Mercury Bay Multi Sport Park Deloitte Report 20 February 2013 A special investigation by Deloitte, an Independent business risk and audit company, reviewing the Mercury Bay Multi Sport Park has been released by Council Deloitte Report Released Deloitte was commissioned in October by Council's Audit Committee following a request in September to Council to approve an extra $1m to complete the complex. (This cost included more than $583,000 spent between 2004 and 2010 investigating suitable sites for the development and around $400,000 in build overruns). There had also been a growing sense of unease around the build of the complex build by the new project team, which came in under Councils restructure late last year. In December 2012, Deloitte presented an interim report to Council in a public excluded meeting. In that meeting Councillors had more specific questions and also asked Deloitte to come back with further factual and historical information that hadn't been included in its report. In early February 2013 Council's audit committee recieved Deloitte's abridged report for further proof checking. The final report was presented to Council today.The abridged final summary can be read here.In late December 2012 Council also had to approve a further $1.06m to finish the complex, which brings the overspend of the facility build to $1.4m (excludng the historical costs of $583,000).Due to the high public interest as a consequence of this, Council has decided to release all iterations of the Deloitte report from December 2012 through to February 2013.The interim report from December 2012 can be read here The unabridged February 2013 version can be read here. Deloitte's Key Findings Deloitte was tasked with looking at the 2004 Deed and business case presented to develop the Mercury Bay Multi Sports Park on the Moewai Road (Sherriff Block). This report also looked at the processes leading to the eventual 2010 Deed that was finally signed for final site at Moewai Park Rd (Whitianga Waterways Ltd). It also looked at build of the facility, including design, procurement processes and project management. It's key findings: The 2010 Deed was advantageous to Council due to actual land potential due to the actual land potential cost being limited to $6.5m. There was also a removal of other provisions included the 2004 Deed that was outstanding between WWL and Council. There was a lack of a business case in 2010 for what was to be delivered for the budgeted $6m project ($3m for land development, $2.2m for roading and other facilities (tennis courts, netball courts) and $800,000 for the development of a facility (toilets, showers, changing rooms and the possibility of a small function room). The $6m was approved based on "rough costings," prepared in 2010 by the project manager and excluded any changes to size, scope and design of the building, as well as turf/grass costs. Changes to the size, scope and design of the facility has now contributed to current cost overruns. Also between October 2010 and October 2011 these changes weren't reported as a resolution to Council. In 2010 the TCDC CEO at the time suggested a further business case of the Multi Sport Park should be developed as the site where the complex was to be built had now changed. Council was also outside its procurement policy. Financing of the Sports Park was approved nevertheless. Deloitte says the documentation of procurement decisions was not in accordance with Council's procurement policy or best practice. Reporting and reviewing the financial situation of the project was not in accordance with best practice. Overall reporting by the Project Team of the time was generally done on an informal and verbal basis. The accounting system for this project was not run line-by-line, which meant it wasn't broken down into sufficient enough detail and excluded committed expenditure. If this had been done project variances would have been picked up much earlier. The financial reporting done at Council level for capital expenditure was at too high level. Incorrect financial reporting eventually led to the project being signed-off for construction in May 2012 with the advice that it was within approval and budget. In later attempts to claw back the over-commitment, further project management over-runs inadvertently resulted. Community Meeting Arranged A community meeting is discuss the Mercury Multi Sport Park has been arranged for February 27 at 1pm at the Whitianga Town Hall. "There needs to be accountability and a full explanation to our communities around the history of the Multi Sport Park Project and where the money has been spent and that's why I've called for a community meeting," says Mayor Glenn Leach. The meeting will look at the historical timeline and decision making process behind the Mercury Bay Multi Sport Project and how this contributed to cost overruns. It will also address the findings from the Deloitte Report. breakdown where the cost overruns have occurred within the build. The meeting will also update progress on the Sport Park build and what support has been put in place to make the facility a success. "At the end of the day we want to ensure the community supports and uses the Multi Sport Park," says Mayor Leach. Changes Council Has Made Already "Council's new management structure was instrumental in uncovering the major problems at the Mercury Bay Multi Sport Park," says Chief Executive David Hammond. "The Deloitte Report is thorough as it puts the facts firmly in place, answers all the questions and helps Council in terms of moving forward when it comes to project management and decision making processes," says Mr Hammond."We were fortunate that we made some changes when I started 13 months ago including appointing a Chief Financial Officer, as there wasn't this position on the previous council," says Mr Hammond. "There is also more connectivity between the Area Managers who are part of the executive team and more control over projects. There is also more discipline over budgets so what was a "place holder" figure on a project in the Ten Year Plan is now broken down into more specific terms as to where and how project spend is going," says Mr Hammond.Several investigations (both internal and external) are underway looking at staff involvement in decision making over projects. Business management and processes around Council projects is also under scrutiny and an independent employment lawyer has also been commissioned. Progress on Multi Sport Park Build The ablution block is on track to be completed by May 2013. "We're about 65% complete," says Mercury Bay Area Manager Sam Marshall. Structural beams are currently being installed across all three modules of the building which will then allow the roof to be put on in a couple of weeks," says Mr Marshall. Windows and doors have been ordered and will be brought in by March. Council staff is working with a turf expert to help promote the growth of grass on the sports fields. Twilight netball is about to get underway at the Sports Park courts on Thursday nights.