SAI Norway Completes Special Audit on Major Project
Following a number of current, as well as anticipated, resource overruns, the Norwegian Parliament (the Storting) requested the Office of the Auditor General of Norway (OAGN) perform a special audit on a major building project on the site of Parliament—a project both initiated and managed by the Parliament itself.
The project, originally budgeted for $100 million in May 2013, consisted of three parts:
- Complete rehabilitation of an office block;
- Building a new hub for deliveries; and
- Constructing a tunnel to connect the new delivery hub to a street three blocks away.
Just over four years later, in June 2017, the estimated final project cost totaled $230 million, representing a $130 million overrun.
The Presidium of the Storting was primarily responsible for this project. Because Mr. Per-Kristian Foss, OAGN Auditor General (AG), had been a Presidium member during the project’s planning and conduction phases, he would not oversee the special report. Mr. Karl Eirik Schjøtt-Pedersen, Vice Chairman of the Board of Auditors General, stepped in as acting AG for this task.
The following were OAGN’s main audit conclusions:
- The massive increase in the cost of the project can only in part be explained by real changes in the project since the original plans were drafted.
- Completing the project within time constraints and ensuring the best functionality held more importance than adhering to the allocated budget.
- The organization of the project was not appropriate for such a complex, large venture.
- Costly choices were made that had not been completely analyzed.
- Better quality assurance would have revealed project weaknesses.
- The Storting lacks adequate regulations and routines to ensure large building projects are conducted in effective and efficient manners.
- Presidium budget proposals to Parliament were incomplete.
- There is a need to clarify administrative roles and responsibilities among the different bodies of the Storting.