This report responds to a request from the Audit Committee to “provide the value added of his department by identifying:
a. actual dollar savings to the City;
b. potential savings to the City of Toronto;
c. at risk dollars to the City of Toronto; and
d. for non-identifiable dollar activities, the impact of the audit review on those items.”
At the request of the Audit Committee, attempts have been made to identify the extent of the quantifiable financial benefits which have resulted from the work conducted by the Auditor General’s Office.
While certain reports have resulted in tangible cost savings, the more important benefits provided relate to the avoidance of future costs, as well as the protection of City assets. Nevertheless, tangible annual cost savings have occurred, or will occur, as a result of the work conducted by the Auditor General. Over the five year period commencing January 1, 2003 the estimated potential savings to the City are in the range of $82 million compared to a cumulative audit expenditure of $15 million. In simple terms, for every $1 invested in the audit process the return on this investment has been $5.50. Many of the estimated cost savings are ongoing and occur on an annual basis.