Audit exposes poor planning and estimates in Waverley West

An audit into a massive road work project for the Waverley West subdivision is sprinkled with critical language such as "verypreliminary," "inadequate budget" and "not enough supporting documentation."

The work included a two-lane overpass that connected KenastonBoulevardwith Bishop GrandinBoulevard.

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The project was originally estimatedto cost $54.7 million and that number was submitted tothe federal government's Build Canada fund in June 2009. The final price tag for the work was $69.7 million.

The audit was ordered in December 2012 after city staff identified a potential $20 million short-fall in funds for the work. The final cost overrun was $15 million after the City of Winnipeg and the Province of Manitoba agreed to scale back some of the work.

The original $54.7 million cost was detailed in the city's2010 Capital Budget.But that number was what's referred to in the industry as a "Class 5 estimate."This type ofestimatehas anaccuracy of between 50 per centand +100 per centof the estimated amount. That variance of thatvery generalestimate was not outlined in the budget city council eventually approved.

The audit released today criticizes how the city's project managers arrived at a cost for the work.

"The $54.7 million estimate for the Project was very preliminary, does not have enough supporting documentation to verify how or when it was created, and does not appear to be based on the most detailed information available at the time."

Auditors also struggled with a lack of paperwork that backs upthe estimates.

"While we did obtain documentation for the $54.7 million estimate, the documents were of rough-draft quality, and prevented us from determining where or when the documents originated, or what methodology was used to create the estimate."

Better numbers were available

The estimate for the WaverleyWest project may have been vague, but the audit found better and more detailed projections were available through one of the developers ofthe subdivision. Those numbers could have been used when the city's project managers were planning, estimating costs and applying to the federal government for funding.

"Before the Building Canada Fund application was submitted, the Public Works Department had in its possession a credible, more detailed cost estimate of $62.5 million for the Project from one of the developers. Due to the lack of documentation for the $54.7 million estimate, we are also unable to conclude why this $62.5 million amount was not included in the Building Canada Fund application, rather than $54.7 million.

A press release from the City of Winnipeg, sent onFriday,sayssome of the changes called for in the audit have already been made, includingmakingestimates more accurate and improvingpolicy around major projects.

The city is reviewing and updating itsEstimate Classification System and, starting this year, all departments are required to include the project class estimate on all major work.