Bureau of Audit
Audit Report on New York City Housing Authority Oversight of the Construction Management/Build Program
MARCH 15, 2012
AUDIT REPORT IN BRIEF
Download the Complete Report (pdf 192KB)
The New York City Housing Authority (Authority) provides affordable housing to nearly 404,000 City residents in 334 city-wide housing developments of 178,910 apartments. The Authority’s Five-Year Capital Plan for Fiscal Years 2011-2015 provides for $2.4 billion for infrastructure, modernization, and other systemic improvements to Authority housing. To carry out some of these improvements, the Authority implemented a construction management/build (CM/Build) program in 2003 “to improve the quality of construction projects and ensure that they are administered effectively and efficiently.” Under the current phase of the program, the Authority awarded CM/Build requirement contracts totaling $425 million to 10 construction management companies.
Although the City allocated approximately $144 million to the Authority during the Five-Year 2011-2015 capital plan, none of these funds were included in the CM/Build program that we audited. Nevertheless, we chose to carry out the audit to identify any systemic deficiencies that could affect capital improvement projects in which City funding is being used.
The Authority uses a computerized project management system, Primavera, to track critical project information such as budgets, project schedules, project updates, critical issues, requests-for-information, change orders, and payments to ensure that projects are completed on time.
Audit Findings and Conclusions
We identified deficiencies in the way the Authority monitors projects in the CM/Build program. The Authority’s in-house staff of construction project managers maintains adequate oversight of the CM/Build construction managers. However, the Authority’s senior officials are hampered in their ability to adequately oversee CM/Build projects because of problems with obtaining accurate and complete information from the Primavera system. In addition, the Authority lacks a method for tracking and identifying those change orders whose tardy resolution led to delays in completing construction and closing out project work. As a result, senior officials were unable to respond promptly to delays in completing construction and closing out projects.
Moreover, while the Authority properly assigned in-house staff to the project locations to oversee the CM/Build program, the decision to assign the staff on a full-time basis may indicate that the Authority lacks confidence in the effectiveness of the construction management companies that were employed to carry out the CM/Build program. If the Authority assigned its in-house staff to the project locations on a part-time basis, the Authority could save $1,529,488 annually.
We did not observe any problems with the quality of the construction work for the projects that we sampled. Furthermore, our review of payment requisition logs in the Primavera system indicated that Authority personnel were appropriately reviewing and processing payment requisitions.
This report makes a total of seven recommendations, including that the Authority:
- Ensure that accurate and complete information is recorded in and obtained from the Primavera system.
- Ensure that CM/Build projects are completed and closed out within their originally scheduled timeframes.
- Consider the viability of assigning in-house construction project managers on a part-time basis to oversee the CM/Build program.
- Regularly update the “Required Documents” and “Bi-Week” updates sections in Primavera.
- Ensure that CPD Portfolio Tracking Reports contain information about all projects that have not obtained an “A” notation in the Primavera system.
- Designate timeframes for carrying out all the steps required to process change orders, including initiation, estimating, negotiation, and approval.
- Track designated change order timeframes in the Primavera system and CPD Portfolio Tracking Reports.
In its response, the Authority agreed with four recommendations and disagreed with two recommendations. One recommendation—to ensure that accurate and complete information be recorded in the Primavera system—was not directly addressed by the Authority. However, while acknowledging that Primavera lacked meeting minutes, the Authority contended (but did not provide supporting documentation) that it conducted meetings with project managers and senior staff.