Report Date:6/11/2023 Report Auditee:Capital and Development Finance

Why this Audit Matters
This audit evaluated the City’s By-Law enforcement operations with regards to Property Standards service requests. Addressing operational deficiencies is crucial to improve resource allocation, mitigate financial loss, and enhance the overall quality of by-law enforcement services provided to residents.
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These charges are an important source of revenue for the City to finance the additional infrastructure needed to service growth.

Development charges are applied to all new developments and redevelopments in the City (Residential, Industrial and Commercial). These charges are an important source of revenue for the City to finance the additional infrastructure needed to service growth.  

The Development Charges Act requires that the City undertake a background study to identify infrastructure needs resulting from growth and the associated costs before adopting a by-law. The Act requires municipalities to adopt a development charges (DC) by-law every ten years, at a minimum. As a result, City conducts development charge studies every five years with the most recent background study completed in 2019. 

The City of Brampton adopted the current development charges by-laws in 2019. The rates outlined in the by-laws were set based on the 2019 background study. There are 8 by-laws (129-General Government, 130-Library Services, 131-Recreation Services, 132-Fire Services, 133-Public Works, 134-Transit Services, 135-Roads and 136-Brampton West; North-South Transportation Corridor).  

The Development Charges Act requires the municipality’s Treasurer to provide City Council with a statement about each Reserve Fund established under the Act each year. The statement reflects the opening and closing balances of each year, the current year's distribution of the DC proceeds, any financing transfers and the interest earned on the fund. 

  1. Processing invoices where development charge rates have been frozen is manual & inefficient
  2. System control to automatically apply current rates is not functioning when rates decrease
  3. Development charges rate updates in the system are not properly vetted and approved
  4. Current certificates of insurance are not always on file​​
  5. Standard operating Procedures are not current.
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The seven recommendations in this report direct management to collaborate with IT and develop more consistent procedure to address service requests in a timely manner. These actions will ensure request fulfillment is being closely monitored and resources are being allocated effectively. This would enhance the City’s accountability, improve services, and resident satisfaction.

Overall, development charge processes are operating effectively, and proper oversight is in place through reviews, approvals and reconciliations. Nothing has come to our attention that indicates that development charges are applied incorrectly or contradict the development charges By-laws. However, we have noted the following combination of inefficiencies, control risks, and system limitations in the development charge billing process that could reduce billing accuracy:

  • Inefficiency in processing invoices with frozen rates due to system limitations as described in finding number 1
  • Lack of automatic adjustments to development charges when rates decrease due to system limitations as described in finding number 2
  • Lack of comprehensive controls in the process of updating development charge rates in the system as described in finding number 3

Staff should implement IT enhancements and strengthen the rate update process to improve billing controls and efficiency.

Additionally, staff should improve the monitoring of insurance coverage to ensure that the City always has updated Certificates of Insurance on file for developments. This is described in finding number 4.

Acting on the recommenda​tions below will improve the City’s administration of development charges.​

Appendices

Contact Internal Audit

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Brampton City Hall
2 Wellington Street West
Brampton, ON L6Y 4R2

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