An audit of the most expensive infrastructure project in the City of Winnipeg’s history has concluded staff are following proper protocols but aren’t equipped to handle such a massive and complex undertaking.
A KPMG audit of the multibillion-dollar upgrade to the north end sewage treatment plant aimed to ensure cost control of the project and manage its risks.
It found room for improvement in terms of oversight, organization, financial control, risk management and other areas. It concluded city policies and procedures aren’t suited to such massive projects.
“Our staff has been doing what they’re supposed to do… but this project is the largest, most expensive, most complex project the City of Winnipeg has ever undertaken… and that requires a different governance structure,” said Mayor Scott Gillingham.
He said the audit calls on the city to boost oversight and ensure more staff are devoted to the upgrade full-time.
The mayor said he doesn’t believe a lack of oversight so far has caused the massive spike in the project’s cost over the past few years.
“The audit revealed that we need different oversight, not that we’ve been doing anything wrong,” he said.
The three-phase mega project is expected to cost at least $2.38 billion, though water and waste officials have warned that figure could rise to around $3 billion.
The project was once expected to cost $795 million, but the price has skyrocketed since 2017. A city report on the audit links the rising cost to delays, an increase in scope and inflation.
The audit lists dozens of recommendations and warns city procedures could “result in risk for further cost and schedule growth” if unchanged, writes Jason Egert, the city’s auditor, in a staff report.
The audit also calls for quicker reporting time frames to ensure prompt feedback from city council.
Gillingham said improvements could involve hiring additional external consultants and experts to support city officials.
“I believe it’s doable because we can look at other jurisdictions that have taken on projects of a similar size and scope and we can learn from them,” he said.
Coun. Evan Duncan, chairman of council’s water and waste committee, said it’s essential the city ensure at least one project team leader is devoted to working on the upgrade on a full-time basis.
“Right now, we’re having upwards, potentially, of $3 billion being spent over the next decade here and we need to ensure that those dollars are being spent wisely… (The) employees right now with the city … are at times doing this off the side of their desks,” said Duncan.
The councillor noted the audit didn’t find wrongdoing by city officials.
Key recommendations call on the city to assess cost performance each month, create an easy-to-use dashboard to better track outcomes, review the number of employees working on the project and develop a risk management plan that reflects the size and complexity of the upgrade.
KPMG warns the city could risk damage to its reputation, staff burnout and departures, further project delays and overruns and challenges in attracting bidders for the construction, if oversight falls short.
Duncan said he’d like to see changes implemented within the next two months.
In a written response to the report, water and waste officials say they will implement all of the audit’s recommendations. Steps to do so include seeking approval to add two temporary staff positions to the project and six more through consulting contracts. The city has also hired a consultant to help enhance its risk management plan.
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Joyanne Pursaga
Reporter
Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.
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