Halifax’s auditor general is concerned the municipality isn’t doing enough to plan for big projects after management failed to implement some of her recommendations from 2019.
Evangeline Colman-Sadd presented a follow-up report to a virtual meeting of Halifax regional council’s Audit and Finance Standing Committee on Wednesday looking at the municipality’s progress in implementing 11 recommendations from three audits in fiscal 2019-2020.
Of those 11 recommendations, seven were implemented — 64%.
“This is below the level that we expect for audits that were released two years ago,” Colman-Sadd told councillors, noting its the second report with a similar percentage after a June 2021 follow-up revealed recommendations were 63% complete.
“We have heard from management in their responses to both that June 2021 follow-up and today’s that COVID has contributed to challenges in completing recommendations. We understand certainly that COVID obviously has an impact on operations. However, at times when staff are at home, not able to necessarily be in the office, potentially having all of the additional pressures that came along with the first two years of the pandemic in our lives, controls and having strong policies in place can be even more important in organizations.”
The three audits covered the municipality’s LED streetlight conversion project (zero of two recommendations implemented); its new website project (one of one recommendations implemented); and fleet vehicle use (four of four Halifax Water recommendations implemented, two of four HRM recommendations implemented).
Colman-Sadd said she was particularly concerned about the recommendations from the LED streetlight conversion audit. That audit found that while the project was generally successful and HRM is realizing savings from the conversion to LED lights, there were flaws in the project planning process. Colman-Sadd’s office noted there was no “comprehensive risk assessment” conducted as part of that process, and recommended, “HRM should develop a comprehensive risk assessment process for planning significant capital projects.”
That recommendation hasn’t been implemented, even though management agreed with it in 2019.
“Management told us COVID delayed initiatives; however, significant capital projects such as the Cogswell Interchange are moving forward, and it is concerning that a comprehensive process was not in place for the start of large projects such as this,” Colman-Sadd said.
The other recommendation from that audit — “HRM should develop a policy related to significant capital project files. This should include assigning overall project file responsibility and determining what documents to include in project records.” — hasn’t been implemented either.
Management told Colman-Sadd that’s because an internal records management system upgrade was delayed, but she said that excuse doesn’t hold up, and it’s a recurring issue.
“We have had a number of audits that have shown that the existing corporate records policy is not leading to adequate files on projects. Information is often in individual staff email accounts, can be time consuming or difficult to locate. And it may not be accessible at all if the employee has left HRM,” Colman-Sadd said.
Chief financial officer Jerry Blackwood said the municipality does have risk management policies in each business unit.
“We need to probably formalize that a little bit more, that program, to specific capital projects,” Blackwood said.
Specific to the Cogswell Interchange project, Blackwood said he sits on the steering committee and “risk is discussed there.”
Crystal Nowlan, municipal director of asset management, said there’s been significant work done toward completing the AG’s recommendations, and there are processes in place to assess risk.
“Those other elements have greatly reduced the the amount of risk associated with capital project planning and I don’t want any of this committee to feel like we have not been having our focus on risk mitigation around the value of the dollars that are invested into our capital projects,” Nowlan said.
Coun. Shawn Cleary felt that wasn’t good enough.
“In my mind we have major projects ongoing and coming up, and you know, tens of millions, hundreds of millions of dollars in projects,” Cleary said.
“When I think about electric buses, when I think about rapid transit, when I think about Cogswell, we’re talking about massive amounts of public money and I can’t imagine those projects can continue — or the ones that haven’t started yet, start — without the kind of documentation and plan that we are we’re hoping and and frankly requiring from governments today.”
Cleary moved for a staff report “on (1) developing a comprehensive risk assessment process for planning significant capital projects and (2) developing policy related to significant capital project files.”
That motion passed.