Toronto audit finds City staff spent $11M for unused, underutilized software licences

The auditor general for the City of Toronto is calling for IT-related changes after office staff found $11 million has been spent on unused and underutilized software licences.

According to a report going to the audit committee on Monday, the Toronto auditor general’s office looked at seven major software subscriptions for time periods between 2020 and 2024.

Auditors estimated $9.63 million was spent toward unused licences with a majority of that spending going toward Microsoft M365 (formerly known as Microsoft Office).

It said $1.36 million was spent on licences for ex-City of Toronto employees or employees on long-term leave.

Between 2019 and 2023, auditors said the City spent around $235 million ($78 million in 2023 alone) on buying and maintaining software for use by staff. They said approximately 1,200 of the 7,500 software titles the municipality uses are paid.

“Software licences are a significant and growing cost, as the City embraces digital infrastructure and automates its systems and processes,” the report said.

“It is important to maximize the value of the City’s investment in software and ensure that acquired software licences and subscriptions are carefully planned, managed, and deployed in a timely manner.”

The report said 12 recommendations from past software audits were still deemed as ongoing and most were made more than five years ago.

Auditor General Tara Anderson made 10 recommendations to Toronto city council in response to the findings. While most related to the seven software applications studied, she said there are lessons to be learned for all others used.

The recommendations centred around making improvements to the purchasing and oversight of licences, better project planning and coordination, streamlining the “off-boarding process” to reduce the likelihood of paid licences sitting dormant, stronger IT governance and potentially more use of bulk purchasing with other municipal agencies and corporations to get better economies of scale.