A Victorian government agency responsible for managing over $A36B of major projects has been blasted in an Auditor-General's report that found it was unable to produce records of the contracts it was managing and undertook dubious employment practices.

The report, which cost over $340,000 to produce, was delivered to the Victorian Parliament this week. It found Major Project Victoria (MPV)’s recruitment practices enable employees to resign and to be re-engaged as contractors within a very short time frame to perform the same work at a much higher fee.

It was also found that MPV’s mismanagement of its internal contracts was considered so bad that it increased the risk of fraud.

The body is responsible for overseeing public works such as Melbourne Museum redevelopment, the Synchrotron, AAMI Park and the Melbourne Markets relocation

“MPV’s management of its internal contracts is deficient, with missing contracts, unjustified contract variations and the absence of contractor performance assessment,” the report found.

“We experienced considerable difficulty in obtaining standard project information from MPV. This was not due to an unwillingness to provide the information, but rather an inability to readily provide it.

“MPV’s processes are predominantly manual, and much of the information we requested was sourced from hardcopy documents retrieved from archives.”

MPV was unable to produce for the Auditor-General 5 out 15 contracts it had issue to engage contractors. The missing contracts have an estimated value of around $A1 million.

“MPV regularly varies contracts for both time and cost. Of the current contracts, six have a total of 14 variations. There is very little documentation to support the reason for the variations. Further, MPV were unable to explain the basis for extensions to contract length or revised payment terms.

“There is also poor oversight of contract variations. One of MPV’s contractors has been on a contract for nine years, with four variations. The third variation occurred in June 2011 with DBI’s Secretary approving an extension of time on the condition that MPV went to tender for the contract upon expiry. In December 2011, the contract was varied again for a further 12 months at a cost of $378 000.

“Two of MPV’s contractors are appointed on open-ended contracts. The reasons for this are not known because MPV does not have copies of the contracts, nor adequate supporting information.”

The report found the data that MPV relies on to underpin its monitoring and reporting is unreliable, highlighting major deficiencies in its data management, record keeping and governance.

It has been urged to review its records management processes and practices as well as review the completeness of its key records, including contracts and project documentation

One project that came in for particular scrutiny was a renewal of the Princes Pier renewal. This project involved the partial demolition and restoration of the Princes Pier in Port Melbourne.

“For this project, DBI was the client and project manager, as well as the end user. This is not the normal practice for most projects that MPV delivers, with an external client and end user more typical.

“While there is a project management plan for this project, it has many deficiencies that are likely to have contributed to poor project outcomes. The plan does not conform to MPV’s PMF or better practice.”

Issues highighted include:

• The plan consists of six individual files and document or version control is poor. It is unclear how the plan as a whole could be easily viewed and understood as separate files.

• The plan was not approved and remained a draft document throughout the life of the project.

• The plan lacks sufficient detail about objectives, governance and management, and time frames.

• Significant gaps exist in the plan and key sections are missing. These include a project overview, work plan and work breakdown structure, schedules, project monitoring and performance measurement, procurement strategy, and risk management—although some risk registers do exist for the project.

• The plan refers to Schedules that do not exist and refers to project governance arrangements that did not exist during the project. 

• The plan was not regularly or routinely updated during the project, despite significant changes to time frames and cost occurring during the life of the project. The plan was created in 2006 and updated once in 2010.”

The full report from the Auditor-General is available HERE