SAO AUDIT RECOMMENDATIONS AND ACTION PLAN

Dxc

Description

Port of Seattle State Auditor Report Responses And Action Plan March 11, 2008 The table below addresses 51 recommendations submitted to the Port of Seattle following the Washington State Auditor’s Office report focusing on Port construction practices. The first two recommendations, shown in blue (OA1, OA2), are overarching for the Port in general, and others, numbered 1 – 49, are specific to construction and contracting practices. The latest activities, listed under Action Steps, will be shaded orange, and then green as they are completed. Use the search feature to navigate through the document. Overarching Recommendations Latest Activity Action Completed ESTIMATED STATUS/ SAO RECOMMENDATION PORT RESPONSE ACTION STEPS ACCOUNTABILITY COMPLETION REMARKS RECOMMENDATION PORT RESPONSE ACTION STEPS ESTIMATED ACCOUNTABILITY COMPLETION STATUS/ REMARKS thOA1. The Port should establish a The Port agrees this Port Chief Executive Officer (CEO) directed Deputy CEO 3/15/08 On March 6 senior-level Chief Procurement recommendation has merit. A Port staff to review options and best practices the CEO Officer (CPO) position. This official team is in place, and work is for procurement systems, and recommend Procurement announced should report directly to the [Port] already underway to identify and organizational and process change to CEO by Recommendation he CEO and be responsible for evaluate procurement models in ...

Sujets

• management
• managers

Informations

• Publié par: Shiev
• Nombre de lectures: 101
• Langue: English

Extrait

 

       

Port of Seattle

State Auditor Report Responses

And Action Plan

March 11, 2008       The table below addresses 51 recommendations submitted to the Port of Seattle following the Washington State Auditor s Office report focusing on Port ’ construction practices. The first two recommendations, shown in blue (OA1, OA2), are overarching for the Port in general, and others, numbered 1 – 49, are specific to construction and contracting practices. The latest activities, listed under Action Steps, will be shaded orange, and then green as they are completed. Use the search feature to navigate through the document.     Overarching Recommendations Latest Activity Action Completed    

SAO RECOMMENDATION PORT RESPONSE     RECOMMENDATION PORT RESPONSE

ACTION STEPS

ACTION STEPS

ESTIMATED STATUS/ ACCOUNTABILITY   COMPLETION REMARKS 

 ESTIMATED  ACCOUNTABILITYCOMPLETIOSTATUS/ REMARKS On March 6 the CEO announced he a ointment of an interim Chief Procurement Officer. The CPO job requirements have been forwarded to HRD to finalize the ob description and ost an advertisement for the new CPO.

OA1. The Port should establish a reesThe Port a Port this CEO directed Chief Executive Officer ut De 3/15/08 CEO senior-level Chief Procurementrecommendation has merit. ractices and best tions staff to review o Port A Officer (CPO) position. This official for procurement systems, and recommendteam is in place, and work is Procurement should report directly to the [Port] Recommendation and process change to CEO byalready underway to identify and organizational CEO and be res onsible for Team 15, 2008.evaluate rocurement March models in mana in and overseein allother or anizations that en a e in procurement-related activity. This Withmajor construction projects. official should have authorit to hire an outside facilitator ofthe helOA1.a Outside facilitator with extensive11/2007 trained and inde endent rocurement ect ro in ca italex eriencedrocurement ex hired in ertise   officials who will be charged withdelivery, the team is reviewing andNovember 2007.   reviewing and approving allanalyzing several options for rocurement-related transactions.mission, role, re ersonnel, ortin ProcurementOA1.b Internal12/2007 Current dele ations of authoritlocation, and structure of a ChiefRecommendation Team assembled in   related to procurement – contractProcurement Office (or similarDecember 2007. Team includes   awards, a roval of contract chan es overfunctional unit the next from ma orre resentatives   and amendments, and related Port’s CEOseveral weeks. Therocurement centers within the Port.   activities involving expenditure ofhas asked the team to provide him ublic funds related to construction and a tionswith an outline of o Recommendation TeamOA1.c Procurement and construction mana ement –referred recommendation within .meets weekl   should be rescinded and re-assigned necessary period of A90 days. to the CPO and her or his staff. 6/1/08 functional centralized procurement Implementimplementation planning will follow, but the CEO antici ates office. that the new unit or department can be operational by June 1, OA1.d Prepare job description, advertise, 3/15/08 2008. The workin team includes and select Chief Procurement Officer. re resentatives from the Port’s executive, legal, project OA1.e Complete necessary organizational 6/1/08 mana ement, en ineerin , and lo istics. purchasing staffs.   OA2. The Port Commission should 2008, the Port Commission Commission Januar 8,Resolution 3181 is the structural On re-evaluate the current delegation offramework underlying the a subcommittee to review the established 2    

   

   

ACCOUNTABILITY   C ES O T M I P M L A E T T E I D O   N  S R T E A M T A U R S K /  S 

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS     authorit to the Port CEOrelationshi between the Port dele ation of Commission authorit currentl (encompassed in Resolution 3181)Commission and the CEO. described in Resolution 3181. and develo and issue a new tedResolution 3181 was ado in dele ation of authorit resolution that has remained1994. ItOA2.a Commissioners Davis and Tarleton   more clearly defines thesubstantially unchanged for thewill serve on the subcommittee.   Commission’s intent with respect to only one However,past 13 years. construction mana ement and outside retain ma Subcommittee OA2.bof the five Commissioners who reporting to the Commission and the experts.voted on and signed Resolution public concerning construction A change3181 remains in office. activities. Subcommittee will re ear. OA2.cof CEO occurred earlier this back to full ort Given these circumstances, it is Commission with ro osed appropriate that the Commission amendments by June 30, 2008. and the CEO review the rovisions of this bedrock document.CEO directed Port staff to review and rovideGeneral Counsel Ultimately, the Commission, indetailed recommendations for changes to the conversation with the CEO, willResolution 3181 related to rovisions strike the balance between olic and constructionconstruction mana ement direction and implementation, asactivity reporting by March 15, 2008. well as other matters concerning   the sco e of the CEO’s authorit . team assembled and meetinOA2.d Internal To advance that effort, the CEOto review s rovisions ecific and has asked members of hisprocesses. executive team, led b the General Counsel, to rovide him with recommendations for updating, clarif in and stren thenin a variet of rovisions in Resolution 3181 within 90 days. The CEO has directed the team to give s ecific attention to the results of this erformance audit and the 49 resulting recommendations. In articular, the team is char ed with rovidin s ecific recommendations for process

3    

      1/8/08         6/30/08       3/15/08              

      Com lete.                               Team met with Sub- Committee on 2/21 to rovide information.  

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS    

ACCOUNTABILITY   E C S O T M I P M L A E T T E I D O   N R S E TA M T A U R S K /  S 

im rovements and enhanced checks and balances for project- wide contractin authorit , as well as increased ublic visibilit and Commission participation for larger construction projects. The CEO then will share these recommendations with the Commission. 1. We recommend that {The Port] The Port will review its change  The Port has implemented and strengthened Project control rocedures for chan e orders as Mana ement, immediatel im lement and order control rocedures and will follows: En ineerin & stren then control rocedures to im lement chan es where assure that Engineers’ change order warranted to ensure alignment with  Construction estimates are (a) prepared without industry best practices. The Port  (PMEC) knowled e of the contractors’ has alread be un, and will  Immediate Action: ro osed amounts, and b chan e continue, to make im rovements  chan1.a All orders are double checked b e oint action an a Construction Manager (CM) and a o a r r d e  e f r u   l e l s   ti a m nd a   t c e o s  m an l d e   t c e o l s   t  d a o n c a u ly m s e e n s t   ed.  f a r s o  p m a  t r h t  e o   f T  t K he W     37 e - r p formance au pl dit,     CA before theContract Administrator Where cost or rice anal sis is used and it will incor orate the  the Port.are executed b to evaluate change order proposals, Performance Auditor’s additional the Port should re uire full and recommendations into that action  liance for ensure com to trainin1.b Provide com lete documentation of these lan as a ro riate. The Port each Resident En ineer RE , CM and CA on current requirements for change reviews, including fully documented agrees that independent estimates, is a order estimates and document training supervisory reviews and approvals.  secondar     c re o v s i t  e a w n s a   l o y f  s cont n ra d  ctor  s ecifics. r t c r h a a n n s g p e a   r o e r n d c e y r     a p n o d p  a o c s c a o ls u   n a t r a e b   i v l i i t ty a   l to  Additional Action:  and will ensure that these  1.c Evaluate documentation of anal ses of estimates and reviews are well-  estimates and make recommendations   documented in the files.  for standardization and consistency.   1.d Establish a olic outlinin when a change order request requires a separate estimate in lieu of a direct evaluation of the existing contractor’s change order

4    

              1/24/08       3/5/08           6/5/08  

Part of this work is currentl ongoing under TKW Item 7.   Complete.       Complete

SAO RECOMMENDATION PORT RESPONSE    

ACTION STEPS

STIMATED STATUS/ ACCOUNTABILITY   C E OMPLETION REMARKS 

ro osal.   1.e Coordinate olic and rocedures with the Chief Procurement Office.   1.f Update CM and CA manuals to reflect new rocesses and rocedures.   1.g Provide training to CMs, CAs, Port Construction Services PCS and Pro ect Mana ement Grou PMG on new cost estimate procedures.   The Port will review current project trend logs, 2. We recommend that [the Port] The Port has begun a review of identif inconsistencies and note corrective undertake a review of all ma or recent chan e orders and trend lo s to and on oin ro ects to identif cases identif similarities between Port  actions or evaluate recommendations. n ineers’ estimated costs and contractor c w o h n e t r r e a   c e tor g s’ roo e s s e ti d  m a a m te o s u   n a t n s d     are roosed amounts.  The Port will  Immediate Action:      consistentl the same and, in such take remedial action as  ineers’ cases where en all2.a IdentifConstruction ’ cases, undertake a further evaluation appropriate and also apply the  proposedestimates and contractorsManager of the underl in causes; followed b rocess im rovements described  theamounts are consistentl same and   remedial actions as appropriate. above in Recommendation 1.  causes. indetermine underl      Additional Action: 2.b Review matches identified and Internal Audit recommend remedial action. Manager    2.c Provide re ort to Senior Mana ement. Internal Audit  Mana er 2.d Take appropriate remedial action as Construction directed b Senior Mana ement. Manager  

5    

  3/5/08           TBD     TBD   TBD  

          Com lete.           Pendin review of Internal Audit work lan and decisions on audit support resources with Commission Audit Committee.

MATED STATUS/ ACCOUNTABILITY   E C S O T M I PLETION REMARKS 

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS     3. We recommend that the Port The Port has be un revisin its  The Port will revise its Standard O eratin PMEC n Procedures manual to include specific r s ev e i c s i e fi   c it   s  u S id O e P li   n M e a s  n f u or a   l t r o o  in e c r l   u a d n e d     c P o ro n c st e r d u u c r ti e o s n     M S a ta n n u d al a   r a d s     Op ar e t r   a o t f i  its g     uidelines for roer and accurate chane  accurate chan e order TKW erformance audit action  order documentation, and will take the   documentation. [The Port] should plan. Specifically, this revision will  following steps: provide training to its consultant include more guidelines for change staff/construction mana ers to order ne otiations and  Immediate Action:   h documentation. Port staff will  training on current requirements3.a Provide i P m o p rt r ]  o i v s  e d  t o h c e u  m me an nt n in er g     i p n r   o w j h e i c c t c [ h th a e n   ge receive necessary training to for change order documentation for CMs,   orders. support these new guidelines. REs and CAs.   Additional Action: 3.b Establish team to evaluate current ractices.   3.c Establish minimum chan e order documentation re uirements and rovide change order review checklist.   3.d Review current documentation of chan e order ne otiations and develo standard format.   3.e Provide trainin to ins ectors, REs, CMs, CAs, Program Leaders, Project Mana ers, PCS, Facilities & Infrastructure, internal desi ners and internal auditors on new procedures.   3.f Coordinate rocess with new Central Procurement Office CPO , which will provide quality control, oversight and continuous im rovement.   4. We recommend that [the Port] As noted in the Port’s response to  The Port will develop standard operating PMEC 6    

              3/5/08         6/5/08                                 7/31/08

 

Part of this work is currentl on oin under TKW Item 11a. Complete

 

ACCOUNTABILITY ESTIMATED STATUS/ COMPLETIONREMARKS

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS     develo Standard O eratin Recommendation 3, the Port has rocedures that ali n with best industr Procedures (SOPs) that align with begun revisions to its procedures practices and will take the following steps: industr ractices.   Current Port to better conform to manual SOPs do not rovide ade uate industry best practices. Immediate Action: information regarding change order negotiation summary will be reviewed4.a A negotiations.by a CM and a CA before the Port executes an chan e order.   4.b Provide training in conjunction with chan e order trainin described in 3.a.   Additional Action: 4.c Determine best industr ractice for chan e order ne otiations.   4.d Identif differences, if an , between best industr ractices and those a licable to Port operations.   4.e Develo and/or revise current Port standards.   4.f Provide trainin to a ro riate staff.   5. Port mana ement should take The Port will review its ractices of  The Port’s res onse to chan e order PMEC    e contract schedule enforcement  estimates is addressed under i P m or m t] e  r d i i g a o t r e o  s u t s e ly p   s e  t n o f   o a r s c s e u s  r a e l   l t   hat[th andthe evaluation of time  Recommendation 1.    contractual schedule re uirements. extension re uests to identif Then, when re uests for time where further im rovements can  Port mana ement will immediatel ensure that be mad  the Port enforces, consistent with best s e h xt o e u n ld s   io b n e  s a r r o e  e m rl a   d e e v ,  a t l h u e a y t   e c d a .  n    a T n h d e    secific  e a .  t   t T en h t e i   o P n  o t r o t   t w h il e l    p r a a y c   tices  ractices,  all contractual reuirements for  Port should also rovide more of other state and local a encies  re aration and submission of schedules b oversight of the Change Order with respect to scheduling and  taking the following steps: enfor process to ensure that estimates are cement when conducting this  Immediate Action: 7    

        1/24/08       3/5/08     6/5/08                     6/5/08                      

                Complete

                     

SAO RECOMMENDATION     properly created and used.

PORT RESPONSE

review. 

ACTION STEPS

ACCOUNTABILITY  E C S O T M IM PL A E T T E I D O   N  S R T E A M T A U R S K /  S   

5.a Provide trainin on current contract schedule requirements for CM and CA staff.   5.b Review all active projects for compliance with contractual schedule requirements.   5.c If any contracts are not in compliance with contractual schedule requirements, the Port will im lement enforcement consistent with the ro ect s ecifications.   Additional Action: 5.d Review industr best mana ement practices for specifying and implementing schedule enforcement.   5.e Implement any improvements identified in item 5.d.   5.f Provide trainin to CM, CA, PCS and PMG on revised procedures.   6.  We recommend that [the Port] The Port concurs that change  T m h e e t   h P o o d r   t o  i f  m re m s e ol d v i i a n te   ly c   h c a e n as e e   d o   r a d n e y r     i d n i f ff o e r r m e a n l c   es. PMEC  immediatel cease its informal order ne otiations should be method of resolving change order based on all relevant factors,  Im diate Acti differences, and that [the Port] including formal schedule, scope, 6.a m   e Port staff w o a n s :  ractice isnotified that this im rove its chan e order means, methods, ricin , and documentation re uirements to o erational considerations. no lon ermitted. er include that details of change order Improvements to standard   ne otiations must be based on rocedures that are underwa will  otiations summar must be6.b A ne discussions of sco e/means and em hasize chan e order  areviewed b CM and a CA before a methods/pricing differences. documentation training, including a cute exen ber caroedgn ecah troP  eht yb d focus on the above factors. .   8    

3/15/08       4/4/08     4/4/08           6/5/08       7/31/08     8/1/08         1/24/08     1/24/08        

Com lete       Complete.  

        Com lete.     Com lete.        

SAO RECOMMENDATION PORT RESPONSE    

ACTION STEPS ACCOUNTABILITY   E C S O T M IM PL A E T T E I D O  STATUS/  NREMARKS

Additional Action: 6.c All change order negotiations will be fully documented.   6.d Change order documentation will be improved as outlined in Recommendations 1, 3, 4 and 5.   6.e Port management will provide interim uidance until revised rocesses and rocedures are ut in lace.   7. We recommend that [the Port] The Port will undertake additional  Using a statistical sampling methodology, Internal Audit undertake a review of the change review of change orders using  I c n o t n e t r r n a a c l t   s A   u a d n i d t   d wi e ll t   e r r e m vi i e n w e    w Po h r e t t   h co er n  t s h tr e u   c P ti o o rt n     ha  Manager  orders ne otiated and a roved rocedures consistent with  s under all contracts to determine if acce ted auditin standards to  aid for other incorrect mark-u s. In addition there were other incorrect mark-ups determine whether other incorrect  I t n o t  t e h r e n   a s l t   a A ti u s d t i i t c   a w l i   ll s   a us m e p   l a e     ri m s e k- n b ti a o s n e e d d     a a u b d o it v   e,     on change orders. mark-ups on change orders exist.  roach t a o test other contracts that mi ht be vulnerable to payment of incorrect mark-ups.    Immediate Action: 7.a Obtain State Auditor’s Office (SAO)   confirmation of the sampling and risk-   based audit methodolo that will be   used.      7.b Review those contracts identified b the sam lin and risk-based audit methodology.    Additional Action CM and 7.c Determine if further review is necessary, CA based on outcome of the immediate action.

9    

6/5/08                       Complete. Pending review of Internal Audit work plan and decisions on audit support resources with Commission Complete. Audit Committee.                      TBD