Detailed findings

1. Establish control to independently review the payment certificate calculation template (design effectiveness)			Overall rating:Low
Impact:	Low	Likelihood:	Unlikely
Observation:The contract between the City and the contractor allows vehicle operating rates, wing plow operator rates, and drivers' standby rates to be adjusted at 85% of the increase or decrease in the CPI Transportation component at the start of each contract year, with the initial increase occurring on November 1, 2017. We noted the use of incorrect CPI rates for both the 2017/2018 and 2018/2019 season. These resulted in total overpayment of $37,752 over the course of the two seasons. A summary of the calculation factors follows below. Based on our detection of the error, management has acted and recovered the full amount from the contractor as of January 2020. Management recovered this amount by deducting half the value on each of the November and December 2019 payment certificates.
Implication:The City incurred financial loss due to overpayment made to the contractor
Recommendation:To ensure accuracy of future contractor payment, management should consider having an independent review of the payment certificate calculation template prior to each snow season. This review should check the operating rates and formulas.
Management Action Plan
Prior to each season, the Contracts Coordinator will prepare the adjusted rates for the applicable contract items based on the Consumer Price Index,Transportation component for Ontario. The Contracts Coordinator will submit these numbers to Finance for verification.		Responsible party:	Contract Co-ordinator
		Due date:	Q4 Annually