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Paper Title: Establishing a Technical Auditing Guideline Document for Use by the Internal Audit Governance Board Secretariat

and the Ministry of Public Works, R.L. Prepared by: John Constance, Consultant Project Management for Construction and Infrastructure Introduction: The Act that established the Internal Audit Governance Board Secretariat, or IAGBS, empowers the Secretariat to audit the Public Works Ministry of Liberia. In order to ensure smooth working relation in this endeavor and that both Government offices achieve their individual public mandates and get the best results of the audit, it is necessary for the two public offices to established a technical auditing guideline document that facilitates the standards, general procedures and best practices of conducting technical auditing of the planning, design, construction and operations and maintenance processes of public infrastructure in Liberia. This paper intend to justify the need for documenting technical auditing guidelines as a working document for the Public Works Ministry and the Internal Audit Governance Board Secretariat. Background Information: The Ministry of Public Works of the Republic of Liberia, or MPW, is responsible for providing adequate, safe, cost-effective and efficient public infrastructure or civil engineering system within the borders of Liberia, including the facilitation of cross-border infrastructure communications with neighboring countries. MPW goal is to ensure the country has advantageous infrastructure network, standard construction and standard urban regulations that meet global engineering, provide services through the construction/maintenance of public infrastructure, zoning laws and regulations and construction contract supervision, ensuring all this benefits the population, stakeholders, and the efficient and effective operations of the Government of Liberia. The Internal Audit Governance Board Secretariat, or IAGBS, is responsible to shape the financial management capability within the various ministries and agencies of the Liberian government, by supporting national priorities, and cooperating and collaborating to promote fiscal control. The IAGBS is to conduct unremitting audit to ensure efficient risk management, governance and control processes. The Secretariat is responsible to audit accounts and disbursement transactions, payroll system, bank settlements, procurement practices, system for budgetary control, and asset management system. This is intended to save the Liberian government from losing millions of dollars at public functionaries. 1

The core link between the responsibilities of MPW and the IAGBS as it relates to this Paper is the audit of asset management system . The MPWs infrastructure asset management require planning, designing, estimating, tendering, supervising construction, and operating and maintaining public civil engineering systems, and in order to achieve fiscal discipline and gain from lessons learned, the MPW need an independent partner, like the IAGBS, to provide evaluation and recommendation to assist the Executive branch of Government with greater innovation and new technologies that can improve the performance of public infrastructure and increase public trust in the MPW. Justification for Technical Audit: To ensure the MPW achieved its goals, services and critical benefits, MPW must undergo technical auditing of infrastructure projects undertaken by the Ministry, which is a step in the right direction towards ensuring that public infrastructure projects undertaken in Liberia are appropriately designed, constructed, and operated and maintained. Financial auditing of public funded projects is ongoing but it is the technical audit, which have not received the much-needed attention. The need for technical auditing is based on the fact that very recently, the public has tended to believe that some of the projects implemented by the MPW have either failed pre maturely and/or are in the process of exhibiting distress eventually leading to failure in the near future. The paradox is that it has not been possible to portion accountability to parties involved in the contract. It is hoped that MPW authorities, administrators and partners will start thinking about conducting technical audit of infrastructure projects in order to guarantee that the government and public in general get value for investment incurred. The majority of public infrastructure in Liberia is constructed or rehabilitated through a process of design by an appointed consultant and construction by a contractor, adherent to the project specification. These arrangements have both success and failure in shaping the way the project is implemented. On completion of construction, the Governments Auditor General may carry out a financial audit, but no independent technical audit of whether the infrastructure has achieved what it paid for, is carried out. On completion of construction, a MPW team consisting of the project officer, design engineer, materials engineer, maintenance engineer and other relevant staff inspects the structures, together with the consultant, and identify deficiencies and defects, which the contractor has to correct, within the defects liability period, before demobilizing. This post-construction inspection presently carried out is fundamentally a visual evaluation and does not usually pinpoint whether the specified materials have been used during construction or if the quality of the construction conforms to the design specification. Technical or contractual weaknesses and construction defects that are not identified at this time often result in premature distress, which may occur after the specified defects liability period, making it difficult for the MPW to have sufficient recourse to claim from the Contractor. 2

The use of a formal technical audit initiated before, during, and after construction allows the MPW to identify whether the ministry has in place the effective management system to include all the necessary quality assurance and quality control measures, and identified risks and reduction measures, and ensure the parties involved in the contract have given the Client what it paid for. This involves a more detailed assessment than the post-construction inspection in terms of compliance of the materials and construction with the project management and design specifications. The primary objective of independent technical audit is to assist the MPW and Consultants appointed to carry out technical audits with assessing the required scope of the audit and identification of the appropriate requirements and techniques to be employed for such audits. The primary aim of these audits is to ensure that the MPW has in place the engineering project management system, including quality management, risk management, and change management systems in place before, during and after construction, and that the infrastructure is constructed to the design specifications, the Contractor is paid as per the contract conditions, and the facility is smoothly rolled into operations and maintenance through an effective O&M training program that provides the public/end-users the education required to use the facility. Technical Audit Guideline Document: The technical audit guideline shall be a document agreed and accepted by both MPW and IAGBS to ensure the process is conducted effectively and efficiently. This document will include the following outline, which must be detailed in cooperation with both parties and the documenter. Section One: General information 1.Introduction Background Structure of the Guideline 2.Technical Audits: General Procedures Introduction and General Requirements Role and Responsibilities of the Technical Audit Team Relationship of the Auditor with the MPW, IAGBS, Consultant and Contractor Project Familiarization Initial Audit Intermediate Audit Final Audit Section Two: Practical Aspects 3. Data Requirements General Project Familiarization 3

Consultants Design and Drawings Tender Documentation Bills of Quantities Initial Audit Intermediate Audit Laboratory Test Results Construction Records Quality Assurance and Quality Control Data Site Correspondence Variation Orders and Contractors Claims Measurement and Payment Certificates Project Management Problems and Issues Final Audit Construction/Completion Report Performance of the Infrastructure to Date Quality Surveys Information on Lessons Learned Required

4. Scope of Post Construction Audit Assessment of Data and Compliance with Requirements Variability Structure Materials Compliance Construction Quality Other Provisions Scope and Complexity of Post Construction Audit 5. Post Construction Audit Procedure General Uniform Sections Response Assessment In Situ Strength Observations Tests and Commissioning Section Three: Analytical Aspects 6. Assessment of Audit Results Contractual Implications Design Compliances Material Compliances Construction Compliances Quality Compliances Risks Management Compliances Change Management Compliances Consequences and Implications


7. Reporting

General Information Familiarization Phase Initial Audit Intermediate Audit Final Audit

Section Four: References and Appendices References Appendix 1: Information Checklist For Technical Audits Appendix 2: Abbreviations List of Tables Type and Scope of Post Construction Audit List of Figures Layout of the Guideline Auditing stages, Flowchart Technical Audit, Flowchart Conclusion: The need for technical auditing of the Public Works Ministry cannot be overemphasized, as this will assist the ministry obtained an established infrastructure management system or process and manual or publication that can explain to the public as well as international financing bodies and other investors the efficiency and accountability of the ministry in the planning, design, construction, and operations and maintenance of public infrastructure in Liberia. To ensure the Public Works Ministry and Internal Audit Governance Board Secretariat conduct technical auditing cooperatively and collaboratively, it is important both institutions agree on a technical auditing guideline that includes all the required phases, processes and procedures that promotes the enacted objectives and visions of both organizations and the mandate of Executive branch of the Government of Liberia. ________________________________________________________________ About the Author: John Constance is a Liberian with degrees in Architectural Engineering and Construction Engineering, and a Masters Certificate in Project Management. He is a member of the UK institute of Civil Engineers, the US Project Management institute and the American Society of Quality, and an Affiliate member of the American Society of Civil Engineers. He has more than 23 years work experience in construction and infrastructure planning, design, construction and operations and maintenance, starting his career with the Ministry of Public Works in Liberia. For the past six years he has worked as UNICEFs construction auditor in Indonesia, and Technical Officer for a US NGO in Sothern Sudan, and recently ended a 22 months assignment in Afghanistan for a US private company serving as Senior Quality Assurance and Construction Manager and Project Management Capacity Building Advisor respectively. He is presently doing his dissertation with the University of Liverpool that will lead to a Masters degree in Project Management for Construction and Infrastructure in 2013. 5