Sydney CBD and South East Light Rail Project Audit and Governance Report

PPMP 20010 - Assessment 2
Project Audit and Governance Reports
PROJECT AUDIT REPORT
Project name: Sydney CBD and south East Light Rail Project (2015-2020)
Date of report: 24/09/2020
Project ownership: Department of Transport
Senior User:
Prepared by:
Distribution list: Customers, shareholders

1 LIST 2 ISSUES DISCOVERED IN THE AUDIT REPORTS (200-300 WORDS)
Costing
Issue
There were costing issues in the CBD and South Eat Light Rail (CSELR) project
(Audit Office, 2018). Stakeholders of such government-based and big projects
are concerned with the outcome of the project. However, the stakeholders
were not given adequate insight information about the management and
execution of the project (Legislative Council, 2018).
The cost of the project has not been regularly updated and thus increased the
problems in meeting the set deadline of the project (Audit Office, 2020). The
estimated cost of the project has been changed which has further increased
the ambiguity regarding the financial management and accountability of the
whole project.
Plannin
g Issue
The project failed to meet its deadline which showed significant planning
issues in the CBD and South East Light Rail (CSELR) project. The New South
Wales rail transport plan has not properly planned and procured which has
put significant delays in the whole project (Audit Office, 2018). The planning
phase of the project neglected the importance of governance arrangements.
Consequently, the roles and responsibilities of the project were not clearly
defined and assigned. The Audit report highlighted that the project
deliverables were not effectively governed and managed in the planning and
execution stages of the project. The stakeholders of the project which
includes community has been consulted form the period 2006 to 2009 but in
the year 2012, the final decision has been made without taking the opinion of
the community (Audit Office, 2018).
2 IDENTIFY 2 REASONS FOR EACH ISSUE FROM AUDIT REPORTS (400-500 WORDS)
Costing
Issue
Reason 1 The CSELR project has went through budgeting issues because it
neglected and ignored the designed procedures. In 2019, the
total cost of the project is re-estimated and costed $2.9 billion
which is published by the contractor (Guardian, 2019). However,
as per the Audit report, the total cost of the project is expected
to exceed the previously estimated cost of 2.9 billion and is
predicted to reach $3.1 billion (Legislative Council, 2018). The
cost has been exceeded due to the omitted cost, limited business
support packages and substantial delays in the execution of
project deliverables (Audit Office, 2020).
Reason 2 The smooth delivery and execution of the project is difficult due
to the considerable increase in the cost of the project. CSELR’s
infrastructure requires huge financial support from the
government and sponsor of the project. However, the project

total cost exceeded due to the tight deadlines. This has led to
overestimation of project’s benefits and underestimation of total
cost. The project failed to consider the financial aspect and the
resultant project’s risk while drafting the plan.
The capital expenses of the project were not valued properly due
to the improper scheduling (Legislative Council, 2018).
Plannin
g Issue
Reason 1 The planning issues regarding the delivery of the project further
increased due to the confrontation between NSW and ALTRAC
(Guardian, 2018). As a result, the project which was expected to
be completed and closed by March 2019 has been delayed by at
least a year Inadequate information about the staffing and
resources has been provided by the ALTRAC (Legislative Council,
2018) which substantially increased the project management
issues.
The information regarding the delays and withdrawal from the
original plan has not been communicated between the two
important stakeholders of the project i.e. New South Wales
transport and ALTRAC (News, 2018).
Reason 2 The audit report reveals that the key assurance procedures have
been ignored in the audit planning. Absence of planning
protocols has also led to mismanagement of the time.
Furthermore, the third-party agreements have also not been
finalized in the planning stage which has put an adverse impact
on the project’s value for money (VFM) and has increased the
project risk.
The pre-planning phasing of the project requires independent
gateway assurance reviews and got its own investment gating
and investment system (Audit Office, 2018). As a result, the
planning procurement failed to get the best value for the state of
NSW transport (Audit Office, 2018).
The project due diligence process that is required to be
performed in the planning phase of the project has fulfilled the
requirements of the NSW government even though the state
transport for NSW has used wrong assumptions (Legislative
Council, 2018).

3 PROVIDE 2 RECOMMENDATIONS FOR EACH ISSUE (400-500 WORDS)
Issue 1 Recommendation
1 –
Stakeholders Requirements
Ambiguity regarding the expectations of the
stakeholders can create budgeting issues for the project.
Effective identification, evaluation and management of
stakeholders demands and requirements hold significant
importance (PMBOK, 2017) in a complex project like
CSELR. Therefore, in order to keep the project under
budget, the demands and expectations of stakeholders
should be carefully identified, documented and
established with the stakeholders and then
communicate among all stakeholders (CIO, 2017). It will
allow the project manager to have a strong grip on all
the stakeholders of the project.
Recommendation
2 –
Set KPIs
The cost of the project has exceeded its estimated
budget. To reduce the risk of the CSELR, the project
deliverables and activities should be monitored on a
regular basis (PMBOK, 2017). Key performance
indicators (KPIs) should be developed to manage the
budget of the project effectively (CIO, 2017). It will assist
the project manager to keep a constant check on the
spending and expenses of the project. Some of the key
KPIs that can assist in the effective management of the
project include
Actual Cost: This will enable the project manager to
know the actual money spent on the project.
Cost Variance: This will allow the project manager to
know that either the project is on the estimated budget
or not
Earned Value: It displays the agreed budget for delivered
project activities up to a specific time.
Planned Value: It shows the projected cost of the
planned activities as of the current date.