Risky business inside Washmill underpass report

Auditor general isn’t mad, just disappointed

It was a “perfect storm” of failures that lost the municipality $11 million in building the Washmill Lake underpass.

Yesterday, auditor general Larry Munroe presented his 129-page report to the city’s audit and finance committee. It was the culmination of a two-year long investigation into the Bayers Lake capital project.

While Munroe—at great length—detailed the galaxy of irresponsibilities that caused millions in overages, he made sure not to name any names. “We’re looking to polish stones, not throw stones.”

From Butts' presentation to the audit and finance committee.
From Butts' presentation to the audit and finance committee.

The $16-million Washmill Lake underpass, which provides a third entry and exit to the BLIP, opened in December, 2011. The project’s millions over budget. Gloria McCluskey has labeled it “the biggest boondoggle in HRM’s history.”

Original estimates put the construction at $5.8 million. “A figure apparently pulled from someone’s ass,” news editor Tim Bousquet wrote in 2011. A new estimate of $10 million was pulled-out-of-ass once federal funding was floated. It’s been assumed the project was only $6 million over budget, but Munroe’s report (which goes back to 2008) says the overage works out to almost twice that, at $11,676,884.

The auditor general’s office found improper documentation, a lack of peer review, and little accountability or risk assessment while investigating what went wrong. All of them ideas that “seem so obvious but are so powerful.” Time and again Munroe said he heard from those involved that they didn’t know who was responsible.

It was a failure of structure and systems, Munroe said. A risky project that proceeded too quickly with a lack of clarity and accountability. But, he also admitted to reporters that the buck stops with the CAO. Former CAO Wayne Anstey—who neglected to inform council about overruns for six months—was too ill to participate in the investigation. Anstey’s predecessor, Dan English (who first approved an $8-million tender for the project without council’s input) provided what information he could.

After years of investigation and hundreds of pages, Munroe boiled the problem down to two central problems; Halifax’s overall approach to governance and accountabilities, and the city’s “lack of approach” to identifying and managing risks. The latter made Munroe repeat his call for HRM to install a “higher level of risk management” by creating a risk management officer.

On that point, CAO Richard Butts disagrees. He told reporters after the meeting that the city has improved its risk management, which negates creating a risk management office.

“We have somebody who works in risks,” Butts said.

Other recommendations from the auditor general include making it clear to current and future CAOs they have total responsibility for oversight of HRM, implementing a formal “cradle-to-grave” project management methodology, and changing Regional Council reports to include the original budget, any increase (listed by date) and the revised total for capital projects.

The auditor general’s report was finished in May of last year, but not released until yesterday after the AG’s office realized they had no documentation of the province taking possession of the road or completing a final inspection. Munroe noted Butts was dealing with this issue as late as Tuesday evening. The delay had one benefit, as Butts claims 75 percent of the report’s recommendations have already been implemented.

There wasn’t much time for questions yesterday, as the committee (and reporters) wanted time to study the report. Mike Savage did deliver some quick praise to Munroe for offering a roadmap in avoiding future mistakes.

“This is evidence of why we’re well-served by having an auditor general.”

The audit and finance committee, council, media and the public will have a few weeks to digest the report before Munroe returns at the next committee meeting to field questions.

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