Corporate Affairs and Audit Committee (CAAC) Meeting - March 30, 2012

Public Agenda

Chair’s Poll re: Conflict of Interest

Confirmation of Corporate Affairs Committee Public Minutes –  January 27, 2012

Business Arising from the Minutes and Action Item List

Approval of Agenda and Review of Agenda Order

Review of Agenda (all items not held will be voted together without discussion)

For Approval:

1 – Q4 2011 Quarterly Performance and Progress Reports

2 – Referral Motion re: Review of Material Contracts

3 – Internal Audit: 2012 Budget and Revised 2012 Work Plan

4 – Internal Audit and Investigations:  Frequency of Standing Reports to the Committee

For Information:

5 – PricewaterhouseCoopers LLP – External Audit Work Planning: Year Ended December 31, 2011

6 – Interim Quarterly Comprehensive, Consolidated Financial Statements (verbal report)

7 – 2012 Operating Plan (verbal update)

8 – Toronto Community Housing Financial Performance Report – Q4 2011

9 – Review of Board, CEO and Senior Management  Expenses – Q4 2011

10 – Implementation of Auditor General Procurement and Employee Expense Recommendations: Status Report

11 – Implementation of Auditor General’s Fleet Recommendations: Status Report

12 – Implementation of Auditor General’s HSI Procurement  Recommendations: Status Report

13 – Implementation of Auditor General TCH Subsidiary Recommendations: Status Report

14 – Toronto Community Housing Subsidiaries

In Camera

(A) Confirmation of Corporate Affairs and Audit Committee In Camera Minutes

• January 27, 2012 and February 10, 2012

Business Arising from the In Camera Minutes and Action Item List

For Information:

(B) Confidential item respecting the business of the corporation

(C) Confidential item respecting the business of the corporation

(D) Confidential item respecting the business of the corporation

(E) Confidential item respecting the business of the corporation

Public Minutes

The Corporate Affairs and Audit Committee of Toronto Community Housing Corporation met on March 30, 2012, in the Main Floor Conference Room, 931 Yonge Street, commencing at 9:02 a.m.

Committee Directors present:

Jason Gorel, Chair

Brian Kwan

Councillor John Parker

Regrets:

none

Additional Directors present:

Ms. Catherine Wilkinson

Mr. Christian Buhagiar, Chair of the Governance, Risk and Human Resources Committee

Also present:

Marta Asturi, Assistant Corporate Secretary and Legal Counsel

Mary Boushel, Legal Counsel

Paul Chisholm, General Manager, Access Housing Connections Inc.

Steve Floros, Community Housing Director - Central

Michelle Haney-Kileeg, General Manager

Ismail Ibrahim, Legal Counsel

Len Koroneos, Chief Executive Officer (Interim)

Hugh Lawson, Director - Strategic Planning & Stakeholder Relations

Janice Lewkoski, Board Secretary

Roman Mesec, Senior Director of Strategic Procurement

Ahmed Samater, Director Finance – Asset Investment Planning

Deborah Simon, Chief Operating Officer

Michael Vear, Chief Internal Auditor

Mr. Jason Gorel, the Chair, called the meeting to order and Ms. Mirela Bolentiru served as recording secretary.

Declaration of Conflict of Interest

The Chair requested members of the Corporate Affairs and Audit Committee to indicate any agenda item in which they had a conflict of interest, together with the nature of the interest. None were declared.

Deputations

The Committee Chair polled for any deputations to be heard at the meeting and explained the deputation process. He noted that one deputant wished to provide a verbal deputation on agenda item “Business Arising from the Minutes and Action Item List”.

Confirmation of Agenda

Motion carried

ON MOTION DULY MADE by Councillor John Parker, seconded by Mr. Brian Kwan, the Corporate Affairs and Audit Committee unanimously approved the agenda as presented.

Minutes – Confirmation of Corporate Affairs and Audit Committee Minutes: January 27, 2012

The Committee had before it the draft Corporate Affairs and Audit Committee minutes for the January 27, 2012 public meeting.

Motion carried

ON MOTION DULY MADE by Mr. Jason Gorel, seconded by Mr. Brian Kwan, the Corporate Affairs and Audit Committee confirmed the above-captioned minutes and recommended they be forwarded to the Board of Directors for information.

Business Arising from the Minutes and Action Item List

Dan King provided a verbal deputation in relation to the agenda item “Business Arising from the Minutes and Action Item List”.

The Committee Chair recommended that the LeSage report and recommendations be re-delegated to the Tenant and Community Services Committee, which better aligns with that Committee’s Terms of Reference and has direct impact on the tenants and communities.

The Committee Chair further recommended that management submit a report on vacancy as a follow up with an action item mentioned in the September 29, 2011 minutes (Report: CAAC:2011-01).

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Councillor John Parker, the Corporate Affairs and Audit Committee unanimously approved the rolling Action Item List with the following recommendation:

• The Committee Chair recommended that the Committee provide guidance to management to consider, at future meetings, the issuance of the rolling Action Item List in a more concise format.

Item 1 – Q4 2011 Quarterly Performance and Progress Reports, CAAC:2012-10

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-10) from the Interim Chief Executive Officer.

The Committee discussed the Net Operating Income Before Debt performance measure concurrently with the financial results, noting that the numbers did not match. Mr. Len Koroneos explained to the Committee that while the performance measure shows the Net Operating Income budgeted for the fiscal year (before debts) versus actuals and variance, excluding investments and debts (such as mortgages and loans), the financial results include debts. The net operating income was higher than budget by 6.5% in 2011 due to higher revenues, lower manageable costs, lower insurance, property taxes and waste removal costs.

The Committee raised a question with respect to whether there is a matrix of utilities, showing the variances in volume / rate for each component. In response, Mr. Len Koroneos informed the Committee that there is a matrix showing negative variances of hydro and positive variances of gas and water. Overall savings are added back into utilities through the energy saving programs (better on volume using less). The energy saving programs are subject to financing charges that are being paid within a 7-year payback term.

For a better, easier understanding and matching results, the Committee recommended a breakdown of utilities into hydro, gas and water in the financial results, to mirror the quarterly performance report. Staff will provide the Committee with a chart of utilities.

Councillor John Parker left the meeting at 9:15 a.m.

In response to a question raised by the Committee with respect to vacancy loss, Mr. Steve Floros explained to the Committee that non-rentable units (such as units on hold, under refurbishment, long-term vacant, held for Regent Park relocations, and 200 Wellesley Street East) are not included in the vacancy loss calculations. Some other units that are at a stage beyond repair were also excluded from the vacancy loss calculations.

Ms. Catherine Wilkinson raised a question with respect to the difference between the total number of units on hold and the number of units on hold for Regent Park, recommending a breakdown of numbers and reporting on this matter on a regular basis.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the reports and recommended to forward the reports with performance measures that are below target to the Board of Directors for information.

Item 2 – Referral Motion Re: Review of Material Contracts, CAAC:2012-11

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-11) from the Board of Directors.

The Committee Chair recommended that the Committee provide Mr. Michael Vear, Chief Internal Auditor, with approval for latitude to review all major contracts awarded by the Corporation and its subsidiary companies since 2008. Mr. Michael Vear will review and propose a materiality threshold to this Committee for its consideration.

In response to a question raised with respect to whether or not any conflicts of interest will be analyzed during the internal audit, the Committee Chair recommended that the review include an analysis of whether such contracts involve any conflicts of interest.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously moved the motion from the Board of Directors meeting held on February 23, 2012 and:

1. requested the Internal Auditor to review all major contracts awarded by Toronto Community Housing and its subsidiary companies in order to determine that contracts were awarded appropriately;
   1. the review to include an analysis of whether or not such contracts involve any conflicts of interest;
   2. the review to include material contracts since 2008; and
   3. the materiality of contracts be delegated to the Corporate Affairs and Audit Committee (CAAC) to determine and report back to the Board.

Item 3 – Internal Audit: 2012 Budget and Revised 2012 Work Plan, CAAC:2012-12

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-12) from the Chief Internal Auditor.

The Committee Chair noted that the work plan is a dynamic document and it is important that the Committee understand the work plan may be subject to ongoing changes. Mr. Michael Vear will provide the Committee with an updated status of the work plan at every meeting, highlighting the changes from the previous version.

The Committee Chair recommended that the Richter Report and ERM Report (by KPMG) should be included in the Internal Audit Work Plan.

Mr. Christian Buhagiar commented with respect to item 17 of the revised 2012 Internal Audit Work Plan: TCH risk assessment. He noted a possible overlap between the two committees: Governance, Risk and Human Resources that oversees the ERM Report (this is the rationale for not being factored into the 2012 Internal Audit Work Plan), and the Corporate Affairs and Audit Committee that oversees the Richter Report.

In response to a question raised by the Committee Chair with respect to whether the Internal Audit Work Plan contains management’s input, Mr. Michael Vear informed the Committee that he has been working with management and the work plan reflects management’s assessment of various aspects and processes.

The Committee Chair noted that management implemented the internal controls and he wanted to obtain assurance as to whether the assessment of the Auditor General’s office in January or February 2013 with respect to his recommendations will be favourable. The Committee Chair recommended a pre-assessment of the status of the implementation of recommendations before the Auditor General’s review in 2013.

The Committee Chair noted that the Chief Internal Auditor’s role is to monitor management’s implementation of the recommendations made by the Auditor General. If there are any issues in the Auditor General’s reports received, the Committee will ask management to resolve them and then to report back to the Committee.

Mr. Christian Buhagiar raised a question with respect to item 25 of the 2012 Internal Audit revised Work Plan asking for clarification between the role of the Internal Auditor’s office and External Auditor. In response, Mr. Michael Vear informed the Committee that while there is no professional relationship at this time between the External and Internal Auditor’s offices, there may be a connection in the next three years down the road. In response to a question from the Committee with respect to the new Internal Audit team and tight deadlines, Mr. Michael Vear informed the Committee that there will always be some caution in the work plan as some items might take longer than expected to address. In addition, there could be unexpected items arising that have to be also addressed.

Ms. Catherine Wilkinson noted that in relation to item 11 of the work plan, more information needs to be provided about the directors and officers of the subsidiaries. This Committee should be looking at the expenses of those boards, as well. In response, the Committee Chair recommended that the boards’ expenses for the subsidiaries be factored into the Internal Audit Work Plan. Mr. Michael Vear noted that while “unusual transactions” is a broad term, the Internal Auditor’s office will take into consideration Ms. Catherine Wilkinson’s comment.

There was a discussion about 2012 Internal Audit budget versus the 2011 budget. Mr. Len Koroneos explained to the Committee that the 2012 budget for the Internal Audit and Investigations department of $672,259 is $140,000 higher than the 2011 budget and it is not included in the Interim Operating Plan. The increase in the budget is due to staff vacancies in 2011, which will be filled in 2012, and an additional two investigators to the new team to investigate complaints received on the fraud and waste hotline.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously adopted the report and resolved to approve the 2012 Internal Audit Budget and Revised 2012 Internal Audit Work Plan.

Item 4 – Internal Audit and Investigations: Frequency of Standing Reports to the Committee, CAAC:2012-13

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-13) from the Chief Internal Auditor.

Mr. Michel Vear introduced the report, presenting a synopsis of the volume of the reports received by the Committee. There are four current categories of standing reports:

• Internal Audit Work Plan Status Updates;
• Hotline Complaints Statistics;
• Investigations Statistics; and
• Sole Source Contracts Review – drawn from procurement.

In response to a question raised by the Committee Chair with respect to the kind of calls received by the department, Mr. Michael Vear informed the Committee that in a three-month period (quarterly) 275 calls were received through the tenant line, in addition to other items that require further investigation.

The Committee Chair noted the big volume of calls received. In response to a question raised with respect to the volume of calls received through the Corporation’s call centre, as to whether the calls are filtered by the Internal Audit department versus staff, Mr. Michael Vear explained that Internal Audit staff monitor and filter the calls received on a daily basis, re-directing them to the appropriate department.

In response to a question raised by the Committee Chair with respect to the frequency of the reports, Mr. Michael Vear suggested to the Committee that the reports be presented four times per year (quarterly) and they would be due the first meeting after each quarter.

In response to a question raised by Mr. Christian Buhagiar with respect to whether the changes will be reported on in the Internal Audit Work Plan, Mr. Michel Vear informed the Committee that the Work Plan will include status updates showing the changes occurred in between two consecutive Committee meetings.

The Committee Chair recommended that the Chief Internal Auditor report to the Committee at every meeting.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously adopted the report and reviewed the frequency of which they would like to receive various Internal Audit and Investigations standing reports. The Committee unanimously agreed that the Chief Internal Auditor will report on the Internal Audit Work Plan Status Updates at every meeting.

Item 5 – External Audit Work Planning: Year Ended December 31, 2011, CAAC:2012-14

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-14) from the Interim Chief Executive Officer.

Daniel D’Archivio from PricewaterhouseCoopers Inc. was in attendance, to present to the Committee the audit plan for the 2011 audit of consolidated financial statements of the Corporation.

The Committee discussed the financial statements with respect to their materiality, internal control deficiencies, engagement of the external auditor, and reporting on subsidiaries. Mr. Len Koroneos informed the Committee that there was a motion from the City that requires individual reporting on each subsidiary and submission of their respective financial statements.

The Committee Chair noted that the accounting policy of dealing with certain joint ventures is proportionate consolidation, whilst for others the equity method is used. There should be consistent treatment of the financial statements for joint ventures and subsidiaries.

In response to a question raised by Mr. Christian Buhagiar with respect to whether sitting on the Board of Directors of another firm is considered “related party”, Mr. Daniel D’Archivio explained that just sitting on another firm’s Board of Directors does not mean necessarily a “related party”.

In response to a question raised by the Committee Chair with respect to the standard used for determining the fair value of a unit or building, in relation to the impairment of housing projects and other capital assets, Mr. Daniel D’Archivio explained to the Committee that the standard requires that if a unit or building is not able to provide an analysis of utilization versus cost that is considered impairment. It is not related to cash-flow as with other businesses.

In response to a question raised by Mr. Christian Buhagiar with respect to prior write-downs on assets, PricewaterhouseCoopers Inc. confirmed that the amount of $100,000 is not considered as an impairment.

In response to a question raised by Ms. Catherine Wilkinson with respect to where the write-down assets are tracked, the Committee Chair explained that the vacancy report that will be presented to the Committee at a future meeting will contain the written-down assets.

In response to a question raised by the Committee Chair with respect to the level of materiality, Mr. Daniel D’Archivio informed the Committee that the level of materiality is typically considered 1% of revenue for real estate and it will also be applied to subsidiaries. 5% of overall materiality ($340,000 as of December 31, 2011) will be brought to the attention of the Committee. Using other companies as benchmarks, it was determined that they use similar guidelines with respect to the level of materiality as the Corporation does. Currently, PricewaterhouseCoopers Inc. is working with management to re-assess the policies of the previous year and it will report back. Mr. Daniel D’Archivio further informed the Committee that PricewaterhouseCoopers Inc. will evaluate consistent accounting principles with joint ventures.

Motion carried

ON MOTION DULY MADE by Mr. Jason Gorel, seconded by Mr. Brian Kwan, the Corporate Affairs and Audit Committee unanimously approved the Audit Planning report for 2011 from PricewaterhouseCoopers LLP.

Item 6 – Interim Quarterly Comprehensive, Consolidated Financial Statements, Verbal Report

The Corporate Affairs and Audit Committee was presented with a verbal report by the Interim Chief Executive Officer.

Mr. Len Koroneos informed the Committee that consolidated financial statements are required subsequent to the Auditor General’s reports. All subsidiaries and joint ventures will be audited.

In response to a question raised by Christian Buhagiar with respect to the audit of all subsidiaries for 2011, Mr. Daniel D’Archivio informed the Committee that all the subsidiaries will be audited, subject to the Corporation’s approval.

In response to a question raised by Mr. Len Koroneos with respect to the fee for all supplementary non-audited entities, Mr. Daniel D’Archivio informed the Committee that for a complete 2011 audit, the fee applicable will be between $42,000 and $55,000. The fee will cover the issuance of consolidated financial statements for the Corporation as well as individual financial statements for each subsidiary. In addition to that, to set up quarterly, unaudited financial statements will cost an additional amount of $20,000 to $25,000 for each quarter.

In response to a question raised by the Committee Chair with respect to whether management is prepared to take the avenue of the quarterly, unaudited financial statements, Mr. Len Koroneos informed the Committee that this will involve additional work that will need additional resources.

In response to a question raised by the Committee Chair with respect to the timing of obtaining quarterly financial statements, Mr. Len Koroneos informed the Committee that without a Chief Financial Officer yet in place, the target date will be Q1 2013.

The Committee Chair recommended that the Chief Executive Officer present the Committee with a plan for resources needed to implement the quarterly financial statements at the next meeting.

In response to a question raised by the Committee Chair with respect to whether it is possible to initiate a process to move to quarterly financial statements using internal resources, Mr. Len Koroneos informed the Committee that the matter was discussed with Daniel D’Archivio and there is preference for doing it internally as a start, with an overview from PricewaterhouseCoopers Inc.

Mr. Daniel D’Archivio informed the Committee that there was a discussion about what the fee quote for quarterly financial reporting would be and what the services from PricewaterhouseCoopers covered. The quarterly financial statements will include no detail testing and PricewaterhouseCoopers will review the financial reports only for the benefit of the Committee and the Board of Directors. The process will be similar to the review of financial statements for public companies.

Mr. Christian Buhagiar noted that it is needed to understand what the Corporation’s Shareholder wants as well, no matter whether the financial statements are audited or not.

Mr. Len Koroneos noted that the materiality of each subsidiary did not change. If the Shareholder decides to continue next year with the same external audit firm, it may consider the approval of the service fee of $42,000 to $50,000.

Item 7 – 2012 Operating Plan, Verbal Report

The Corporate Affairs and Audit Committee was presented with a verbal report by the Interim Chief Executive Officer.

Mr. Len Koroneos presented the Committee with a verbal update on 2012 Operating Plan, including the following highlights:

• The Corporation follows the City’s budget process.
• An Interim Capital Plan was developed that will become final.
• There is a deficit close to $3.5 million.
• Management has been working to bring the deficit to zero.
• There is an emphasis on increasing staff’s efficiency.
• $6 million less spent.
• Management is looking to other places as potential financial resources to balance the deficit; it might be either a capital item or through reserves.
• Management will provide an update at the next Committee meeting.
• Management is working with Operating Units to tighten their budgets as much as possible.

Item 8 – Toronto Community Housing Financial Performance Report: Q4 2011, CAAC:2012-15

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-15) from the Interim Chief Executive Officer.

In response to questions raised by the Committee Chair with respect to the surplus and interest/investment income, Mr. Len Koroneos explained to the Committee that the entire surplus of $13 million is used in capital repairs.

Mr. Len Koroneos presented the Committee with a verbal update on the 200 Wellesley Street fire. The Corporation will be recovering the costs from insurance. There is nothing to be added to the budget for this item. Management is working to find efficiencies that would bring $6 million in savings.

In response to a question raised by the Committee Chair with respect to using the surplus to cover up the $6 million cost, Mr. Len Koroneos informed the Committee that it cannot be done as the circumstances change every year and the resources available as well. In addition, there is a decrease in subsidies, which makes it difficult for staff and operations. Those are not real surpluses. An amount of $12 million in grants has not yet been received. There are no significant changes in the plan.

Ms. Catherine Wilkinson noted that the capital repairs rely on funding that may be received or not. Using staff vacancies as a way to obtain the needed financial resources is not the right solution.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 9 – Review of Board, CEO And Senior Management Expenses: Q4 2011, CAAC:2012-16

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-16) from the Interim Chief Executive Officer.

The Committee discussed the legal counsels’ expenses for seminars and membership fees.

Ms. Marta Asturi informed the Committee that detailed information about senior management’s expenses and a breakdown as well are posted on the external website. The seminars and the certificate program were pre-approved. Ms. Marta Asturi will circulate an e-mail to the Committee, providing answers to the questions raised with respect to lawyers’ expenses, including attachments as supporting documentation.

Mr. Christian Buhagiar noted that the expenses by Mr. Zahir Bhaidani and Councillor Norm Kelly, related to the ONPHA Conference, were approved by the Board Chair.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 10 – Implementation of Auditor General Procurement and Employee Expense Recommendations: Status Report, CAAC:2012-17

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-17) from the Interim Chief Executive Officer.

The Committee Chair introduced the report.

Ms. Michelle Haney-Kileeg informed the Committee that management submitted to the Auditor General an interim report in January 2012, providing him with the status of the implementation process. Last week there was a meeting with the Auditor General and he was pleased with the way the Corporation is implementing his recommendations.

There was a discussion on the process starting with the issuance of the Auditor General’s report up to the implementation of his recommendations. The Committee Chair raised questions with respect to the next steps and how the process works. He further requested that the Chief Internal Auditor, Mr. Michael Vear, be involved by monitoring the process. Three reports have been received from the Auditor General’s office in 2012. The Committee Chair recommended that in the future, Mr. Michael Vear and his team review the recommendations management have represented to be completed. Management was requested to ensure that Mr. Michael Vear is given the necessary assistance in monitoring staff’s duties with respect to the Auditor General’s September 2011 recommendations. Management was also requested to carbon copy Mr. Michael Vear with all the correspondence to and from the Auditor General’s office.

Ms. Michelle Haney-Kileeg informed the Committee that the Auditor General commented that some “completed” recommendations are tied to the external review TCH has engaged, and therefore until that review is completed, including an evaluation of current processes, some recommendations can not be assigned the 'completed' label and timelines were adjusted accordingly.

In response to a question raised by the Committee Chair with respect to whether management is working with the Auditor General’s office during the implementation process of the recommendations, Ms. Michelle Haney-Kileeg informed the Committee that management has been working with the Auditor General’s office. There is no mid-term reporting, so the Auditor General reports on the entire Work Plan of his office within a reasonable time frame, which is not less than 12 months. Management received yesterday new documentation from the Auditor General’s office.

Mr. Roman Mesec informed the Committee that there is a regular dialogue between management and the Auditor General’s office to inform them of the status of the implementation process. Time as well as practical aspects of the Corporation’s operations are the main issues.

Mr. Michael Vear explained to the Committee that the Auditor General provides comments only on his recommendations that were implemented. The Auditor General’s office will do a review again next year on the recommendations that have not yet been implemented.

The Committee Chair recommended that direct communications be established between management and the Auditor General’s office and the Internal Audit office receive copies of all the correspondence.

Ms. Catherine Wilkinson noted that the recommendation AGPr 17 be addressed in camera at a future Committee meeting to ensure that such situations will not be happening again with respect to overseas procurement.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 11 – Implementation of Auditor General’s Fleet Recommendations: Status Report, CAAC:2012-18

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-18) from the Interim Chief Executive Officer.

The Committee Chair noted that management just received the Auditor General’s reports for agenda items 11, 12 and 13. He further recommended that management consider a process to address the reports and report back to the Committee.

Mr. Christian Buhagiar noted that Human Resources, Compliance and Ethics, and Policy Development fall under the Terms of Reference of the Governance, Risk and Human Resources Committee. The Committee Chair recommended that the Fleet report update be provided to the Governance, Risk and Human Resources Committee for information.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 12 – Implementation of Auditor General’s HSI Procurement Recommendations: Status Report, CAAC:2012-19

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-19) from the Interim Chief Executive Officer.

The Committee Chair invited Ms. Josie Scioli to present the Committee with a summary of the implementation process of the Auditor General’s recommendations on procurement at HSI.

Ms. Josie Scioli informed the Committee that:

• Mr. Roman Mesec and a Task Force / project team are reviewing the procurement process at HSI. The Task Force / project team was set up in mid 2011 and has been working on a new structure to consolidate work to be delivered by HSI.
• The intent is that once the review and implementation are complete, Mr. Michael Vear will do the testing and monitor the progress.
• HSI initiated shared services discussions with the Corporation, as part of the HSI 3-year plan, developed and approved by the new HSI Board of Directors and HSI Executive team in February 2011.
• HSI is on the right path, meeting achievable timelines.

Ms. Catherine Wilkinson raised the issue of vendors on recommendation item 10. She further suggested that there should be scorecards in place provided to tenants to measure their satisfaction with the vendors. In response, Ms. Josie Scioli informed the Committee that there is someone on site, building the scorecards. Reviews and feedback are received from tenants.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 13 – Implementation of Auditor General TCH Subsidiary Recommendations: Status Report, CAAC:2012-20 / GRHRC:2012-09

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-20; GRHRC:2012-09) from the Interim Chief Executive Officer.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

Item 14 – Toronto Community Housing Subsidiaries, CAAC:2012-21

The Corporate Affairs and Audit Committee had before it the above-captioned report (CAAC:2012-21) from the Chief Internal Auditor.

The Committee Chair recommended that staff report back to the Committee with additional information and redirect some information to the Governance, Risk and Human Resources Committee.

The Committee Chair raised the following questions:

• What are the directors’ terms of office?
• Have the financial statements been reviewed for all subsidiaries from 2007 up to date? If yes, when will they be available?
• What are the Directors & Officers’ remuneration?
• When will the information related to Directors and Officers be provided (Innoserv)?
• How the information is going to be provided to the Committee?
• Is there a need for subsidiaries structured this way?

In response, Mr. Len Koroneos informed the Committee that the financial statements were initially reviewed by him. The need for subsidiaries was reviewed when the issue was raised. The intent is to consolidate the subsidiary’s information into the parent company (e.g. HSI is starting to share services with the Corporation / move departments). HSI and AHCI are looking at consolidation as an easier way to manage their business operations.

To protect the risk of the parent corporate entity, the Committee Chair solicited some guidance from the Chief Executive Officer (Interim). Mr. Len Koroneos informed the Committee that all subsidiaries, as they appear on the diagram and chart attached to the report, will be maintained as they are for the present time.

The Committee Chair recommended that management evaluate the current status of all subsidiaries, identifying what subsidiaries might be wound up. Staff will report back on this matter.

In response to a question raised by the Committee with respect to Mr. Derek Ballantyne registered as director and officer of 2001064 Ontario Inc., Mr. Len Koroneos informed that there is a Governance, Risk and Human Resources Committee meeting this afternoon and one of its agenda items is to remove Mr. Ballantyne as a director and officer of 2001064 Ontario Inc.

Ms. Catherine Wilkinson noted that this report is a public report and she suggested that subsidiaries be discussed in camera at future meetings.

The Committee Chair recommended that staff include in a future report the rationale and benefits to the Corporation for each subsidiary. Mr. Michael Vear will bring a revised report back to the Committee, with recommendations on what and what not should be maintained as subsidiaries.

Motion carried

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the Corporate Affairs and Audit Committee unanimously received the report for information.

In Camera Proceedings

The Corporate Affairs and Audit Committee resolved to meet in camera at 11:40 a.m. to consider items A, B, C, D and E.

Public Proceedings

At 1:55 p.m. the Committee Chair announced the resumption of the public proceedings and the public meeting reconvened at that time.

Adjournment

ON MOTION DULY MADE by Mr. Brian Kwan, seconded by Mr. Jason Gorel, the meeting of the Corporate Affairs and Audit Committee was adjourned at 1:55 p.m.