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Cash Handling and Risk Management
( display item 5)
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• Auditor's report on East York Curling Club
The Auditor General for the City of Toronto reviewed the "internal controls" of the Curling Club, and submitted its report on January 19, 2010. As at Dufferin Grove Park, volunteer members of the curling club and city recreational staff work together. At the curling club, however, staff and volunteers rent curling facilities, work at the bar, as well as the outsourced food concession and outsourced pro shop.
The Club's revenues in 2009 were $ 382,100, and its expenditures $ 350,400.
The Curling club - whose core programs are and have historically been operated by volunteers and a volunteer board - was established by city by-law in 1969 as a Board of Management. In 1995, when the club was not able to cover the expenses of running the club and facility repairs, the City repealed the by-law and took on the overall responsibility for operating and capital management of the Club.
The city Audit was done when the operations of the Curling Club came to the notice of the Auditor - in the course of a 2009 city-wide review of purchasing cards. PCards, as they are called, are essentially employee issued Mastercard cards used for small purchases. City purchasing program
The Auditor did not find any irregularities in the Club's use of PCards, but it deemed it appropriate to look into the internal controls of the curling club and, at the same time, to do this is the context of other similar organizations. It specifically mentions 2 parks and 2 other city-run curling clubs.
Key quotes from the report are set out below. The report notes that: "The East York Curling Club is a facility owned by the City. The Club is a volunteer organization that operates many components of the program. The Club’s primary sources of income are membership fees, snack and beverage sales, and facility rentals. The objective of this review was to assess the adequacy of the Club’s system of internal control over revenues, inventory management and compliance with policies and procedures related to cash handling and purchasing."
The Auditor notes that it has undertaken other reviews of the cash handling and finances at other PFR facilities in the City, including:
Cash Controls Review – Parks and Recreation Division, East and West Districts (May 2000)
Review of Receivables Relating to Parks and Recreation Operations and the Review of Revenue and Cash Controls Relating to the Parks and Recreation Division, North and South Districts (March 2004)
Review of Controls Over Ferry Services Revenue (January 2010).
One of the Auditor's key concerns relates to the fact that: "no governance framework has been put into place to formally define their role, responsibilities, and accountability to the City of Toronto".
The report further stated that:
"It is important that a clear governance and operating framework be established for community volunteers and groups involved in operating programs at the curling facility. Furthermore, without clearly defining the roles of City staff and community volunteers and groups, staff resources may not be deployed to support programs in the most efficient and effective manner. A key recommendation included in this audit report is for management to evaluate the objectives for curling facilities within the City and their alignment with the mission and values set out by Council. The role of the City in operating programs and services at each of the City owned curling facilities should be evaluated to determine suitable models for the operation of curling programs and facilities that support community involvement. Improved operating efficiencies in both core programs and the curling facility itself are possible by outsourcing services through lease agreements with community groups and service providers. This is an operating arrangement which should receive serious consideration in the context of defining the City’s role in similar organizations."
It noted that "less significant issues that came to our attention during the audit. These issues related to the need to align Club procedures with City policies and address certain weaknesses in controls over revenue collection and inventory management processes. The Parks, Forestry and Recreation division’s responsibility for implementing the recommendations would be limited to the extent that the Club activities remain integrated with the City."