Part 3: What we found
3.1
In this Part, we outline our findings for each of the three projects we looked at.
Bus Interchange
3.2
We found that the Bus Interchange project had strong governance arrangements. These arrangements have helped to successfully complete the project on time and within budget. The Bus Interchange is now open and fully operational.
3.3
The main features we identified that brought strength and success to the governance arrangements for this project include:
- putting time and effort into the design and implementation of the governance and management structure so that they were clear and fit for purpose – CERA told us that it drew from a wide base of information and professional advice for its governance design;
- a culture of review and continuous improvement within CERA, which has resulted in ongoing improvements to the governance arrangements;
- appointing an independent chairperson to the Project Steering Group; and
- making communication with other projects part of normal business – making it easier to manage mutual dependencies with other projects.
New Central Library
3.4
In December 2014, we found that the New Central Library project had little effective governance. The Project Control Group was acting in a management role and was not providing the leadership and oversight that we expected to see. We found that roles and responsibilities were unclear and that project risks were not reported and managed well.
3.5
In our view, the Project Control Group was not managing two important risks appropriately:
- the risk that the proposed design for the new Central Library was not affordable within the approved budget; and
- the risk that $10 million of philanthropic funding that the project depends on might not be secured.
3.6
Not managing these risks appropriately exposed the project to a significant risk that it would not be completed successfully.
3.7
At the time of our audit, the Council reviewed the project's governance and management arrangements. After considering our initial findings, together with its own review, the Council made some changes to the governance arrangements for the New Central Library project.
3.8
The new arrangements include:
- introducing a Project Steering Group that has a clear project governance role;
- appointing an independent chairperson to the Project Steering Group;
- appointing an experienced Development Director to lead the project; and
- making improvements to reporting.
3.9
We visited the Council in October 2015 to find out how the new arrangements were working. We observed a Project Steering Group meeting, interviewed members of the Project Steering Group, interviewed some Council managers, and reviewed some documents.
3.10
The new Project Steering Group has been in place only since August 2015 and has had limited opportunity to show its effectiveness. However, based on the work we did in October 2015, we are satisfied that the new arrangements are a definite improvement on the arrangements we saw in December 2014. We found more clarity around the project governance arrangements, improved reporting, and a separation of governance and management.
3.11
We also found that the Council had taken steps to manage the funding and affordability risks. The funding risk, in particular, remains, but the steps taken have reduced the risk of the project not being completed successfully.
Acute Services Building
3.12
We found mixed results for the Acute Services Building project. The HRPG has a clear purpose and brought strong leadership to the project, which has made good progress as a result. The HRPG has achieved this even when the two main partners, the Ministry and the DHB, have had conflicting views.
3.13
However, we also found a lack of clarity about, and understanding of, accountabilities for the project. Also, the roles and responsibilities of the main partners were unclear and not well recorded. The HRPG's strong leadership has compensated for this to some extent.
3.14
This report includes some findings about the lack of clarity in the governance arrangements for the Acute Services Building. Because this large and complex project uses a new governance model and the relationship between the two main partners is poor, clear definitions and protocols are particularly important. These definitions and protocols were not put in place.
3.15
The new governance arrangements are similar to those used in other parts of the public sector. For example, the Ministry of Defence leads the procurement of major defence capabilities on behalf of the New Zealand Defence Force.
3.16
We expected to see the Ministry look at how the arrangements work in other sectors to help it set up the new arrangements in Canterbury, but we saw no evidence of this.
3.17
The Ministry has identified a programme of work to strengthen the governance arrangements for this project, which addresses some of our findings. This work is at an early stage.