to the general ledger. At a minimum, this report should include, Fieldwork taxpayer name, roll number, assessment value, property location, year end account balance (include aging, if possible). A list of accounts receivable, by type, which are considered to be uncollectible and an analysis of all write-offs/refunds during the year. Also provide At Start of supporting documentation from ARB and any council extracts relating to Fieldwork approved write-offs. At Start of List of properties registered for tax sale. Fieldwork Reconcile "due to" and "due from" account pertaining to the Region and the At Start of School Boards and supporting documents Fieldwork At Start of Copy of MPAC Assessment Summary (both Commercial &Residential). Fieldwork Prepare the "Reconciliation of Assessment 2007 ,Final Tax Billings" schedule, At Start of reconciling total taxation revenue as recorded in the general ledger to the Fieldwork assessment roll. Copy of BY-LAW to Set and Levy the Rates of Taxation for the Year 2007. At Start of Fieldwork Summary of 2007 tax write offs and adjustments along with supporting General At Start of Committee Report. Fieldwork Reconciliation of tax write offs and adjustments to the G/L. At Start of Fieldwork Prepare a schedule / analysis of interest and penalties charged on taxes during At Start of the year (i.e. average balance overdue times interest rate = total interest revenue). The schedule should show the comparative figures for last year. Fieldwork Copy of By-law authorizing tax penalty and interest rates charged during the At Start of year. Fieldwork. Copy of York Region Regional tax Levy Bylaw for the applicable year, At Start of including any bylaws relating to capping adjustments. Fieldwork am SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee—Iniliat Communication on Audit Planning 42- The Corporation of the Town of Aurora For the year ended Decerber 31, 2007 The Town of Aurora = Audit Requirements List Date :' ' To be, Date December 31,2067, required :prepared- ` recelived _.' Please prandethe requested infatuationb in electronic format whdrepossible, y b y Record of Omit/Supplementary Taxation Levied in 2007- reconcile between the Town, Region of York and School Board. For the Town, tie amount into the At Start of G/L, and for the Region of York and School Board tie amount into their Fieldwork respective A/P or A/R. Print out from the OPTA website showing all ARB appeals (including At Start of assessment at risk) at December 31, 2007. ' Fieldwork Water and Sewer- Receivables and Revenue Lead sheets as at December 31, 2007 with comparative prior year figures. Lead sheets should include an explanation of significant account variances from prior At start of (greater than 10% of account balance or $75,000). fieldwork Aged accounts receivable listing in Excel format as at December 31, 2007. Also, At Start of provide reconciliation to the general ledger, as necessary. Fieldwork Schedule of any accounts considered to be uncollectible. At Start of Fieldwork Please provide the details of water and sewage receivables that are not billed until At Start of after year-end but pertain to the year under audit, if any. Provide calculations and Fieldwork supporting documents. ' The general ledger account details for water and sewer revenue' for December At Start of 2007 and January 2008. Fieldwork Provide the cash receipts journal (i.e. cashiers listing) for water & sewer for three At Startof days prior to year-end. - Fieldwork Prepare a schedule of monthly water & sewer revenue by commercial, residential, At Start of metered, flat rate and in monetary amounts, units or both (in cubic meters and $ Fieldwork billed). Provide a schedule of monthly charges for water & sewerage from York Region At Start of with copies of all water bills from York Region. Fieldwork Copy of by-law authorizing water and sewer service rate structure for the 2007 At Start of fiscal year. Please include a copy of the report presented to council. Fieldwork Leisure Services Receivables Provide a listing of the accounts receivables for leisure services and ensure that it At Start of agrees to the general ledger accounts. Fieldwork -49- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 43 The Corporation of the Town ni Aurora For the year ended December 31, 2007 The Town of Aurora — Audit Requirements List Date To be `' December 31, 2007 required prepared. bate received" ' PIpase provida the requested information in elmtrtinie format where possible. - by . bg Other Receivables Lead sheets as at December 31, 2007 with comparative prior year figures. Lead Sheets should include an explanation of significant account variances from prior At start of (greater than 10% of account balance or $75,000). - - fieldwork Provide a detailed listing of the general accounts receivable, which agrees to the At Start of general ledger. Fieldwork Prepare an analysis of the "other" accounts -receivable accounts indicating the At Start of change from the prior year and the status of the larger amounts, i.e. likelihood of Fieldwork their collectibility. At Start of Schedule of employee loans and advances and reconciliation to the G/L. Fieldwork Grants- Receivables and Revenue Lead sheets as at December 31, 2007 with comparative prior year figures, Lead Sheets should include an explanation of significant account variances from prior At start (greater than 10% of account balance or $75,000). fieldwork Letters or agreements from government agencies detailing grants to be provided At Start of and the amount of eligible funding. Fieldwork Grant continuity schedule indicating: general ledger account number, type of At Start of grant, receipt number and date, amount receivable as at December 31. Fieldwork Grant continuity schedule- please indicate on the continuity schedule which At Start of grants have been applied for, but not yet approved vs, grants approved. Include Fieldwork supporting documentation for all approved grants. Other Revenues Lead sheets as at December 31, 2007 with comparative prior year figures. Lead sheets should include an explanation of significant account variances from prior At start of (greater than 10% of account balance or $75,000). fieldwork Analysis of the following fees, relative to their costs: Also provide comparative At Start of prior year figures with explanations of significant account variances from prior Fieldwork year (greater than $75,000 or 10% of account balance). - At Start of - Planning fees Fieldwork -50- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Commillee —Initial Communication on Audit Planning 44 The Corporation of the Town of Aurora For the year ended December 31.. 2007 The Town of Aurora — Audit Requirements List Date To be, Date December 31,2007. �� required prepared 'received- Pieaseprovidetherequestedirifbrmaaotlinelectronrefarmatwhmpasatble,, .by , by , At Start of - Building fees Fieldwork At Start of - License fees Fieldwork At Start of Listing of any fixed assets or property sold, including sale of land. Fieldwork At Start of Listing of all revenues from developers by sub -division / units / lots etc. Fieldwork At Start of Schedule of rental income and related operating expense recoveries. Fieldwork Prepaids and Other Current Assets Lead sheets as at December 31, 2007 with comparative prior year figures, Lead At start of sheets should include an explanation of significant account variances from prior fieldwork than 10% of account balance or $75,000). —(greater A continuity schedule for prepaid showing opening balance, additions; amounts, At Start of expenses and closing balance. Expense per the continuity schedule should Fieldwork reconcile to the applicable general ledger account. At start of Details of items comprising balances. fieldwork Start of Reconciliation of `other" prepaid expenses or deposits. Feldwork Fieldwork Provide supporting documentation for the changes in "other current asset' At Start of accounts. Fieldwork Details of any land held for resale, including dispositions during the year, if any. At Start of Fieldwork Accounts Payable and Accrued Liabilities Lead sheets as at December 31, 2007 with comparative prior year figures. Lead At start of sheets should include an explanation of significant account variances from prior fieldwork (greater than 10% of account balance or $75,000). _ Detailed accounts payable listing by supplier and invoice number. Reconciliation At Start of of accounts payable listing to general ledger- please provide accounts payable sub Fieldwork ledger in electronic in electronic format, preferably formatted in Excel. -51- SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007, Report to the Audit Committee -Initial Communication on Audit Planning 45 The Corporation of the Town of Aurora For the year ended December 31, 2007 The Town of Aurora - Audit Requirements List' Date.` To be ; December 31, 2007 required ' prepared Date `- Pleoseprovide the requested lnfannad m electr`onia format where posaifile by I'llreceived by Supplier statements received indicating the supplier determined balance as at At Start of December 31, reconciled to the accounts payable trial balance Fieldwork At Start of Please make available the cheque register from year end date to date of audit. Fieldwork Schedules for all accrued liabilities and miscellaneous accounts payable at December 31 with comparative prior year figures. Also provide explanations of At Start of - significant account variances from prior year (greater than 10% or $75,000) (with Fieldwork copies of supporting documentation for significant items, including details of any calculations). Analysis of significant variance of accounts payable amounts from prior year. At Start of Fieldwork Listing of refundable deposits at December 31 with supporting documentation for At Start of significant balances. Analysis of significant variances from prior year. Fieldwork Detailed listing of work performance deposits outstanding at year end. List of At Start of _ contractor holdbacks by contractor, with supporting documentation. Fieldwork At Start of Analysis of short term debt and related interest expense. Fieldwork At Start of Analysis of deferred revenue accounts. Fieldwork Payroll- Liabilities and Expenses Lead sheets as at December 31, 2007 with comparative prior year figures. Lead sheets should include an explanation of significant account variances from prior At start (greater than 10% of account balance or $75,000). fieldwork Calculation of accrued payroll and accrued benefits as at year end with comparative prior year figures. Also provide explanations of significant account At Start of variances from prior year (greater than 10% or $75,000) (with copies of Fieldwork supporting documentation for significant items, including details of any calculations). Schedules for all payroll liabilities at December 31 with analysis of balances and At Start of reconciled to payments in 2007 where applicable. Fieldwork —52— SPECIAL GENERAL COMMITTEE AUDIT COMMITTEE NOVEMBER 27, 2007 Report to Iha Audit Committee—Iultial Comm unlCatlon on Audit Planning - 46 The Gorporalion of the Town of Aurora For the year ended December 31, 2007 The Town of Anrora =Audit Requirements List Date To be December 31, 2007 required prepti d : 'Date 'I Ireceived' -Please provide the requested hrfalinadonjnelechonmfamratwherepoedble, by- by Vacation accrual - electronic spreadsheet in Excel format detailing employee At Start of name, salary, vacation days outstanding Fieldwork Schedule of Lieu Time accrual showing management assumptions and At Start of calculations. - Fieldwork At Start of List of remuneration for Officers and Council members. Fieldwork Prepare a reconciliation of salaries and wages per T4 summary to general ledger. At Start of Fieldwork Reconciliation of employee benefits to application of benefits. At Start of Fieldwork Copy of the Actuarial valuation for the year ended December 31, 2006 and 2007, At Start of and access to the actuary to confirm independence and reliance upon work. Fieldwork Capital Fund Lead sheets as at December 31, 2007 with comparative prior year figures. Lead At Start of sheets should include an explanation of significant account variances from prior Fieldwork (greater than 1No of account balance or $75,000). Continuity schedule of capital projects for the year, agreed to general ledger At Start of accounts. - Fieldwork At Start of Documentation of significant variances from budget to actual. Fieldwork At Start of Capital carryover schedule, approved by Council Fieldwork Copy of reports to Council for any significant project overruns and availability of At Start of financing, if any. Fieldwork Reserves / Reserve Funds At Start of Fieldwork heets as at December 31, 2007 with comparative prior year figures. Leadshould Start of include an explanation of significant account variances from priorAt r Fieldwork r than 10% of account balance or $75,000). -53- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Corn m unicatl on on Audit Planning 47 The Corporation of the Town of Aurora For the year ended December 31, 2007 The Town of Aurora - Audit Requirements List Date To be December 31, 2007 required :prepared ` Date received Please provide the requested information in electronic format whore'possible by Continuity schedule of reserves and reserve funds. At Start of Fieldwork Analysis of significant variances in reserves and reserve funds in comparison to At Start of the prior year and to budget. Fieldwork Copy of Council approval of transfers between reserves / reserve funds. At Start of Fieldwork Provide supporting documentation detailing the activity within the funds. At Start of Fieldwork Copies of bylaws establishing new reserves / reserve funds in the year. At Start of Fieldwork Documentation for interest allocations to reserves / reserve funds (working paper At Start of of calculations, with support). - Fieldwork Copies of promissory notes and related Council approval for any loans outstanding At Start of at year end between the reserve fund and any other fund of the Municipality. Fieldwork Interfund debt continuity schedule as at December 31 and copies of any new debt At Start of bylaws summary amortization schedules. Fieldwork Debentures / Long term Debt Lead sheets as at December 31, 2007 with comparative prior year figures. Lead Sheets should include an explanation of significant account variances from prior Start of (greater than 10% of account balance or $75,000). Fieldwork F F Debenture continuity schedule as at December 31 and copies of any new debenture bylaws and any new bylaw summary amortization schedules. Also, At Start of include copy of council trnutes approving the by-law. Fieldwork At Start of Schedule of future principal and interest payments on existing debt. Fieldwork Documentation on any debt issued during the year and amendments to existing At Start of loan agreements, if any. Fieldwork Copy of by-law authorizing borrowing limit for the current year. - At Start of Fieldwork -54- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 48 The Corporation of the Town of Aurora For the year ended December 31, 2007 The Tawn of.Aurora —°Audit Requirements List Date To be December 31,2007 required prepared-", .Date received Please provide the requested information in electmnic format whCre possible. by by Copy of Annual Debt Repayment Limit At Start of - Fieldwork Bylaws authorizing any new local improvement charges during the year. At Start of Fieldwork Reconciliation of debenture debt charges for the year to the related general ledger At Start of accounts. Explanation of significant variances from budgeted amounts. Fieldwork Calculation of accrued interest charges, reconciled to the general ledger and At Start of financial statements. Fieldwork Commodity taxes Provide a copy of all GST returns filed during the year. At Start of Fieldwork Prepare an analysis of the balance in the GST accounts reconciled to the amount At Start of reported on the GST return as at year end. Fieldwork Analysis of the balance in. PST accounts reconciled to a copy of the PST filing At Start of as at December 31. Fieldwork Cut-off information At Start of Cheque number of last cheque issued during fiscal 2007 for all bank accounts - Fieldwork At Start ofFieldwork Cheque number of firs[ cheque issued during fiscal 2008 for all bank accounts At Start of Provide the last sales invoice number for Water & Sewer for fiscal 2007 Fieldwork At Start ofFieldwork Provide the first sales invoice number for Water &Sewer for fiscal 2008 Other Matters - At Start of Access to all executive minutes and bylaws Fieldwork Assistance with the preparation of lawyers letters, including list of all lawyers At Start of utilized during the year. Fieldwork -55- SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 Report to the Audit Committee —Initial Communication on Audit Planning 49 The Corporation of the Town of Aurora For the year ended Decerahei 31, 2007 The Town of Aurora — Audit Requirements List bate'. ` To be ' December 31, 2007 required !prepared; Date' received:; Please provide dic requested intonation is eleci rank format wberepoestble, r , - by by. Copy of Council extract for any amendments made to the already approved At Start of Budget, if applicable - Fieldwork Details of Town's insurance coverage (copy of insurance policy), - At Start of Fieldwork Copy of insurance claims tracking worksheet, detailing list of claims filed, claims At Start of processed through OMEX and status of the claims, Fieldwork Copies of amendments to agreements, if any — ex. Central York Fire Services. At Start of Also, re: CYFS include supporting worksheet on allocation of revenues and Fieldwork expenses between the Town of Aurora and the Town of Newmarket. Schedule of all professional fees paid during the year, including date, vendor, At Start of amounts, and description of services rendered. Please reconcile to accruals where Fieldwork appropriate, Federal Gas Tax Copy of Expenditure report to the AMID. _ At Start of Fieldwork Copy of all Schedule C's issued during the year. At Start of Fieldwork Copies of all insurance certificates issued in respect of the projects related to the At Start of Federal Gas Tax. Fieldwork Listing of all expenditures made during the year in respect of Federal Gas Tax At Start of funded projects. Fieldwork Details of all revenue received from the AMO in respect of the Gas Tax. At Start of Fieldwork Calculation of the interest added to the Gas Tax Reserve fund during the year. At Start of Fieldwork _ Continuity schedule of the Gas Tax Reserve fund, tied to the expenditures and At Start of revenue provided above. Fieldwork —56— SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 AGENDA ITEM # �3 TOWN OF AURORA AURORA Audit COMMITTEE No.FS07-053 SUBJECT: Agreement with Region of York for Internal Audit Services FROM: L. John Gutteridge, Director of Finance / Treasurer DATE: November 27, 2001 RECOMMENDATIONS THAT the Mayor and Clerk be authorized to sign the Memorandum of Understanding with the Region of York for Internal Audit Services. BACKGROUND In the 2005 the Town of Aurora entered into a joint memorandum of understanding with the Town of Newmarket, the Township of East Gwillimbury, the Township of Georgina and the Region of York for the Region to provide internal audit services. At the time of negotiating the memorandum with the Region it was the intent to have the Northern 6 municipalities participate. In 2008 the other two municipality's the Town of Whitchurch Stouffville and the Township of King have now agreed to participate. COMMENTS As a result of the new municipalities participating it has been necessary to develop a new memorandum of understanding and to rework the cost sharing formula, a copy of which are attached hereto as Attachment #1 and Attachment #2. To date we have found the services of the internal auditor to be very beneficial as it brings and independent eye to the Town's operations and it allows us to share best practices of the participating municipalities. OPTIONS 1. That the Mayor and Clerk be authorized to sign an memorandum of understanding with the Region of York and the six northern municipality's for the provision of internal auditing services: 2. That the Town of Aurora terminate our participation in this program. FINANCIAL IMPLICATIONS Attachment #2 shows the cost sharing arrangements for this memorandum and the -57- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 November 27, 2007 - 2 - Report No. FS07-053 participating municipalities. For the first two years of this memorandum our costs were $39,049. per year and with the new agreement they drop to $31,413. These cost have been incorporated in the 2008 budget. CONCLUSIONS We feel the program has been beheficial and the service provided to be excellent and would recommend that we continue to participate in this memorandum. LINK TO STRATEGIC PLAN Goal D: Ensure transparent, accountable and open governance in concert with informed and involved citizens Objective D1: Continue the commitment of fiscal responsibility and accountability Objective D3: Be accountable and transparent to residents by ensuring open and accessible information flow and accessible decision -making . ATTACHMENTS Attachment #1 — Memorandum of Understanding between the Region of York and the Northern Six Municipalities. Attachment #2 -- Cost sharing formula.: PRE -SUBMISSION REVIEW Management Team Review — Wednesday, November 20, 2007 Prepared by- L. John Gutteridge, Director of Finance/Treasurer -Ext. #4111 Jon utteridge hn S. Rogers — Director of Finance/Treasurer Chief Administrative Officer 121-C SPECIAL GENERAL COMMITTEE — AUDIT COMMITTEE NOVEMBER 27, 2007 ATTACHMENT #1 THIS MEMORANDUM OF UNDERSTANDING made this day of BETWEEN: THE REGIONAL MUNICIPALITY OF YORK (the "Region") -and- THE CORPORATION OF THE TOWN OF AURORA (the "Town of Aurora") -and- THE CORPORATION OF THE TOWN OF EAST GWILLIMBURY (the "Town of East Gwillimbury") -and- THE CORPORATION OF THE TOWN OF GEORGINA (the "Town of Georgina") -and- THE CORPORATION OF THE TOWNSHIP OF KING (the "Township of Ding") - and - THE CORPORATION OF THE TOWN OF NEWMARKET (the "Town of Newmarket') -and- THE CORPORATION OF THE TOWN OF WHITCHURCH-STOUFFVILLE (the "Town of Whitchurch-Stouffville") 1. Purpose 1.1 The purpose of this Memorandum of Understanding is to establish and implement an arrangement to facilitate the provision of Internal Audit Services to local municipalities in The Regional Municipality of York, 432315 —59— SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 -2- 2. Definitions 2.1 In this Memorandum of Understanding, the following definitions shall apply: (a) "Audit Group" means those local municipalities who are parties to this Memorandum of Understanding; (b) "Audit Vendor Listing" means the listing of qualified auditors administered by the Region's Director, Audit Services; (c) "Auditor" means a person holding the qualifications set out in Section 8 of this MOU; (d) "Internal Audit Services" means the services of an Auditor provided to a Member by the Region pursuant to this MOU: (e) "Member" means a local municipality which is a member of the Audit Group; and (f) "MOU" means this Memorandum of Understanding, as amended from time to time. 3. Scope of Services 3.1 The Internal Audit Services provided pursuant to this MOU shall include the following: (a) Operational Audit: An audit of a Member's resource utilization and accomplishment of operational goals. (b) Compliance Audit: An audit of a Member's adherence to legislative and regulatory requirements. (c) Risk Audit: An audit to determine the risk of fraud that may occur in a Member's organization. (d) Performance Management Audit: An audit to evaluate a Member's effectiveness, economy and efficient use of resources. (e) General Services: Consultation and advice on the internal audit function such as assistance in developing and updating policies and best practices. 4. Term 4.1 This MOU shall be effective on November 1, 2007, or such other date as mutually agreed between the parties, and shall be in force for a term of one year, with an option to renew for a further term of one year. 5. Roles and Responsibilities 5.1 The Region shall retain an Auditor to deliver the Internal Audit Services on such terms as are mutually agreed upon between the Region and the Auditor. 432315 01-11112 SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 -3- 5.2. The Region shall be responsible directly to the Auditor for the payment of any compensation or benefits. 5.3 The Region shall also provide the services of the Region's Director, Audit Services for a maximum of 200 hours per annum. The Director, Audit Services, shall undertake such tasks under this agreement as may be appropriate from time to time. 5.4 In order to facilitate the provision of Internal Audit Services, each Member shall be responsible during each audit as follows: (a) to assist in the development of an audit plan as a framework for the delivery of Internal Audit Services; (b) to assist in an analysis of the need for Internal Audit Services and to establish the Member's priorities for such services; (c) to provide to the Auditor all written policies and procedures applicable to the audit including reporting relationships for each project; (d) to provide an appropriate work area for the conduct of the Internal Audit Services, including a work area and supplies during the duration of the audit; (e) to provide to the Auditor all documentation applicable to the audit; and (f) to ensure that the Auditor has access to and the co-operation of the appropriate staff in order to conduct the audit. 6. Schedule of Services 6.1 Through the services of a consultant, or the Internal Auditor, each Member will perform a "baseline" risk assessment which will be used as the basis for the development of the service requirements for Internal Audit Services for that Member or for any other Member on request. 6.2 The Region shall schedule the delivery of Internal Audit Services in consultation with each Member and shall use its best efforts to accommodate each Member's requirements. Provided, however, that the Director, Audit Services reserves the right to schedule assignments as he or she considers appropriate. 6.3 In the event that a Member requires additional Internal Audit Services that cannot be accommodated in the schedule, the Region shall provide such services through its Audit Vendor Listing and the Member shall reimburse the Region in full for the actual cost incurred for the provision of such services. 7. Cost of Services 7.1 The parties acknowledge that the Region will deliver Internal Audit Services based on full cost recovery and an estimated number of hours. The total estimated cost of providing the Internal Audit Services is approximately $133,000.00. It is mutually agreed that the upset limit for the Internal Audit Services shall be $150,000 and that this 432315 -61- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 -4- amount shall not be exceeded without the written approval of all members of the Audit Group. Accordingly, the pro -rated hourly rate chargeable to each Member shall be approximately $98.20, subject to adjustments when the actual cost is determined by the Region. 7.2 In addition to the payment of an hourly rate, each Member shall reimburse the Region for any disbursements incurred during each audit, including mileage expenses, in accordance with Regional policy. 7.3 The Region may choose to purchase any available spare time of the Auditor with the agreement of the Audit Group for the agreed hourly rate. 8. Deliverables 8.1 Upon completion of each audit, the Auditor shall deliver to the Member an audit report in a form agreed upon between the Auditor and the Member. 9. Qualifications of Auditor 9.1 The Internal Audit Services shall be delivered by an Auditor, who at a minimum, shall have one of the following designations or equivalent: (a) Chartered Accountant (C.A.); (b) Certified General Accountant (C.G.A.); (c) Certified Management Accountant (C.M.A.); (d) Certified Internal Auditor (C.I.A.); or such other designation appropriate to the services as determined by the Director, Audit Services. 9.2 The Region shall ensure that the Auditor shall be available for occasional evening or weekend meetings without overtime compensation. 10. Payment 10.1 It is the intent of this MOU that the Members reimburse the Region for the full cost recovery of Internal Audit Services, based on their proportionate share of such services. 10.2 On completion of each audit, the Region shall submit to the Member an invoice setting out the amount payable for the audit, based on the hourly rate set out in Section 7 and shall set out in detail any expenses or disbursements incurred. 10.3 The Member shall pay each invoice submitted within sixty (60) days of receipt. 10.4 The base fortnula for cost sharing by the Audit Group for this service shall be based on the average of population, households and Schedule 40 of the Financial Information Report. The Audit Group members may agree to share their time with each other such 432315 -62- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 that Group members receive time in a budget year in addition to the time allotted by the base formula. II. Conflict of Interest 11.1 The parties acknowledge that a conflict of interest may arise in the provision of Internal Audit Services. In the event that a conflict of interest is identified, the Director, Audit Services shall consult with the Member and determine the appropriate means of conducting the audit and may require that the audit be conducted by an independent auditor retained from the Region's Audit Vendor Listing, in accordance with Section 6.3 of this MOU. 11.2 A confidentiality agreement will be entered into with the Internal Auditor and the Director, Audit Services. 12. General Provisions 12.1 This MOU shall enure to the benefit of and be binding upon the parties and their respective successors, administrators and assigns. 12.2 If any provision or part of any provision in this MOU is rendered null and void, it shall be severed without affecting the validity of the remaining provisions of the MOU. 123 This MOU shall be governed by the laws of the Province of Ontario. 12.4 This MOU may be amended only upon the written agreement of the parties or their respective successors or permitted assigns and any such amendments require the consent of all parties. 432315 IN WITNESS WHEREOF the parties have caused this Memorandum of Understanding to be executed. THE REGIONAL MUNICIPALITY OF YORK name: title: name: title: THE CORPORATION OF THE TOWN OF AURORA name: title: name: title: -63- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 432315 THE CORPORATION OF THE TOWN OF EAST GWILLIM13URY name: title: name: title: THE CORPORATION OF THE TOWN OF GEORGINA name: title: name: title: THE CORPORATION OF THE TOWNSHIP OF KING name: title: name: title: THE CORPORATION OF THE TOWN OF NEWMARKET name: title: name: title: THE CORPORATION OF THE TOWN OF WHITCHURCH-STOUFFVILLE name: title: name: title: -64- SPECIAL GENERAL COMMITTEE- AUDIT COMMITTEE NOVEMBER 27, 2007 G m lO aa O M M mV} N N O c V M o e V d N O •Q• N �fmt n O M w � N y fH � •- •- •Q N cr" N N O O N O N NM ,Nm" N y N 0 e e se e a v o 0 o e "O O M V N O m M OR t( 'V N O 4% ID O M O O O OD CD OC N � O �- N �" N V O N �-• M e O p � o N � Q •j, o e a o e o o o o N M O O N D m m 0 0 10 O}} n O O N n g VI O M f0 M �p 0D M N V W N •M" N O OM M N N O N� " o n" m n M't�oa,o ao n N W Q y m 10 O N N W N 7O O p W N N O �O F V N 00 yy N O N m N Ip O N N O V V N Iq O M N N W O M N n N N W •4A N n N N � O en- m t � = C i6 e s e o 0 0 o e o 0 o e N r a n oclm H Tp Iq o O N m O O y.. Q N N C M c 0 L Q. C N M N O M N M N m ,O. V �m W A O N m n O M N N N m C •y BOO m N w m m m N m O m 0 n V N V n m e N v N n N N L G N 0 a° N N � U m 3 Y C1 •_ 1�6 (� •�E y NU' •rn E U m Q y o; A y 0 Cl 3 t N ¢'wcDz F° ¢'wcDtz r° -65- SPECIAL GENERAL COMMITTEE - AUDIT COMMITTEE NOVEMBER 27, 2007 Ll AURORA _v_.. - -- yowreiF goodroWPAV Office of the Chief MEMORANDUM Administrative Officer Administration Date: November 22, 2007 To: Audit Committee From: John S. Rogers Re: Northern 6 Internal Audit Best Practices The Northern 6 CAO's met on October the 30th with the Region of York internal auditors to discuss the internal audit program that has been underway in 4 of the 6 municipalities for the past 2 years. At the meeting there was a discussion of some of the best practices in the 4 municipalities that have had internal audits conducted. In the Leisure Services field Newmarket has developed a pay per use system utilizing the CLASS system for registrations and in Georgina the Town has developed a capital works construction sheet and a contract execution procedure that the internal auditors deemed to be best practices. The Town of Aurora will be investigating both of these best practices to determine if they can be incorporated in the Town of Aurora. The internal auditors also advised the meeting that the Town of Aurora had developed a series of manuals in its Aquatics division that were noted as best practices. The internal auditors also stated that the Town of Aurora accounts payable and procurement checklist were a best practice as well and recommended that other municipalities utilize similar systems. The staff in both the Aquatics division and the Finance Department should be congratulated for being recognized as developing best practices in the municipal field. John S. Rogers Chief Administrative Officer