A recent audit showed we spend around $136.8 million per year on consultants. For a city of our size, this is a serious problem that seems to keep on growing. From 2017 to 2019, consultants contracts grew by over 32%.
Consultants have become an equally growing and serious problem in regards to civic cashflow. In another city audit, a sample of 25 consultancy contracts were looked at. The scope of this audit included was how original contracts are increased through something called “change orders”. In the private sector this is often referred to as “scope creep”. I have been concerned with scope creep for years as it reduces the value Edmontonians are receiving from our contractors.
If you haven’t already, please take a look at my IPMO policy and the billions being flushed down the drain with scope creep on capital projects by clicking here.
In 2016, the auditor conducted a wide range of audits on consultants and found something quite shocking. 44% of the audits completed contained change orders [scope creep] that were not properly authorized. You can view the 2016 audit here
44% of the audits contained change orders [scope creep] that were not properly authorized.
In 2021, we saw an update to this audit. The previously used unauthorized term from 2016 was updated to unplanned in this most recent report. So what does this report show? Well, in 2019 there were 251 change orders (ie. scope creep) as part of this audit. 153 of them were planned. 98 were unplanned. This shows that 39% of change orders were still not properly planned for. In conclusion, the problem still exists.
This shows that 39% of change orders were still not properly planned for.