The Auditor General’s Work Plan included the development of a system of continuous controls monitoring for selected City expenses. The objective of the Continuous Controls Monitoring Program is to provide periodic reports to management which assist in proactively monitoring financial transactions, detecting unusual expenses and identifying areas where internal controls could be strengthened.
The Auditor General initiated the Continuous Controls Monitoring Program in early 2011. Initial expenses selected for the application of continuous controls monitoring were employee overtime and mileage reimbursements. Standby Pay was recently added to the “dashboard” of expenses monitored under the program.
The Auditor General’s Continuous Controls Monitoring Program was initiated with an intent to expand it to include City Agencies and Corporations. In July 2012, at the request of the Toronto Transit Commission (TTC), the Auditor General provided reports to the TTC Audit Committee on staff overtime, standby pay, mileage reimbursements and meal allowance payments.
Since the initiation of this project in 2011, there has been a consistent decrease in overtime and mileage expenses. Management indicates that City divisions are monitoring overtime, standby pay and mileage reimbursements on an ongoing basis as part of an effort to reduce operating budgets.
Based on our analysis of January to June 2012 overtime expenses, 2012 annual overtime expenses will likely be in the range of $36 million. This is a reduction of $5 million from 2011 levels.
Similarly, based on our analysis of mileage reimbursements for the first six months of 2012, annual mileage reimbursements are projected to be approximately $3.5 million which is $400,000 less than 2011 levels.