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Sprint 1 – Financial Proposal and Financial Due Diligence
In determining the scope of our first sprint, we conducted a risk assessment to identify areas where our Office could provide the most value through the conduct of our work. As part of our risk assessment, we took into consideration concerns raised to our attention from members of Council and residents of Ottawa.
Scope of the Audit
The scope of our first audit sprint is limited to the financial proposal presented to City Council in November 2023 and the associated due diligence applied to it. The objective of this audit sprint is to provide assurance that key components and underlying assumptions of the Lansdowne revitalization financial proposal (i.e., budget and funding strategy) and due diligence represent reasonable and sound financial estimates. This includes key assumptions related to: proceeds from the sale of air rights, event ticket revenue, sponsorship revenue, retail revenue, parking revenue and property tax uplift and associated project costs including construction costs, operating expenditures and business interruption costs.
The audit scope does not include the non-financial elements of the proposal, or any associated due diligence work conducted thereon.
Our Office recognizes that this audit sprint will not answer all the questions that members of the public have regarding the Lansdowne 2.0 Redevelopment, but it has been designed to provide assurance on the key assumptions that supported the financial proposal presented to Council in November 2023. We believe some of the questions being asked will likely be addressed in future audit sprints planned to be undertaken as the project progresses.
OAG Mandate
It is important to remember a few key considerations associated with independent audits performed by the OAG. To remain independent, the OAG must be separate from all management activities and therefore, can only evaluate analyses, estimates, decisions, and recommendations made by management.
The OAG cannot create the analysis or make decisions. This limits us in what we can look at and when. We can only apply audit procedures when sufficient work has been done or decisions have been made such that we can apply our audit procedures against.
For example, our Office is not in a position to review the revised agreement with the Ottawa Sports and Entertainment Group (OSEG) as it has not been finalized. This item could be considered for a future sprint.
To learn more about the OAG’s mandate, please visit the Auditor General By-Law page on our website.
Timing
Our fieldwork for this audit sprint is currently underway and is scheduled to be completed by April 2024. The results of this sprint are projected to be presented to the Audit Committee in June 2024.
We have onboarded a team of consultants, including those with expertise in financial due diligence, to assist us throughout the course of our work.
