Project Health Checks & Financial Audits

Nunavut Community and Government Services (CGS) works in partnership with community governments and assists them in building their capacity so that they can meet the needs of their residents. They provide programs and funding that support core municipal operation, infrastructure development, and land development. Support is provided to ensure training for councils and municipal employees is available.

Procept was hired to perform a construction project management and a financial audit on the Arctic Bay Airport Project to investigate the courses of project management actions and investigate financial records that resulted in the after-the-fact approximate $3-5 million budget overrun.

Subsequently, Procept was hired to perform project management and financial audits of each of the four Regional Offices of CGS (Pond Inlet, Iqaluit, Rankin Inlet, and Cambridge Bay) to examine project management and financial records for recent capital projects and compile a final report on the present project management maturity of CGS.

Approach

The airport audit focused on project management processes, procurement processes, decision making process, communication processes, and project control processes. This audit was accomplished by reviewing and comparing:

• The project management processes and actual actions used on this project by those in charge of managing the project;
• The Financial Administration Act of the Government of Nunavut;
• Standard written project management processes of the Government of Nunavut;
• Standard project management practices as defined by the Project Management Institute;
•  Job descriptions of the Government of Nunavut staff who were involved in the project;
• The site inspection engineering consulting agreement and construction contract documents.

When reviewing the above processes and documents, the main focus was on:

• The project management process that led to the design that was implemented. This investigation did not address technical issues such as suitability of the design; this should be the subject of another, technical investigation which may involve an engineering consultant and/or NAPEGG. This investigation would review the design for its suitability and establish the appropriateness of the technical solution that was implemented on site.
• The procurement process that was used to select the design consultant and the construction contractor, including selection of the construction contract type.
• The decision making process by the Government of Nunavut staff.
• The communication process between the project team and key project stakeholders.
• Project control processes (scope, quality, schedule, cost, risk).

The project management and financial audits of the four Regional Offices focused on comparing records against best practices to achieve the following:

• Identification of project management weaknesses and issues;
• Identification of financial weaknesses and issues;
• Highlight possible issues for follow up at a later date;
• Complete separate reports for the project management audits and financial audits for each of the four regional offices;
• Findings should include observations and, where possible, the identification of contributing factors to issues identified; and
• Recommendations should include any process revisions, procedural changes or training requirements that may be viewed as desirable or necessary.

Results

The results of the audits and recommendations were published in a report – “Planning for the Future: Infrastructure Development CGS Financial and Project Management Audits”. The full report can be requested from the government as it is a public document. Procept was hired in 2010 to implement the recommendations in the Report.

Challenges and corrective actions

The major challenge encountered was gathering of data and interviewing staff involved in the over the budget projects due to the fear of job loss. The corrective action was to establish credibility through the project sponsors that this project was strategic in nature focused on improving organizational performance in the long run than pointing fingers on individuals.