Project Governance: Panacea to Public Sector Project Corruption Risk
The Parliament’s Public Accounts Committee Report on the 2017 Forensic Audit Report on ZINARA, hereinafter called ‘The Report,’ is captivating. I could not put it down. It took me a couple of hours of intrigue as if I was reading a best selling suspense thriller. The thriller’s end was however tragic, concluding thus, “The extent of the omissions and commissions at ZINARA, the extent of the corruption and the extent of the of the extraction is huge.” The report points to serious governance weaknesses in both operations management and project execution, giving opportunity to the risk of corruption.
A litany of ‘omissions and commissions,’ that prejudiced public funds to the tune of several million US dollars are highlighted in The Report. These ‘omissions and commission,’ were made possible by lack of or weak operational governance and project governance. A number of the contracts entered between ZINARA and certain vendors are reported as ‘legal fiction.’
This article makes a few recommendations on the implementation of professional project management and project governance structures to mitigate the opportunity for corruption risk. A key recommendation that I would like to highlight is the need for harmonizing organizational project management (OPM) across the public sector entities under the mandate of a centralized Project Management Office (PMO).
OPM encompasses strategic alignment in project appraisal and prioritization within a portfolio, standardization of project management methodology, project governance, competency management, monitoring and reporting for public sector project portfolios using an on-line Project Management Information System (PMIS).
It is not enough to have centralized oversight at procurement, e.g. the Procurement Regulatory Authority of Zimbabwe (PRAZ). But it is essential even more so to have centralized oversight at project execution. That would greatly improve the probability of project success and reduce corruption induced project failure. Furthermore this would facilitate and complement the job of the Auditor General when following up on governance issues. Let us look at best practice from across the globe.
Several countries have instituted centralized PMOs for overseeing their public sector project portfolios. A good example is the Infrastructure and Projects Authority (IPA), UK (https://ipa.blog.gov.uk/). In its 2020 Annual Report, the IPA states, “The Infrastructure and Projects Authority (IPA) is the government’s centre of expertise for infrastructure and major projects. It sits at the heart of government, reporting to the Cabinet Office and HM Treasury. The IPA works across government to support the successful delivery of all types of major projects, ranging from railways, roads, schools, hospitals and housing to defence, IT and major transformation programmes.”
Another country with a centralized project management office is Canada. It is termed the Major Projects Management Office (MPMO https://mpmo.gc.ca/). Its mandate is “(1) to provide overarching project coordination, management and accountability for major resource projects within the context of the existing federal regulatory review process; and, (2) to undertake research and identify options that drive further performance improvements to the federal regulatory system for major resource projects.”
The Indian Government monitors projects through the Project Monitoring Group (PMG https://pmg.dipp.gov.in/), which reports directly to the Indian Prime Minister. The PMG’s main goal is “to play an important role for expediting implementation of large-scale projects. It has established itself as the go-to investor facilitation cell for issue resolution and for the removal of regulatory bottlenecks for large-scale public, private and ‘public-private’ partnership projects.”
It can therefore be seen that there are a number of governments with centralized PMOs. These offices are the centers of excellence for carrying out OPM activities, inter alia, strategic alignment assessment and selection, project prioritization, project management methodology standardization, project governance and competency management in the form of skills training, and centralized project performance reporting.
As part of the OPM activities, all the major projects are managed, monitored and reported and transparently using on-line Project Management Information Systems (PMIS), which can be accessed by the relevant stakeholders, such as the central PMO, project steering committees, project sponsors, project managers, and project teams. That way, project success is enhanced and project failure, which may be accompanied by opportunistic corruption, is mitigated.
However a PMIS without the requisite project management competency becomes a dud. At the core of the best practice in setting up of a centralized PMO is the focus on competency management. The problem is that the task of project management of major public sector projects is done by ‘good’ subject matter experts (SMEs) who have very little or no knowledge of the project management processes. These are termed ‘accidental project managers’ as they would have been accidentally appointed as project managers without the requisite skill to run complex projects. They do not qualify to be called project managers.
In such cases where the SME is appointed as the entity’s project manager, there is a mismatch between the vendor’s experienced and professional project management competencies and client’s weak competencies. This results in the client entity putting great reliance on the vendor’s project management expertise. This is a disastrous form of ‘state capture.’ Vendor performance has to be closely monitored by the client’s independent and competent PMO.
Furthermore, the work place has dramatically shifted in that traditional operations management, which is the routine ‘business as usual’ is being taken over more and more by a projectized work environment. Executives, senior managers, etc. are spending proportionally more time in project work than in operational work due to the rapidly disruptive and changing business environment requiring constant transformation. Previously highly competent operational managers are finding themselves highly incompetent because their skills are getting less and less appropriate. Most competent operations managers are not skilled in project management practices. When they oversee project work or are charged with project governance, the probability of failure is high.
What is therefore required is competency training across the whole public sector. There is need to reskill quite a large proportion of the public sector operatives. Setting up a centralized PMO where only the PMO personnel are the ones who are au fait with the project management processes will lead to mutual frustration between the centralized PMO and functional managers, as the processes are highly intrusive across the entire organization. All project stakeholders will require to have some knowledge of the processes in order to ensure successful performance.
The project management competency entails knowledge of processes encompassing at the core, project scope management, project cost management, project schedule management, and project quality management. The accompanying component ‘soft skill’ competencies that require to be mastered are project resource management, project risk management, project communications management, project procurement management and project stakeholder engagement. Add to these leadership skills and commitment to professional and ethical behavior. Ignoring any of these process competencies gives opportunity to the risk of corruption and the attendant risk of project failure.
Proper project governance will make sure that projects are completed within the planned Performance Management Baseline (PMB), that is within the planned scope, cost and schedule metrics. Quality of the project deliverables is part of the acceptance criteria. Variances to the planned PMB have to be within acceptable levels. Very few public sector projects would then be reported to be completed way outside the acceptable PMB variances, e.g. more than 10% over budget, and 10% over schedule. There are projects which have gone 1000% above planned budget and some 1000% above planned schedule.
The Project Management profession itself is rapidly morphing with Agile methods such as SCRUM now taking center stage due to the disruptive threats and opportunities in the business environment that demand strategies such as digital transformation, business process re-engineering, and product innovation.
Project Management competency training would put paid to the ZINARA Report’s finding which stated, “The Committee also makes the finding that corruption at ZINARA, amply demonstrated in this Report was as a result of unqualified persons deliberately recruited to emasculate the institution.”
With the recommendations added herein, I concur with The Report, which urged thus, “The Committee trusts that the Executive shall react with urgency and panic to the finding of this Report and ensure that the measures are taken to ensure that the country’s institutions are never captured and subverted in the manner that ZINARA was.” I am certain the ‘urgency and panic’ goes beyond ZINARA as there may be other public sector entities with contracts that are ‘legal fiction’.
Engineer Tororiro Isaac Chaza, B. Sc. Eng|MBA|PMP®|SMC®
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