Irish News

Monday 28 July 2014

One-third of council projects are running over budget

Paul Melia Environment Correspondent

Published 22/02/2014|02:30

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finance budget calculation

ALMOST one in three capital projects undertaken by local authorities has run over budget, with major problems identified in how public money has been spent.

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A probe by the Local Government Auditor has found that 12 out of 41 projects examined last year were delivered above agreed funding levels, with concerns also raised about a "lack of oversight" by city and county councils.

Housing, waste, Traveller accommodation, regeneration projects, water and fire and emergency capital schemes were examined, totalling €356m.

"Compliance spot-checks" were completed on 41 capital projects, ranging in value from €500,000 to more than €30m.

The probe found:

  • There were procurement issues in 23 of the 41 projects, suggesting best value for money was not being achieved.
  • There was an "insufficient or no audit trail" in another 14, indicating a lack of documentation on how public money was spent.
  • Thirteen projects were delivered late, another 12 were over budget, and there were "tax clearance issues" in relation to three.
  • There was "no evidence" of approval from the Department of the Environment for tender documents for two projects.

"This is the fourth report on compliance spot-checks produced by the Local Government Audit Service and there has not been any significant improvement," the report says.

Issues included cost overruns and a failure to complete cost-benefit analysis for water schemes, with one unnamed wastewater project in Meath costing almost €70m, about €26m over budget.

Construction of a civic amenity site for household waste and recycling materials was completed at a cost of €901,000, around 44pc over budget. This was because of additional works and variations to the contract.

A spokesman for the Department of the Environment said that some of the projects did not comply with agreed budgets because additional works had been completed.

In other cases, projects had been started in the early 2000s when procurement rules were "very different" to those in place today.

"When many of the housing projects were being progressed, it was difficult to procure competent consultants including design teams and project managers for social housing projects because more lucrative work was readily available in the private sector," the spokesman explained.

'TRUSTED'

"As larger social housing projects were advanced on a phased basis, local authorities tended to retain the services of known and trusted consultants to undertake subsequent phases of projects rather than risk taking on new firms where social housing had a low priority."

He said the department had expressed "serious concern" about projects going ahead without competitive tendering to secure best value.

The Government has since put in place new rules obliging government departments to conduct a cost-benefit analysis on any project costing €20m or more, down from €30m, which had to be approved by the Department of Public Expenditure and Reform before funding was provided.

Irish Independent

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