EDDC internal Auditors Report: High risk: Capital Risk Assessment

Capital Risk Assessment

page 36:

The Capital Programme does not accurately estimate the cost or timescales necessary to implement the capital projects required by the Council to deliver its corporate objectives, leading to unanticipated additional spend or delayed completion of the capital programme.”

Page 37:

As part of our sample testing, we found that three of the four projects tested did not have a risk register to manage their associated risks. Relevant risks included uncertainties in securing external funding (Seaton Workshop), delays in completion of the project (Seaton Workshop, New Feniton Flood Alleviation Scheme and Mamhead Slipway) and significant overspends (New Feniton Flood Alleviation Scheme and Mamhead Slipway.)

Without formal risk management processes in place, there is a likelihood that individual projects are not identifying risks at an early stage leading to an increased risk of projects not being completed on time or within the agreed budget.”

Page 39:

In our sample of capital projects, it was evident in speaking to staff that the Council had not anticipated the level of funding required for the Seaton Workshop project at an early stage, which may suggest that insufficient research was done to review the viability of the project prior to approval of the project/budget.

The Finance Team should consider whether evidence to support capital appraisals should be clearly documented. They should also consider implementing clear guidance on the level of initial assessment which should be required to be undertaken for capital projects if this is not clearly stated on any current policy/guidance. Any approach should be based on the level of risk and funding of the project as it was evident that some capital projects are lower in risk and value than others.

There is a risk that proposed projects are not being subject to the right level of assessment which could increase the likelihood of funding the wrong projects, and could also lead to delays and overspend to individual projects.”

http://eastdevon.gov.uk/media/2006026/020317combinedagagenda.pdf

Oh dear.

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