Action on Audit Report Prepares Vaughan for Future Projects
June 18, 2013
How the City of Vaughan manages major capital projects has been significantly improved by implementing all the recommendations of a third-party construction audit of its new City Hall. Each recommendation has been incorporated into new processes and procedures that will immediately be implemented in major projects scheduled over the next 12 months, including the Civic Centre Resource Library, the North Thornhill Library and the North Maple Park.
How the City of Vaughan manages major capital projects has been significantly improved by implementing all the recommendations of a third-party construction audit of its new City Hall. Each recommendation has been incorporated into new processes and procedures that will immediately be implemented in major projects scheduled over the next 12 months, including the Civic Centre Resource Library, the North Thornhill Library and the North Maple Park.
“I am pleased with the thorough work that has been done to implement the audit’s recommendations,” said Mayor Maurizio Bevilacqua. “Understanding the complexity of the City Hall project, it was important for Council to take immediate action to determine the reasons for delays and costs by calling for an independent audit in March 2011. I am confident that the enhanced processes and procedures we’ve adopted today will successfully guide the City through major construction projects in the future.”
Council received a report today outlining the progress that has been made on each of the six recommendations from an audit prepared by Commercial Cost Control Inc. in July 2011. The audit was undertaken as part of a review of the new City Hall project focusing on how the overall costs had exceeded the original budget.
“We viewed this as a real opportunity to improve by implementing each recommendation,” said Interim City Manager Barbara Cribbett. “We are now better positioned to report capital project updates, assess and measure risks, and forecast against projected timelines and available budgets. Going forward, we will continually look for opportunities to enhance our processes and procedures in every capital project we undertake.”
Highlights from the staff report:
• Bid analysis – A revised Purchasing Policy has been approved, and related procedures and guidelines are being finalized. Staff are examining bid results looking for significant spreads between the lowest and highest bidders, and then meeting with lowest bidders to ensure they understand the scope of the project.
• Contingency factoring – A contingency matrix has been developed to evaluate the risks of capital projects and determine an estimated contingency. As a result of this approach, contingencies were incorporated into several projects included in the 2013 capital budget discussions.
• Regular project reports – The draft Capital Project Financial Control Policy addresses various aspects of capital project finance control, including how and to what level of detail updates on significant capital projects are reported. This enhanced reporting will be included in quarterly reports to Council. It is anticipated the policy will come to Council for final approval this fall.
• Cash flow – Cash flow variances for significant projects will be apparent through enhanced reporting on project schedules and change order tracking.
• Change order signing and process – A process to better track requests for information and change orders has been implemented by the Community Services department.
• Institutional memory – Elements of the audit’s recommendations and processes have been incorporated into the Purchasing Policy, the contingency requirements and the draft Capital Project Financial Control Policy.
• Contingency factoring – A contingency matrix has been developed to evaluate the risks of capital projects and determine an estimated contingency. As a result of this approach, contingencies were incorporated into several projects included in the 2013 capital budget discussions.
• Regular project reports – The draft Capital Project Financial Control Policy addresses various aspects of capital project finance control, including how and to what level of detail updates on significant capital projects are reported. This enhanced reporting will be included in quarterly reports to Council. It is anticipated the policy will come to Council for final approval this fall.
• Cash flow – Cash flow variances for significant projects will be apparent through enhanced reporting on project schedules and change order tracking.
• Change order signing and process – A process to better track requests for information and change orders has been implemented by the Community Services department.
• Institutional memory – Elements of the audit’s recommendations and processes have been incorporated into the Purchasing Policy, the contingency requirements and the draft Capital Project Financial Control Policy.