Auditor General Alastair Swarbrick in his latest audit report found “gaps and weaknesses” in how government manages its spending on major capital projects, such as the three high school construction projects and for the Government Administration Building.
The auditor found that because business cases for those projects had not been prepared, the projects changed significantly in size and cost and were not able to demonstrate good value-for-money.
He also concluded that roles and responsibilities between politicians and administrative staff were not clearly defined; that there was a lack of sound financial management practices; and a need for basic quality standards for how major capital projects such as buildings should be built.
In his report on the government’s management of major capital projects, released on Thursday, 5 July, Mr. Swarbrick also assessed how well the government managed approximately 25 per cent, or about $150 million, of annual spending.
“While there are problems with the government’s management framework for major capital projects, we found good practices used in the building of the Government Administration Building,” said Mr. Swarbrick. “The government may wish to consider these for standard practice for the management of all future major capital projects.”
The audit concluded that the significant gaps and weaknesses in how government manages its spending for major capital projects contributed to a waste of scarce resources and a lack of accountability for public expenditures.
“Government needs to ensure that effective and robust practices are in place across the public service to manage these significant capital projects to demonstrate due regard for value-for-money. We found it is left up to the individual ministries to determine how it is done,” said Mr. Swarbrick. “Therefore, we have recommended that there be a centre of excellence created to ensure these projects are managed more effectively in the future”.
He recommended that the government should ensure that the Government Administration Building be more fully occupied, as it is only 60 per cent full now.
In his report, the auditor pointed out issues that impacted the building of the Government Administration Building and the design and contracting of the three high schools projects, including the fact that the building of the high schools was handled by the Ministry of Education, Training and Employment, even though the ministry did not have the management expertise or experience to execute these kinds of projects.
He said the the lack of an experienced project manager, together with the involvement of politicians in the conceptual design phase of the projects, resulted in them being poorly managed and controlled leading up to the signing of the contract with the general contractor in 2008.
For more on this story, read Friday’s Caymanian Compass.