NSW:NSW taxpayers lost $188m on BER: audit

AAP General News (Australia)
12-07-2010
NSW:NSW taxpayers lost $188m on BER: audit

By Adam Bennett

SYDNEY, Dec 7 AAP - Taxpayers may have paid $188 million too much for the federal government's
Building the Education Revolution (BER) stimulus program in NSW, the state's auditor-general
says.

Although construction work under the scheme was rapid, building costs were too high
and the wishes of school communities were often ignored, NSW Auditor-General Peter Achterstraat
said.

In 1270 cases the Department of Education had accepted cost estimates from managing
contractors, which were a total of $188 million above department estimates, his latest
financial audit found.

Of the nine schools examined by Mr Achterstraat, eight had costs between two and 40
per cent higher than estimates from an independent quantity surveyor.

"Whilst the Department of Education appears to have achieved its key objective of rapidly
constructing school facilities, costs were higher than business as usual and the preferences
of local communities were not always met," Mr Achterstraat said in a statement.

"Irrespective of time constraints, the department should not approve estimated construction
costs that are substantially higher than the department's own assessments.

"They should investigate significant variances, negotiate with the managing contractors
and set the estimated costs based on their own assessment, not the managing contractor's
assessment."

Parents also questioned whether the BER represented value for money, with just 40 per
cent of 68 schools surveyed by the auditor-general happy with the cost of their projects.

"Parents are asking why did our building cost so much, and why did we get a library
when we wanted a hall," he said.

The auditor-general's damning findings echo earlier investigations of the state's handling
of the contentious BER program.

A NSW upper house inquiry in September found value for money wasn't achieved on some
projects, while a number of schools were lumbered with buildings unfit for their purposes.

A separate, commonwealth-commissioned report, headed by banker Brad Orgill, named NSW
public schools as faring the worst under the BER program after they recorded more than
half the 254 complaints of the entire program and the highest cost per square metre.

NSW education minister Verity Firth defended the state's BER performance, saying the
construction costs referred to in the auditor's report were only estimates and did not
reflect actual costs.

"Once actual construction costs are finalised, we will have a better idea of the program's
final costs," she said in a statement.

"It's important to remember the economic situation the world was facing when the BER began.

"Our estimates are that it will end up between five to ten per cent more than business
as usual, so yes, we paid more than the usual cost.

"But let's be clear - the BER saved jobs, it saved NSW and it saved Australia from recession."

Opposition Leader Barry O'Farrell said alarm bells should have been ringing within
government about the inflated prices being paid to managing contractors.

"The auditor-general's report shows that time and time again, the department accepted
tenders that were between two and 40 per cent in excess of the estimates of those jobs,"

he said.

"No alarm bells rang and as a result taxpayers didn't get value for money."

AAP ab/tr/jl

KEYWORD: SCHOOLS NSW

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