Part 10: Improving project management

10.1
In this Part, we discuss:

• how local authorities and the sector have responded to the poor project management of the 2006-16 LTCCPs; and
• how project management has improved for the 2009-19 LTCCP.

Summary of our findings

10.2
Local authorities recognised the need to improve their project management when preparing for the 2009-19 LTCCPs. Our audit of the 2009-19 LTCCPs found that project management processes had significantly improved, which paid off at the final development and audit stages of the LTCCP process.

10.3
However, some local authorities continued to set optimistic time frames that they could not achieve.

Responses to poor project management of the 2006-16 LTCCPs

10.4
When preparing their 2006-16 LTCCPs, local authorities were not good at project-managing the process.⁷⁰ In fact, poor project management was a primary cause of many of the other issues – such as poor communication with communities and lack of clarity about financial strategies – that we identified in our audit of the 2006-16 LTCCPs.

10.5
In our view, there were two main reasons for the poor project management:

• a lack of appreciation for the size of the LTCCP project; or
• a conscious decision by the local authority to place minimal emphasis on the LTCCP process.

10.6
After the 2006-16 LTCCPs, the sector recognised the need to address the project management issues that had significantly affected the preparation of the 2006-16 LTCCPs. The issues were considered extensively by SOLGM and good practice guidance on the issue was included in its 2009 and Beyond guides. These guides were produced to help local authorities prepare for the 2009-19 LTCCPs.

The effect of SOLGM's guidance on the 2009-19 LTCCP process

10.7
SOLGM was very clear about the importance of addressing the project management weaknesses that had such a significant effect on preparing the 2006-16 LTCCPs. Their guide Living Through the LTCCP: Managing a Long Term Planning Process under the Local Government Act 2002⁷¹ was the first of the 2009 and Beyond guides to be released.

10.8
This guide was made available in August 2007 to reinforce the need for local authorities to begin preliminary project planning between mid- to late 2007. Preliminary project planning was expected to include establishing a project management team and an initial assessment of the review work that would be required to produce the 2009-19 LTCCP.

10.9
Living Through the LTCCP provided wide-ranging guidance on how to effectively manage the LTCCP project. The guide focused not only on processes and time frames but also provided guidance on developing the right culture in the local authority.

10.10
Having the right culture is important so that the process is properly understood and valued by elected members, senior management, and other local authority staff. The guide also helped to clarify the people and resource needs of the LTCCP project, including job descriptions for the key project roles. The guide also used some examples of effective approaches from the 2006-16 LTCCP process.

What the self-assessments showed us

10.11
As part of the early stages of audit planning for the 2009-19 LTCCP, appointed auditors asked local authorities to complete a self-assessment. Self-assessments provided detail on how local authorities were using SOLGM's guidance. Most local authorities completed the self-assessment between May and August 2008. We were pleased to see evidence in the self-assessments that a significant proportion of local authorities were using SOLGM's guidance to help their LTCCP preparations.

10.12
Many local authorities specifically applied the 2009-19 Health Check tool that was included in the Living Through the LTCCP guide. This tool was designed to help local authorities assess their readiness for the 2009-19 LTCCPs. It was also designed to help identify any weakness and who needed to take action, and by when, to address the weakness. Whether or not local authorities used the 2009-19 Health Check tool, a significant amount of planning was completed much earlier and in a more robust manner for the 2009-19 LTCCPs than for the 2006-16 LTCCPs.

10.13
SOLGM's guidance strongly emphasised that a crucial success factor for the LTCCP project is the active participation, from an early stage and throughout the project, of elected members. This is important because the elected members are the ones who are held to account by the community for the decisions recorded in the LTCCP. Therefore, it is essential that the LTCCP reflects the policy position of the elected members and that management works effectively with them to ensure that they understand the implications of their decisions.

Project management for the 2009-19 LTCCPs

10.14
We found a significant improvement in the effectiveness of LTCCP project management for the 2009-19 LTCCPs. We attribute the improvement to:

• SOLGM's guidance for the sector;
• increased commitment by local authorities to producing effective LTCCPs;
• knowledge gained from developing the 2004-14 and 2006-16 LTCCPs; and
• elected members and senior management showing a developing awareness of the value of, and need to improve, long-term planning.

10.15
We also acknowledge that elected members and senior management appeared much more committed to, and involved in, the process. One experienced observer told us that local authorities had a greater "maturity" in acknowledging the importance of long-term thinking. We concur with this view.

10.16
Overall, local authorities:

• started planning earlier;
• established formal project management teams, placing less reliance on one individual;
• created project plans that appropriately sequenced preparing and developing components of the LTCCP;
• set realistic timelines; and
• planned to prepare the LTCCP with more effective interaction with elected members.

10.17
We found that in practice the improvements made at the project planning stage paid off at the crucial final development and audit stages of the LTCCP process. Overall, the sector performed significantly better in 2009 than in 2006, particularly with delivering the Statement of Proposal for audit in line with agreed project timelines and to a reasonable quality. But we also noted that some local authorities continued to plan using overly optimistic time frames that they could not achieve.

Evidence of improvement found in audit management reports

10.18
We reviewed the audit management reports issued to local authorities by their appointed auditor after the completion of the Statement of Proposal and final LTCCP. These reports mainly covered technical issues related to components of the LTCCP but also addressed, where relevant, issues related to project management.

10.19
We noted that at least 30 local authorities were specifically commended by their appointed auditor for good or significantly improved project management. There were also more than 10 local authorities where the appointed auditor commented on how increased involvement with, and commitment to, the LTCCP project by the local authority's senior management team and elected members improved project management.

10.20
Although these numbers may appear low given that there are 85 local authorities, we consider that the audit management reports strongly support our observations about improvement. This is because there was no requirement for appointed auditors to report to local authorities on successful project management. Therefore, we expect that there could be other local authorities that made project management improvements that were not identified in audit management reports.

Difficulties with meeting deadlines

10.21
Even though project management has improved, we note that some local authorities still had difficulties in project managing the 2009-19 LTCCP process. There were a number of local authorities that planned well but did not deliver on their timelines and did not carry out planned quality assurance before providing draft Statements of Proposal to their auditor. This meant that completing the Statement of Proposal and the related audit process was problematic. In some cases, the statutory deadline was breached and there were additional audit costs (see Part 12 for more detail on timeliness of LTCCPs, and audit fees).

10.22
Other local authorities were unable to adhere to certain parts of their project plans. Preparing an LTCCP is one of the largest, if not the largest, tasks a local authority carries out during its elected members' term. Therefore, ongoing efforts to refine project management of the process will be required, even for those local authorities whose 2009-19 LTCCP projects were considered successful.

10.23
We note that 13 local authorities received audit management reports from their appointed auditors that detailed serious project management failures. These failures significantly affected the quality and timeliness of their draft Statements of Proposal and preparation of other important underlying information.

10.24
In our view, many of these 13 local authorities experienced unforeseen issues such as staff changes or unexpected reactions to the development of the issues for debate. For these local authorities, any contingency time built into the project plan was not enough to manage such problems.

10.25
However, some local authorities are still not committed to preparing their LTCCP. These local authorities are carrying out the LTCCP process to achieve only minimum compliance with their statutory obligations. As long as this attitude remains, it is inevitable that these local authorities will not complete the LTCCP using effective project management principles. In the long run, it is communities that are most affected by local authorities' failure to effectively project manage the LTCCP process and produce a quality LTCCP.

Preparing for 2012

10.26
The LTCCP process is a very large project. Local authorities need to be fully committed to the project if it is to be completed effectively.

10.27
Commitment must come from all levels of the local authority – including the elected members. Therefore, it is very important – for future LTCCPs – that each local authority completes a thorough debrief of the 2009-19 LTCCP process, actively addresses any weaknesses identified in their processes, and looks for ways to reinforce and share those aspects that worked well, both through the many parts of the local authority involved in preparing the LTCCP and with other local authorities.

70: Matters arising from the 2006-16 Long-Term Council Community Plans, pages 6 and 44-46.

71: Released by SOLGM in August 2007 and available at www.solgm.co.nz.