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HomeMy WebLinkAbout2008-03-17 AUDIT COMMITTEE MINUTES MARCH 17,2008 CITY OF KITCHENER The Audit Committee met this date commencing at 5:05 p.m. Present: Mayor C. Zehr - Chair and Councillors J. Smola, B. Vrbanovic, K. Galloway, G. Lorentz and C. Weylie Staff: C. Ladd, Chief Administrative Office R. Browning, General Manager, Development & Technical Services & Fire Chief D. Chapman, General Manager, Community Services G. Murphy, Director of Engineering R. Gosse, Committee Administrator 1 . DTS-08-043 - Enaineerina Audit The Committee was in receipt of Development & Technical Services Department report DTS-08- 043 dated March 11, 2008 regarding the audit of engineering projects. Attached was the report submitted by MMM Group dated December 2007 titled 'Engineering Audit Report - Engineering Audits: Victoria Street Reconstruction and Joseph/Gaukel Streets Reconstruction Projects'. Mr. G. Murphy advised that in 2002 and 2003 the City undertook two projects in the Downtown area: Victoria Street and Joseph/Gaukel Streets Reconstruction: which included the conceptual and detail design and contract administration for the Victoria Park Entrance. Both projects were complex with many issues and City staff faced many challenges including scheduling and costs. Mr. Murphy further advised that in June 2007 the City retained MMM Group Ltd to undertake an independent review of the processes and methodologies used for the two projects with the intent to better understand the issues and problems with the projects and to look for improvements which could be made for future projects. Mr. Tom Chang, P. Eng., Manager of Project Management for MMM Group Limited gave a presentation highlighting the audit framework, the project management context, the summary of findings from the audit and conclusions and recommendations. Mr. Chang advised that for purposes of this audit the City's processes were evaluated under the framework identified by the Project Management Institute and the Project Management Body Of Knowledge (PMBOK). Within context of PMBOK the audit focused on 5 areas: site management and monitoring; soil testing; cost estimating; risk management; and, consultant selection. Mr. Chang briefly reviewed the 5 focus areas and outlined the following opportunities for improvement: · Clearly defined expectation regarding the required project management and environmental management scope of services by the successful consultant; · Clearly define the expected deliverables over project life cycle; · Consider implementing a two-envelope Request For Proposal submission process; · Consider applying a contingency in budgets appropriate to the level of information that was available to develop the estimate; · Consider using a formalized reporting process that would provide early identification of significant changes to established project baselines; · Consider requiring more frequent and formal reporting on project costs and schedule status by the project manager; · Consider developing a standard reporting template that would improve internal reporting consistency; · Standardized document filing and retrieval procedures; · Specify in the Expression of Interest that environmental site assessments be supervised by qualified person; · Allow adequate lead time in the construction schedule to complete required environmental investigations; · As part of the Expression of Interest a materials management plan be required as a project deliverable; · Consider incorporating risk management planning and monitoring on future complex projects. AUDIT COMMITTEE MINUTES MARCH 17,2008 - 4 - CITY OF KITCHENER Mr. Chang concluded his presentation adding that a lessons-learned process to transfer experience gained between projects would be extremely beneficial in developing better methodologies for these construction projects. Councillor G. Lorentz advised that there were several staff turnovers during these projects and asked whether this may have had a bearing on some of the challenges. Mr. Chang responded that staff turnovers are a risk of every project and with better documentation, knowledge and status of the project can be passed on to new staff members. Councillor B. Vrbanovic asked if risk management plans were common in other municipalities. Mr. Chang advised that risk management plans are typically done for complex projects and are not necessarily required for every project undertaken. Councillor C. Weylie pointed out that one of the challenges for both these projects dealt with environmental issues and she asked how the City could deal with this more effectively in the future. Mr. Chang advised that more time is required up-front when planning the project in order to assess the environmental risk to be addressed. Mayor C. Zehr asked if a two-envelope approach to the consultant selection was not being used for some Expressions of Interest. Mr. Murphy replied that currently for some projects there is a two-stage approach whereby consultants are short-listed but this is not necessarily considered to be what is referred to as a two-envelope selection process. Mayor Zehr asked in regard to risk management who would be expected to monitor the plan. Mr. Chang advised that it could be done in-house if the expertise exists, if not, then it would be part of the Expression of Interest that a consultant would undertake that portion of the plan. Mayor Zehr advised that the recommendation contained in the staff report directs staff to develop an implementation plan and he asked when that would be expected. Mr. R. Browning advised that staff have not yet discussed in detail the development of a plan suggesting that later this Fall would be appropriate. Councillor B. Vrbanovic pointed out that the implementation plan would identify what actions would be taken and when and not necessarily required the implementation of those actions therefore the plan should be developed sooner in order to address those actions that will benefit projects as early as this year such as better document control and the lessons-learned process. Mr. Murphy advised that staff could develop a matrix and identify time-lines and this could be completed by April/May of this year. On motion by Councillor B. Vrbanovic- it was resolved: "That Council receive the Engineering Audit Report for the Victoria Street Reconstruction and Joseph/Gaukel Reconstruction, dated December 2007, as prepared by the MMM Group and directs staff to develop an implementation plan for its recommendations." Councillor B. Vrbanovic requested that an annual report be developed and presented to this Committee regarding obligations of the City under various Acts showing if the City has met its obligations. Councillor Vrbanovic added that Wilfred Laurier University undertakes this exercise annually and it is helpful for members of the board. Mr. D. Chapman advised that staff would need to undertake a scoping exercise to develop the list of legislation and obligations and can report back to the Committee. 2. ADJOURNMENT On motion, the meeting adjourned at 5:38 p.m. R. Gosse Committee Administrator