AGLG Sechelt Project Review Conclusions and Recommendations: Is Nanaimo Any Different?

Ron Bolin: Sept. 3, 2015

The following Conclusions and Recommendations are taken from the April report by the Office of the Auditor General for Local Governments of British Columbia on two projects in the District of Sechelt. While there is more meat on these bones in the Report itself, the drift can be seen in these two sections from the report.

The Report itself can be found at:

http://www.aglg.ca/includes/docs/Audit-Topic-3-Report-2-Sechelt.pdf

As you scan these items, consider their application to Nanaimo, a City with a population of approximately 10 times the population of the District of Sechelt and with a corresponding larger budget and the possibility of even more egregious errors.

If you find areas in which you believe that Nanaimo could improve in these areas send your comments to this post.


From the Report

CONCLUSIONS

We are pleased that the District is developing policy in areas such as procurement and conflict of interest and its expressed commitment to improve its capital asset management practices.

3.2.155   Overall, we found the way the District of Sechelt dealt with the reviewed capital projects and managed its capital assets during the period covered by the audit to be problematic. We found issues with project decision-making and capital project procurement, as well as Sechelt’s lack of a systematic approach to capital asset management.

3.2.156   We are concerned about the issues we found regarding how the District planned and procured contractors for the two projects were viewed. Some of the practices used by the District in planning and procuring these projects exposed the District to unnecessary risks and need to be revised.

3.2.157   We also found that the District’s approach to capital asset management was in need of improvement in several respects. We concluded that the District should act to improve its capital asset management and capital project planning and procurement practices. We have provided recommendations aimed at assisting the District in accomplishing this.

3.2.158   We are pleased that the District is developing policy in areas such as procurement and conflict of interest and its expressed commitment to improve its capital asset management practices. We encourage the District to build on this progress.

RECOMMENDATIONS

Recommendation 1 The District of Sechelt should require the preparation of a business case prior to Council approval of a capital project.

Recommendation 2 The District of Sechelt should develop and implement clear policy on the delegation of authority to council committees. This should include provisions to:

  • Require the adoption of terms of reference prior to a committee beginning its work.
  • Ensure that such terms of reference include clear limits on the authority of committees to act on behalf of Council.
  • Require regular and thorough reporting back to Council.

Recommendation 3 The District of Sechelt should enhance the transparency of decision-making by:

  • Providing as much information as possible to the public on its capital project priorities and plans, and in a timely manner.
  • Conducting as much Council business as is reasonably possible in meetings that are open to the public.

Recommendation 4 The District of Sechelt should develop and implement a Council approved conflict of interest policy for elected officials, staff and Council committee members. This should include provisions to:

  • Address both actual conflict of interest and the appearance of conflict of interest.
  • Require staff involved in procurement to declare potential conflicts of interest annually.
  • Maintain a list of known   potential conflicts of staff and council members. • Require suppliers to sign a conflict of interest declaration.
  • Identify a senior staff member independent of the procurement function who staff may approach in confidence should they have any concerns regarding conflict of interest.
  • Establish procedures for resolving allegations of conflict of interest.
  • Ensure that committee members who are not members of Council do not use their committee position to advance their personal interests.

Recommendation 5 The District of Sechelt should make appropriate use of its senior staff in the planning and monitoring of major capital projects and ensure that its finance department is actively involved in assessing capital project procurement initiatives, including challenging cost estimates and assumptions.

Recommendation 6  The District of Sechelt should undertake a post-completion review of the wastewater treatment plant project, including an evaluation of construction, project management and costs in completing   it, as well as risks, lifecycle costs and its long-term financial sustainability. The District should make the review report available to the public.

Recommendation 7  The District of Sechelt should strengthen its procurement policy by including provisions to:

  • Require Council to approve the policy and any future   amendments.
  • Identify specific circumstances under which it is acceptable to award contracts   without competition.
  • Establish a clear requirement for the use of written contracts.
  • Establish clear requirements for the documentation of   procurement decisions and reporting of those decisions to Council.

Recommendation 8  The District of Sechelt should develop and   implement a systematic   approach to capital asset management. Initial steps should   include:

  • Improving the District’s information on its capital assets.
  • Implementing a process to identify, assess and treat risks with its capital assets.
  • Strengthening links between capital asset management activities and capital project planning.
  • Developing a clear plan for funding future capital expenditures

End of Post