”Findings and Recommendations”
The Department of Design and Construction was established by the 1998
reorganization to centralize the City’s construction function. At the
close of FY 2002, the department managed over 1,000 ongoing projects
and construction contracts totalling $579 million in value.
The objective of this in-house audit by the Office of Council Services
was to assess the management of capital projects by the department and
develop recommendations to address any weaknesses identified.
*1. The Department Manages Its Projects in an Ad Hoc Manner. Policies and procedures for managing projects have not been established, resulting in questionable change orders, inconsistent project oversight, and problems for client agencies.
Recommendation: the department should adopt written policies and
procedures on project management, provide training, and monitor
compliance. The policies should minimize change orders during
construction, require the work authorized pertain to the project, and
preclude change orders after project completion. The department
should consider enabling a single project manager to oversee all
phases of a project through completion. The policies should also
define the role of client agencies in approving project plans and
designs.
*2. The Department’s Project Information is Incomplete and Inaccurate.
Incomplete and inaccurate information in the department’s project
files and in reports on capital projects hinders project oversight by the department, City Administration, the Council, and the public.
Recommendation: the department should establish written policies and
procedures controlling project documents and controlling record
keeping by both employees and contracted project managers. Project
files should include a project summary identifying all project
managers and other participants, initial budgets and timetables, current
status, appropriations and expenditures to date, and all required studies
for the project.
”Agency Response”
The Department of Design and Construction generally agreed with our
report. However, it maintained that it was not responsible for budgeting
capital projects, approving change orders, selecting project consultants,
and reporting project status or expenditures. It also stated that it does
hold consultants responsible for any errors or omissions. We stand by
our report.
*3. The Department’s Workload, Coupled with the City’s Appropriation Deadline, Leads to Rushed Plans, Impaired Bids, and Unnecessary Change Orders.
The heavy workload has delayed the start of work on each year’s new
projects, so design work is rushed, plans and specifications go out to
bid that are incomplete or contain obvious errors, consultants are not
held responsible for mistakes, and ad hoc methods are used to prevent
funds from lapsing.
Recommendation: Construction funding should be budgeted in the
year following the budgeting of planning and design funding,
consultants should be held responsible for their work, and the City
Administration should exercise its existing budget allotment authority
to match project workload to the existing project management
resources.
*4. The Department Failed to Provide Complete and Accurate Information for this Audit.
During this audit, departmental staff denied current involvement with
the projects audited even though documents, client agency staff, and
written approvals of contract amendments showed otherwise.
Requested information was denied to the auditor and official City
project documents were discarded.
Recommendation: The department should adopt a policy ensuring
auditors have access to all files, records, staff, and contractors, that
employees and contractors are familiar with laws and policies relating
records tampering, records retention, and audits, and that serious
consequences result for employees and contractors who violate those
laws and policies.
”’Audit reports of the Office of Council Services (OCS) are available at the City Clerk, City library, state library, state archives, and the University of Hawaii library. An electronic copy of the report is also published on the OCS audit section Web page:”’
https://www.co.honolulu.hi.us/council/ocs/audit