TAMRMS#: B06
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Bylaw 25/2016 - Internal Auditor and Internal Audit Committee Bylaw
Presented by: Gene Klenke, City Solicitor
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RECOMMENDATION(S)
recommendation
1. That Bylaw 25/2016, as amended, be read a second time.
2. That Bylaw 25/2016, as amended, be read a third and final time.
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PURPOSE OF REPORT
To present the Internal Auditor and Internal Audit Committee Bylaw, as amended in accordance with Council feedback, to Council for further consideration.
Council Direction
On October 24, 2016, Council passed the following resolutions:
(AR-16-044)
That Bylaw 25/2016, the Program Auditor and Program Audit Committee Bylaw, be read a first time.
(AR-16-044)
That members of Council provide the City Manager with feedback on proposed Bylaw 25/2016 by November 10, 2016.
(AR-16-044)
That Bylaw 25/2016, the Program Auditor and Program Audit Committee Bylaw, be considered for further readings on January 23, 2017.
Background and Discussion
Further to consideration of feedback received from individual Council members, the proposed Bylaw 25/2016 has been amended since 1st reading and is now presented for further consideration. In summary, the amendments are as follows:
• the Bylaw and associated position have been renamed, respectively, to “Internal Auditor and Internal Audit Committee Bylaw” and “Internal Auditor”;
• the position may review proposed City services or functions (in addition to existing functions);
• the position reports directly to Council rather than to the Committee;
• the Committee functions only in the context that an internal auditor is, or will, be appointed;
• public members have been removed from the Committee;
• minor clerical changes have been made.
A change has also been made authorizing the City Manager to request of Council that the scope of the Internal Auditor’s work be adjusted from time to time to include specific items of interest as they may arise.
For various reasons, certain amendments proposed by Council members have not been included in the changes, including:
• that the reference to a written agreement under section 8 be deleted. This agreement is the basis of the retainer between the City and the internal auditor, who will be required to execute a professional services contract in a similar manner as other contractors / consultants. The contract will detail the scope and expected deliverables.
• that the Bylaw include a mandatory responsibility on the part of Council to appoint an internal auditor. As drafted, the Bylaw affords Council the discretion to appoint pursuant to an internal audit program and for budgetary or other reasons, Council may choose not to re-appoint once a contract term has lapsed. However, if the appointment is mandatory, Council would have to repeal the Bylaw to eliminate the obligation.
• that the position be a “chartered professional accountant”. Administration submits that an professional accounting qualifications and experience may be an asset, but may not be critical for the role, which as is understood, is not focused exclusively on financial considerations. In any event, section 11 requires that the internal auditor follow generally accepted standards for the professional practice of audits.
• that Council, rather than the Committee, develop the workplan. Council sets the general scope and mandate for the position, including the items to be reviewed. The Committee is intended to take some of the work off Council’s hands. Developing and approving a workplan that accords with the defined scope and mandate is an appropriate delegation of resources and in Administration’s opinion, does not compromise the independence of the position.
• that the provisions of the Bylaw that speak to access to information and FOIPP be redrafted. The Bylaw indicates that the City Manager will provide information necessary to facilitate the position, however will do so only in a manner that does not conflict with the City Manager’s role as articulated by policy, bylaw or legislation, including his role as the Head of FOIPP. The Bylaw also indicates that the position will respect and comply with City’s and City Manager’s obligation to administer the FOIPP Act. Administration believes that this language is appropriate.
• That the term “Committee” be changed to “Task Force”. A committee of Council (to use the term in a consistent manner with the Municipal Government Act) is established by bylaw to perform tasks delegated by Council, including any required decision making role, for a defined term or as a standing body. In contrast, a “task force” is not typically established by bylaw. It is understood that this suggested change is intended to connote the temporary or non-mandatory nature of the appointment, however as noted above, the appointment of the position remains discretionary by use of the words “may appoint” within Section 4 of the Bylaw. The term of any such appointment would be reflected in the applicable professional services contract and Section 19 has been altered to indicate that the Committee functions only in the context that an internal auditor is or will be appointed.
Stakeholder Communications or Engagement
N/A
Implications of Recommendation(s)
a) Financial:
• As part of the 2016 approved budget, a 2-year Business Case in the amount of $125,000 per year supplemented by an additional $75,000 through PM96-2016 for a total of $325,000 was approved to fund a resource to provide the citizens of St. Albert with an independent review of the City's services and programs. This approved Business Case is intended to provide City Council with an independent review of the City’s services and programs and report directly to City Council.
b) Legal / Risk:
• Legal Services drafted the proposed Bylaw and this Report. There are no further legal implications of note regarding the recommendations.
c) Program or Service:
• The work of the “internal auditor” would provide Council and the corporation with insights regarding where and how improvements or efficiencies in programs and services could be achieved. There will be impacts on departments involved in any selected reviews. Staff time spent gathering information and discussions with the internal auditor have the potential to be significant.
d) Organizational:
• None at this time.
Alternatives and Implications Considered
If Council does not wish to support the recommendations, Council could direct that Administration bring forward specific alternate amendments to the Bylaw.
Strategic Connections
a) City of St. Albert Strategic Plan (Policy C-CG-02)
Governance Strategy - Council is committed to ensuring that the City of St. Albert is a responsive, accountable government that delivers value to the community.
Service Delivery Strategy - Council is committed to ensuring that the City of St. Albert is engaging residents to identify opportunities to improve delivery of services to the community.
b) Long Term Plans (e.g. MDP, Social Master Plan, Cultural Master Plan, etc.)
• N/A
c) Corporate Objectives (See Corporate Business Plan)
• Exercise strong fiscal management
d) Council Policies, Bylaws or Federal/Provincial statutes
• As noted above
e) Other Plans or Initiatives (Business Plans, Implementation Strategies, etc.)
• N/A
Report Date: January 23, 2017
Author(s): Gene Klenke, City Solicitor
Committee/Department: City Manager’s Office
General Manager: n/a
City Manager: Kevin Scoble