Major capital investment in councils. Good practice checklist for project managers

Transcription

1 Majr capital investment in cuncils checklist fr prject managers Prepared by Audit Sctland March 2013

2 b The Accunts Cmmissin The Accunts Cmmissin is a statutry, independent bdy which, thrugh the audit prcess, requests lcal authrities in Sctland t achieve the highest standards f financial stewardship and the ecnmic, efficient and effective use f their resurces. The Cmmissin has fur main respnsibilities: securing the external audit, including the audit f Best Value and Cmmunity Planning fllwing up issues f cncern identified thrugh the audit, t ensure satisfactry reslutins carrying ut natinal perfrmance studies t imprve ecnmy, efficiency and effectiveness in lcal gvernment issuing an annual directin t lcal authrities which sets ut the range f perfrmance infrmatin they are required t publish. The Cmmissin secures the audit f 32 cuncils and 45 jint bards and cmmittees (including plice and fire and rescue services). Audit Sctland is a statutry bdy set up in April 2000 under the Public Finance and Accuntability (Sctland) Act It prvides services t the Auditr General fr Sctland and the Accunts Cmmissin. Tgether they ensure that the Scttish Gvernment and public sectr bdies in Sctland are held t accunt fr the prper, efficient and effective use f public funds.

3 Cntents Abut this checklist... 4 Visin and directin... 5 Planning... 8 Executin Measuring and mnitring Business acceptance Majr capital investment in cuncils Page 3

4 Abut this checklist The Accunts Cmmissin, as part f its plicy f encuraging imprvement, seeks t supprt develpments in best value and resurce management, recgnising these as tw key cmpnents vital t the successful delivery f cuncil services. Our audit 'Majr capital investment in cuncils' published in March 2013 assessed hw well investment is directed, managed and delivered within cuncils. It cnsidered the perfrmance f a large number f recently cmpleted majr capital prjects against time, cst and quality targets. It als reviewed the apprpriateness f cuncils' capital prgramme management arrangements. The audit included recmmendatins t help cuncils imprve in this. T help cuncils make imprvements where necessary, the Accunts Cmmissin als published a gd practice guide, as part f the Hw cuncils wrk series. The guide included a set f questins, largely aimed at elected members, t supprt and prmte effective scrutiny and challenge f majr capital prjects and prgrammes. This checklist supplements the gd practice guide. It prvides a detailed self-assessment checklist - aimed at prject managers rather than elected members - t prmte detailed review and reflectin and, if necessary, a basis fr imprvement. Audit Sctland riginally prepared this checklist in cnnectin with its 2008 reprt, Review f majr capital prjects in Sctland. This cncerned the wrk f central gvernment and health bdies nly. We have tailred this versin f the checklist s that it refers specifically t cuncils and may be used in a cuncil cntext. All Audit Sctland reprts are available n ur website: Page 4 Majr capital investment in cuncils

5 Visin and directin statement Strategic alignment The cuncil and senir management team have priritised prjects accrding t the cuncil s strategic pririties. Each prject is established t supprt achievement f these pririties. The Senir Respnsible Owner (SRO) has a clear visin f what the future state lks like and clearly defined the prject bjectives and ensured that they align with the strategic bjectives f the cuncil. The SRO and senir management team is clear abut and has dcumented hw the prject will affect and, where relevant, imprve peratinal activities. The impact f wider plans t redesign services n the prject delivery plan is reviewed n a regular basis, and vice versa. Business case Respnsibility fr wning and champining the business case prcess (Strategic Business Case, Outline Business Case, Full Business Case) is clearly allcated t the Senir Respnsible Owner (SRO) The business case describes what the value is t the cuncil frm the utcmes f the prject, dcumenting: Optins have been identified and assessed Majr capital investment in cuncils Page 5

6 statement Business case (cntinued) Prject prcurement rutes and ptins are fully explred, market tested and frm part f the develped business case The cuncil is clear abut the benefits expected and abut hw these will be achieved. Prject csts are built-up in a cnsistent manner, including specific risk and ptimism bias allwances and realistic cnstructin inflatin csts. The cuncil has sught review f csts by a skilled individual / team withut any stake in the numbers, and any issues that have been identified have been addressed. There is clear understanding f the different purpse and requirements f each stage f the business case prcess. The stakehlder (including funders) apprval prcess is utlined within the business case, and their expectatins f benefits t be realised has been apprpriately managed. The business case has cnsidered emerging service changes and changes within the business envirnment and hw they may affect the prject. Page 6 Majr capital investment in cuncils

7 statement Spnsr cmmitment The business case is reviewed thrughut the lifecycle f the prject, t help test that any changes affecting it are justified, prvide value fr mney and t help reinfrce prper reprting and accuntability. The business case is fully cmmunicated t relevant stakehlders. The SRO has assurance that the Prject Spnsr has: the mst apprpriate knwledge, credibility and senirity t influence the key stakehlders sufficient resurces t discharge their bligatins The successful delivery f the prject is linked t the spnsr s persnal perfrmance metrics, with a successful utcme being pre-agreed by the SRO and apprved by the cuncil. Majr capital investment in cuncils Page 7

8 Planning Gvernance Each prject shuld have an identified investment decisin maker, Senir Respnsible Officer (als knwn as Prject Owner) and Prject Spnsr. There are clear and dcumented rles and respnsibilities fr SRO, Prject Spnsr, Prject Manager, including rle descriptins, delegated authrities, cuncil structures. The SRO is the senir individual with accuntability fr delivery f the prject within budget. The SRO has appinted a Prject Spnsr, where apprpriate experience is required The SRO has cnsidered and apprved the prject gvernance, dcumented rles and respnsibilities and delegatins f authrity are effectively cmmunicated. This includes: Clear identificatin f the management structure and decisin making prcess within the prject Prcess fr escalatin f issues t the Page 8 Majr capital investment in cuncils

9 Gvernance apprpriate frum, where decisin making will (cntinued) be made n the actin required t address them Fr Prject Bards, there are clear terms f reference, accuntabilities and decisin-making criteria. The Prject Bard is chaired by the SRO and attended by all stakehlders invlved in the prject Senir stakehlders within the public bdy require high levels f fcus and assurance n majr prjects in rder t take actin t reduce the ptential negative effects. These stakehlders include Cmmittees (including Audit), Bards, senir management and Heads f Internal Audit. Fr these stakehlders, there is evidence that: All majr prjects and prgrammes are under cntrl and risks are being managed in terms f delivery n time and t specificatin, within budget and the benefits riginally intended All prjects in prgress will have a measurable impact in supprting achievement f strategic bjectives Where the prject crsses rganisatinal bundaries, there are clear gvernance arrangements in place t ensure sustainable alignment with the crprate Majr capital investment in cuncils Page 9

10 bjectives f all rganisatins invlved. Risk management The requirement fr independent review and challenge f the prject t prvide assurance that the prject cntinues t be effective has been defined and apprved. Specifically, the audit cmmittee has cnsidered what degree f independent assurance and challenge it requires with regards t individual prjects. The cuncil has determined its risk appetite, cnsidering the acceptable levels f risk in strategic, financial, peratinal regulatry and reputatinal terms, and it uses the results t infrm the management f risks. The prject s risk prcesses are cnsistent with the cuncil s risk framewrk and reprting f risks is a twway prcess (tp dwn and bttm up) between the prject and the cuncil. Discussins abut the level f prject risk are undertaken at prject spnsr level, and with peers in the cuncil. The prject risk management framewrk is embedded within the day-t-day prject prcesses, such as a cnstraints, assumptins, risks, dependencies and issues lg. Page 10 Majr capital investment in cuncils

11 Risk management (cntinued) Prcurement strategy The Prject Bard has established and agreed tlerances fr cst, time and quality fr the prject and has established clear escalatin levels shuld the level f risk be utside f agreed limits. The cuncil has defined its prcurement strategy within which the Prject Bard must manage the prject s prcurement remit. Discussins are held n tendering and cntractual ptins, t ensure risks and ptential pprtunities f each are understd thrughly. The prject s prcurement rute reflects infrmed knwledge f the market and ensures an attractive apprach fr the market place is chsen. The prcurement strategy is cnsistent with the agreed cuncil s Risk Strategy. Majr capital investment in cuncils Page 11

12 Executin Prject management As an infrmed client the Prject Spnsr appints a suitably experienced and qualified prject manager either frm within the cuncil r externally after the agreement f the high level business case/ mandate. During initiatin f the prject, the prject manager shuld be invlved, but at a lwer level f imprtance t the SRO and prject spnsr. Hwever nce the prject mves int the planning phase, then the prject manager takes n mst f the respnsibility fr that element f the prject. The prject plan has a direct relatinship with the business case and verall strategy f the cuncil. The prject plan is brken dwn int manageable wrk streams and relevant prject milestnes that are meaningful t the Prject Bard t allw accurate and frequent prgress tracking and maximise visibility f inter-dependencies. An analysis has been undertaken f the effects f any slippage in time, cst, scpe r quality. Page 12 Majr capital investment in cuncils

13 Prject management (cntinued) Critical path activities identified, and used as a base timeline fr ther activities and interdependencies t reprt against. Allwance fr planning time and stepping back and fully assessing interdependencies. There is cnsistent applicatin f a recgnised prject management methdlgy which is scalable, flexible and embedded in the culture f the cuncil The prject team has develped a resurce plan fr the duratin f the prject, s as t infrm the Prject Bard n future and n-ging resurce requirements. There is an identified change strategy which defines prject change prcesses with escalatin and apprval pints. Independent prject assurance reviews are carried ut by the cuncil and/r external parties at key milestnes. Prcurement The prcurement rute fr the prject shuld be tailred t the specific nature f the facility, be it standard r bespke, and incrprate benefits t be delivered by the cntractr. Cmmercial expertise / specialism is brught t bear t ensure ptimal cmmercial cnditins are fstered during prcurement, and that cmmercially apprpriate Majr capital investment in cuncils Page 13

14 terms are used in cntracts e.g. change cntrls. The Prject Bard is infrmed by an suitably knwledgeable prject manager wh can demnstrate understanding f the capacity and capability f the market. Key risks generated thrugh the chice f prcurement rute and cntract type are identified and added t the risk register fr management thrugh the risk prcess. Resurces Cnsistent cst estimating prcesses are used t develp and maintain prject cstings Cntingencies have been identified and verlaid n base csts t allw fr knwn risks, unknwn risks, verhead and ptimism bias. A change management prcess is in place and fit-fr purpse t address any versights. The prject scpe and finances are develped in detail prir t authrisatin t spend is sught. Accunting systems have been set up t reflect the data required t track csts and billings by wrkstream line item The prject team has sufficient allcated resurces and Page 14 Majr capital investment in cuncils

15 Resurces the necessary skills t achieve the prject bjectives (cntinued) successfully. The Prject Bard and the prject team have access t relevant specialist expertise as required thrughut the lifecycle f the prject. Perfrmance f prject team is incentivised e.g. annual perfrmance measures, t align individual expectatins with the gals f the prject. Majr capital investment in cuncils Page 15

16 Measuring and mnitring Prject management As an infrmed client the Prject Spnsr appints a suitably experienced and qualified prject manager either frm within the cuncil r externally after the agreement f the high level business case/ mandate. During initiatin f the prject, the prject manager shuld be invlved, but at a lwer level f imprtance t the SRO and prject spnsr. Hwever nce the prject mves int the planning phase, then the prject manager takes n mst f the respnsibility fr that element f the prject. The prject plan has a direct relatinship with the business case and verall strategy f the cuncil. The prject plan is brken dwn int manageable wrk streams and relevant prject milestnes that are meaningful t the Prject Bard t allw accurate and frequent prgress tracking and maximise visibility f inter-dependencies. An analysis has been undertaken f the effects f any slippage in time, cst, scpe r quality. Critical path activities identified, and used as a base Page 16 Majr capital investment in cuncils

17 Prject management (cntinued) timeline fr ther activities and interdependencies t reprt against. Allwance fr planning time and stepping back and fully assessing interdependencies. There is cnsistent applicatin f a recgnised prject management methdlgy which is scalable, flexible and embedded in the culture f the cuncil The prject team has develped a resurce plan fr the duratin f the prject, s as t infrm the Prject Bard n future and n-ging resurce requirements. There is an identified change strategy which defines prject change prcesses with escalatin and apprval pints. Independent prject assurance reviews are carried ut by the cuncil and/r external parties at key milestnes. Prcurement The prcurement rute fr the prject shuld be tailred t the specific nature f the facility, be it standard r bespke, and incrprate benefits t be delivered by the cntractr. Cmmercial expertise / specialism is brught t bear t ensure ptimal cmmercial cnditins are fstered during prcurement, and that cmmercially apprpriate terms are used in cntracts e.g. change cntrls. Majr capital investment in cuncils Page 17

18 The Prject Bard is infrmed by an suitably knwledgeable prject manager wh can demnstrate understanding f the capacity and capability f the market. Key risks generated thrugh the chice f prcurement rute and cntract type are identified and added t the risk register fr management thrugh the risk prcess. Resurces Cnsistent cst estimating prcesses are used t develp and maintain prject cstings Cntingencies have been identified and verlaid n base csts t allw fr knwn risks, unknwn risks, verhead and ptimism bias. A change management prcess is in place and fit-fr purpse t address any versights. The prject scpe and finances are develped in detail prir t authrisatin t spend is sught. Accunting systems have been set up t reflect the data required t track csts and billings by wrkstream line item The prject team has sufficient allcated resurces and the necessary skills t achieve the prject bjectives Page 18 Majr capital investment in cuncils

19 successfully. Resurces (cntinued) The Prject Bard and the prject team have access t relevant specialist expertise as required thrughut the lifecycle f the prject. Perfrmance f prject team is incentivised e.g. annual perfrmance measures, t align individual expectatins with the gals f the prject. Majr capital investment in cuncils Page 19

20 Business acceptance Change management Stakehlder management The Prject Spnsr ensures relevant stakehlder invlvement and buy-in t prject changes thrughut the prject relative t business case bjectives. The SRO manages the prject change prcess within the pre-agreed tlerance levels The prject team has develped a stakehlder map s as t identify stakehlder grups. The SRO and Prject Bard have dcumented and agreed hw stakehlders will be engaged e.g. ensure buy-in, vercme resistance t change, allcate risk t the party best able t manage it. A cmmunicatin plan has been agreed by the SRO, and is regularly updated s as t infrm stakehlders. Prject Spnsr cmmunicates with stakehlder grups n the achievement f prject bjectives. Lessns learned have been captured and shared acrss the cuncil fr future prjects, and have been raised with ther cuncils as apprpriate. Page 20 Majr capital investment in cuncils

21 2 Majr capital investment in cuncils checklist fr prject managers If yu require this publicatin in an alternative frmat and/r language, please cntact us t discuss yur needs. Audit Sctland, 110 Gerge Street, Edinburgh EH2 4LH T: E: inf@audit-sctland.gv.uk