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HomeMy WebLinkAboutF0112 Courthouse Follow Up Report PUBLISHED (6-23-25)To request this information in an alternate format, please call (541) 330- 4674 or send email to internal.audit@Deschutes.org Follow-up on Courthouse Pre-Construction Audit: Improved procedures for risk assessment and oversight will increase the likelihood of projects delivered on budget and on time. June 2025 Our 2024 audit of the Courthouse pre-construction phase highlighted both strengths and areas for improvement in the Facilities Department’s approach to managing capital construction projects. Nine months later, the Department is in a better position to ensure that large projects are delivered on schedule and on budget. The Department developed a Construction Manual with improved practices for risk assessment and oversight. It also took steps towards improving construction manager/general contractor contract language to hold the contractor accountable and control costs. Deschutes County Office of the Internal Auditor Page 1 of 3 Audit Follow-up Report: June 2025 Courthouse Pre-Construction Audit Recommendation Status Key: Initial finding: The courthouse project experienced delays in all preconstruction phases; none were completed according to the original duration. Initial timelines did not incorporate the complexity of managing multiple stakeholders and the regulatory risks and challenges associated with permitting. Risks arising from the complexity of the courthouse project could have been more effectively identified, assessed, and mitigated using a risk register. Recommendation: The Facilities Department should implement a comprehensive pre-construction planning and risk management framework. Update: The Facilities Department developed a Construction Management Manual based on the Project Management Body of Knowledge. The approach to risk defined in the Manual includes assessing risk, creating a risk register, and addressing risks. 3 Resolved 0 In Process 0 Accept Risk Management addressed risk. Auditors will no longer monitor. Recommendations are in progress. Auditors will continue to monitor. Management accepted the risk of not implementing the recommendation. Risk management framework adopted. Deschutes County Office of the Internal Auditor Page 2 of 3 Audit Follow-up Report: June 2025 Courthouse Pre-Construction Audit Initial finding: Several inconsistencies in adhering to contract language were noted during the audit: detailed receipts and documentation were not consistently provided for reimbursement; a clerical error in the contract indicated that the contractor was underinsured; and the life-size courtroom mockup project was performed without being in the scope of work. Facilities did not formally assign roles and responsibilities allowing for overlaps, conflicts, and potential miscommunication within the project team. Recommendation: The Facilities Department should develop and implement comprehensive policies and procedures to strengthen guidelines and oversight for capital projects. Update: The Facilities Department developed a Construction Management Manual based on the Project Management Body of Knowledge. The Manual directs staff to assemble a construction team with assigned roles and clear expectations. Initial finding: Without clear and definitive contract language the County exposed itself to significant risks, including potential overpricing and reduced value. The contract did not include defined allowable costs, requirements for crediting rebates or savings to the County, or obligations to notify the County about using contingency funds. Additionally, contract language did not reflect the department’s efforts to support under-represented business owners. Recommendation: The Facilities Department should coordinate with County Legal to create a construction manager/general contractor contract and general conditions template with enhanced cost controls and consistent equity support. Clearer roles will improve oversight. Staff research will result in improved contract language. Deschutes County Office of the Internal Auditor Page 3 of 3 Audit Follow-up Report: June 2025 Courthouse Pre-Construction Audit Update: At the time of the follow-up, the Facilities Department was not planning a similar contract model for any near-term projects. Instead of investing resources in developing a template, staff researched other contracts from several Oregon public entities and planned to use them as a starting point for a new template to be developed when the next construction manager/general contractor project is under consideration. Next Steps: With all recommendations resolved, we will not report on the status of audit recommendations in our Global Follow-up Report. However, we are planning to conduct a post- construction audit of the courthouse project after its anticipated completion in the Summer of 2026. Deschutes County Office of the Internal Auditor Audit Follow-up Report: Courthouse Preconstruction The mission of the Office of Internal Audit is to improve the performance of Deschutes County government and to provide accountability to residents. We examine and evaluate the effectiveness, efficiency, and equity of operations through an objective, disciplined, and systematic approach. The Office of Internal Audit: Audit committee: Elizabeth Pape – County Internal Auditor Daryl Parrish, Chair – Public member Susan DeJoode – Performance Auditor Phil Anderson – Public member Jodi Burch – Public member Phone: 541-330-4674 Joe Healy – Public member Email: internal.audit@deschutes.org Summer Sears – Public member Web: www.deschutes.org/auditor Kristin Toney – Public member Patti Adair, County Commissioner Charles Fadeley, Justice of the Peace Lee Randall, Facilities Director If you would like to receive future reports and information from Internal Audit or know someone else who might like to receive our updates, sign up at http://bit.ly/DCInternalAudit.