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May 5, 2010

The BER Audit Report

"The Australian National Audit Office today released the audit report "Building the Education Revolution - Primary Schools for the 21st Century" that government has been sitting on for

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“The Australian National Audit Office today released the audit report “Building the Education Revolution – Primary Schools for the 21st Century” that government has been sitting on for a few months. You can download it in all its glory here.

Update: This post is mostly for those that have read the report – if you want a primer on what it says, Grogs Gamut has the good oil.

Considering the criminally flatulent quality of the reporting that went on with the Hawke report into the insulation program, or for that matter, the recent reporting of just about any serious piece of marginally complex evidence (The Minter Ellison Risk Register springs to mind!) – as the media reports roll in, feel free to vent spleen at any erroneous piffle you come across since we all have access to the actual audit report itself.

UPDATE:

So far – The ABC gets it wrong (see comments) has replaced it’s original reporting with a far more accurate piece by Emma Rodgers.

Originally the ABC used the same nonsense that The Oz does to get it wrong.

The Oz goes:

While Ms Gillard and Kevin Rudd have spent months lauding the project for providing jobs for “tradies” the report suggests the jury is out on the success of the program.

“In particular arrangements established to monitor the effect of the BER program on employment have relied on data collected at the project level,” the report says.

“This data cannot be aggregated in a meaningful way to inform an assessment of progress against BER program employment outcomes that would complement the macroeconomic modelling for the broader National Building and Jobs Plan.”

Except that the report isn’t saying what they think it is saying.

The actual quote from the report The Oz is using comes from page 42.

A substantial majority of Education Authorities questioned the usefulness of some of the monitoring arrangements they were expected to undertake for the BER program. In particular, arrangements established to monitor the effect of the BER program on employment have relied on data collected at the project level. This data cannot be aggregated in any meaningful way to inform an assessment of progress against BER program employment outcomes that would complement the macroeconomic modelling for the broader Nation Building and Jobs Plan undertaken by the Treasury

Yet the report also says on page 23:

The responsibility for monitoring and reporting performance under the Nation Building and Jobs Plan is shared at the Commonwealth level by the Treasury, the Coordinator‐General and DEEWR. The Treasury has responsibility for modelling and reporting on the economic effect of the plan, as well as other stimulus measures.

What the ANAO found was that DEEWR data on the number of jobs created at the local level contains too much uncertainty for it to be aggregated up to the national level and be used as a substitute or even complement to Treasury analysis- a fact that DEEWR itself was always open about.From page 139:

DEEWR has informed the ANAO that the jobs data collected from Education Authorities and schools has limited application and is generally used to inform an understanding of jobs supported on a project‐by‐project basis. The department also advised that all measurement tools have limitations and that the objective of collecting project level data was to provide local communities with information about the jobs supported by individual projects at schools. These data complemented the macro‐level monitoring undertaken by the Treasury across the economic stimulus plan, but were never intended to be aggregated to provide a picture of jobs supported through BER P21. The inability to aggregate project level data means that it is not currently possible to accurately determine the effect of the BER program on employment.

That isnt saying “the jury is out” as The Oz alleges, for we know already from Treasury that the BER has created substantial jobs at the national level through increasing investment in construction. What is being said here is that we can’t accurately say exactly how many jobs were created from just the BER alone.

The final point in the audit report, 7.36 on page 168 sums it all up:

Overall, there are some positive early indicators that the program is making progress toward achieving its intended outcomes, despite the slower than expected implementation of the program. Lead economic indicators, including construction approvals, indicate that the introduction of BER P21 has contributed to a reversal in the decline in non‐residential construction activity that resulted from the global financial crisis. Education industry stakeholders, including peak bodies, Education Authorities and a substantial majority of school principals have also been positive about the improvement in primary school facilities that will result from the program.

UPDATE 2:

It’s also worth repeating point 7.28 – as it goes to the heart of News Ltd fairy tales that get mindlessly regurgitated by the rest of the commentariat.

In many cases, concerns from principals and community members about value‐for‐money relate to a misunderstanding of the building standards Education Authorities are expected to adhere to in building education infrastructure. This was pointed out, for example, by the NSW Department of Education in its submission to the Senate Education, Employment and Workplace Relations Committee Inquiry into BER P21:

It should be noted that local quotes are often found to be competitive with those obtained through the Managing Contractors’ tender processes. However, there have been instances where local quotes have been presented to the BER Program Office which at first glance appear far less costly than their estimates, but which on further examination did not represent value for money in terms of quality of the product required to meet the Schools’ Facilities Standards.220

It cites footnote 220 which reads:

NSW Government Submission to the Senate Education, Employment and Workplace Relations Committee Inquiry into the ‘Primary Schools for the Twenty First Century’, p. 9. The department also noted: At Epping North Public School for example, a parent and builder on the [parents’ and citizens’ committee] indicated he could complete the building works cheaper than the managing contractor’s estimated price for a hall, [covered outdoor learning area] and canteen. The BER [integrated program office] arranged for the managing contractor to include this builder in the tender process. His quote was the most expensive option at well over $3 million for the project—or 50 per cent higher than his original claim.

.

Possum Comitatus — Editor of Pollytics

Possum Comitatus

Editor of Pollytics

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34 comments

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34 thoughts on “The BER Audit Report

  1. Strutting and fretting upon the right-wing stage

    […] detailed information can be found from Crikey’s Possum and Grogs Gamut, which also demonstrates that The Australian‘s criticism of the […]

  2. The ANAO Report on the BER: Fact meets the Narrative | Acne Treatment and health solutions

    […] other is Possum, whose article on the report is an absolute must read (in fact if you haven’t read it yet, stop reading this and click on the […]

  3. autocrat

    JBG, you seem to have a problem readings. Are you a journalist?

    Specifically:

    1. Page 24 says nothing of the sort. I’ll assume you just made it up, or read it in The Australian.
    2. Page 18 says nothing of the sort. I’ll assume you just made it up, or read it in The Australian.
    3. The jobs statistics is the task of Treasury. This has been covered in detail above.
    4. So what? There’s a full explanantion of why this occured in the document (and it isn’t a “blowout”).
    5. You’ve fudged that – its says commencement milestones, not construction deadlines. If you’ve ever been near any sort of project you’d understand the difference.
    6. The only “disquiet” about levels of consultation was on the amount of time they had to do it. Only 11% disagreed with “Consultation with my school community enabled a consensus to be reached about how our BER P21 funding should be used (P184-5).
    7. Section 7.28 on the same page as that “value for money” graph is a must-read for people who who’ve got that far. I think you must have missed it though:

    7.28 In many cases, concerns from principals and community members about value‐for‐money relate to a misunderstanding of the building standards Education Authorities are expected to adhere to in building education infrastructure. This was pointed out, for example, by the NSW Department of Education in its submission to the Senate Education, Employment and Workplace Relations Committee Inquiry into BER P21: It should be noted that local quotes are often found to be competitive with those obtained through the Managing Contractors’ tender processes. However, there have been instances where local quotes have been presented to the BER Program Office which at first glance appear far less costly than their estimates, but which on further examination did not represent value for money in termsof quality of the product required to meet the Schools’ Facilities Standards.

    Please try to read for meaning in future.

  4. B.Tolputt

    I too seem to be yelling at the radio much more often these days.

    Yeah, same here. The missus tells me it is a natural part of getting old. I don’t know what she is talking about… back in my day everyone shouted at the radio 😛

  5. JBG

    What about:

    • that the guidelines and roll-out of the programme made it possible for rorting, price gouging, waste and mismanagement to exist, and indeed flourish (page 24);
    • that the programme design means schools are not getting the projects that they actually want or need (page 18);
    • that it is virtually impossible to assess the success of the programme against the benchmarks that the governments itself has set, such as job creation (page 24-25);
    • that the Minister for Education, Julia Gillard and the Prime Minister, Treasurer and Minister for Finance all knew the initial funding was insufficient to cover the costs of the programme resulting in the $1.7 billion blow out (page 16, 22-23);
    • that projects are massively behind schedule, with only 18.6 per cent having met the construction deadlines imposed by the Government (page 15); and
    • there is a large degree of disquiet among the school communities about the levels of consultation as well as value for money achieved (among those schools on whom designs have been imposed from above (i.e. mostly state schools), only around 40 per cent agree that their project represents good value for money (fig 7.9, page 164).

  6. Country Kid

    Vote1maxine

    Not to mention the long term legacy of the science labs, libraries, class rooms – for the next 40 – 50 years. Too often in the past, there has been money thrown at ’employment programs’ which have been not much more than digging holes and filling them up.

    The ongoing benefits of the BER will be around long after some of us have fallen off the perch.

  7. Andos

    “I was actually angry at the radio as I was driving along.”

    I too seem to be yelling at the radio much more often these days.

  8. Mobius Ecko

    @24

    According to someone from the NSW Principals Association, who was on ABC Illawarra yesterday afternoon, they took their own survey of just NSW principals and out of over 200 surveyed (an exact figure wasn’t given) 100 or more were dissatisfied. The spokesman then admitted he hadn’t read the report as did Nick Rheinberger of the ABC, but what followed was a complete beatup of the BER canvassing many of the negative points mentioned in this topic. The beatup was based on what both of them had heard or read in the MSM and the Principals Association representative citing his “experience”, which when broken down was mostly hearsay.

    The entire interview was “I heard that…”, “Someone told me that…”, “I have read that…”, “I believe that…” etc. in what was one of the worse beatups I’ve heard, to the point I was actually angry at the radio as I was driving along.

  9. vote1maxine

    Postscript

    Grog expresses, much better, what I’m trying to say with backing research here:

    http://grogsgamut.blogspot.com/

  10. vote1maxine

    Morning Poss

    What I don’t understand about the mis-reportage about the BER is how do the MSM think they can get away with such deliberate untruths? Despite the following:
    1) A majority of Principals are happy with the program.
    2) ditto the parents of kids benefitting from the program.
    3) The thousands of construction workers kept in employment
    4)The hundreds of construction companies with contracts that otherwise would have very little work.
    5) The employees of the above companies kept in employment.
    6) The families of the above construction workers benefitting from the income that otherwise wouldn’t exist.
    7) The consultants (Architects, Engineers etc) kept in employment.
    8) The suppliers of the materials for the buildings with additional contracts.
    9) The families & employees of the consultants and suppliers.
    10) The economic benefits readily apparent in smaller communities.
    11) etc etc

    The BER has had and still has a huge economic and social multiplier effect throughout the whole country. All the above beneficaries vote. Has there been a poll re the BER lately?
    How can the MSM get away with this? Thank God for web blogs like this that report the truth.

  11. calyptorhynchus

    However, the ABC are up to writing stupid headlines again.

    This morning:

    “GOVERNMENT CONTRADICTED
    Almost 30 per cent of principals surveyed believe they are not getting value for money from the $16.2 billion school building program.”

    So, over 70% of principals are satisfied?

  12. Possum Comitatus

    The original ABC piece linked to in the post has been replaced by the ABC with a much more accurate job by Emma Rogers. Just to clarify and not wanting to pour shit where it doesn’t belong.

  13. shepherdmarilyn

    See the crap published by the mile by Ferrari and Franklin in the OZ. It’s truly pathetic that they are still going on with their twisting and turning as if we can’t and don’t read the reports ourselves.

    Not a mention of that dodgy chap by the way.

  14. Grog

    See the picture and caption.

    Nice pick up – interesting how the headline is negative but the smaller pic and capiton is positive. …

  15. Dee

    So Abbott is Murdochs chosen PM.
    News Limited and it’s associated organisations are winning the ‘perception’ game.
    What can be done?

  16. Country Kid

    There is no pleasing some people. The BER is criticised because there was too much government ‘control’ yet the insulation roll out is criticised because there was too little control.

    Some time ago I did some back of the envelope calculations about the number of BER complaints relative to the projects. Can’t remember exactly what the numbers were, something in the order of 16,000 projects across the three areas: pride in schools, primary school for 21st centuary, & science/music. The MSN talk about 100 complaints, so even if that is doubled to around 200, then the % of problems is small when you Divide 200 by 16,000.

  17. Gail

    I suspect that the loudest voices in opposition to BER’s construction of school buildings have NFI about the small to medium commercial construction industry. Without this program, many small to middling commercial construction companies would probably have been in severe financial difficulties (or failed) in the last two years. New and retrofit construction dried up very quickly in 2008 and early 2009. Calls for tenders in the private market almost disappeared. There is a lot more to the construction industry than a couple of big name developers. I had the opportunity to read some of the quality and management requirements in the tenders for these projects. They were considerably more onerous than a private or development would normally be. In addition, the administration of the various projects was much tighter than a bog standard small commercial project.

    What would have been better? Having Australia fall into a deep recession so the carping classes could feel happy and superior to 10,000s people in unemployment. Maybe the same people would now be calling for dole bludgers to be executed? For all its faults, the construction industry is a major employer. I recall the recessions in 1979-1980s (10% unemployment and 17% interest rates under John Howard, Treasurer) and the recession of the early 1990s. The company I worked for in 1991 went from 65 employees to 17 in less than 12 months in their local state office with similar losses in other states.

    Although the ANAO felt unable to assess the affect of this program on employment, surely Australian’s unemployment levels would have been similar to those in the USA and Europe had the government not taken some actions; like BER and the insulation program.

    I get rather irritated with the constant carping from those with some sort of political agenda or personal complacency taking a “she’ll be right, mate” attitude to other people’s jobs and survival. What purpose would have been served to have massive crashes of construction companies with all the associated fallout in services and suppliers? For all the failings of the insulation program and BER, both were a major economic stimulus that assisted Australia in surviving a financial disaster, generally agreed as, having been caused by the incompetence of the finance industry. A finance industry that didn’t even understand their own activities but were happy to sell any sucker they could find and take no responsibility for the results. The same incompetent financial industry, along with their toadies in the media, which is now howling about governmental actions. Sadly they were/are the main beneficaries of the actions taken by government like the protection provided to our banking oligopoly. Perhaps we should have ended up as Greece has so the carping classes could feel even more complacent when pointing the finger at government actions.

    What small and ignorant minds make up the Australian whingeing classes.

  18. paddy

    Love your work Possum.
    The devil’s in the footnotes. 🙂

  19. shepherdmarilyn

    I actually read this report as well as the Hawke report and this says the program has been very successful.

    Loved the highlight of the tosser that Justine Ferrari interviewed who over charged by 50%.

    The media have believed their own spin on this for the past 12 months and many journos should be sacked for their level of incompetent reporting.

    Katharine Murphy in the Herald tried satire, but she didn’t read the report.

    Not one of the tossers bothered to read the massive level of consultation that went into the program while they continue to whine that money was just thrown at the program without consultation.

    Most districts hired their own people according to the report and most programs are on budget with 97% of building under way.

    I want to post pictures of my tiny little school.

    http://www.pinnaroops.sa.edu.au/recent_events/recent_events.htm

    I was at this school for 8 years before it became just a primary school. It had old ashphalt play areas, no shade, no fridges, no nothing.

    With years of drought it is a poor area these days and large numbers of the population have left.

    I asked a cousin who taught at this school what the school things of the improvements and she said they were stoked.

    This work shows that the program was quite flexible in spite of original hiccups.

    I am proud of my mates for doing things this way for their kids for the next generations to come.

    Other schools in the area have done just as well.

    The MSM ought to read the long and detailed survey at the end of the report and publish every word of it.

  20. Durutticolumn

    SMH heading Audit slams Rudd’s primary school building program. It does? ABC is doubling down

    “States stymied by school stimulus rules” I thought criticism of insulation was there wasn’t any regulation now there is too much. How about this for sheer cheek once again in ABC report: “Opposition education spokesman Christopher Pyne said the report showed there were deficiencies in the way the program was administered.

    “He has found real issues with the way the guidelines have been administered by the Department of Education,” he said.

    “Essentially he has found there’s been an over-bureaucratic approach to this program.”

    Opposition Leader Tony Abbott says the program was set up to fail.

    “What it does highlight is the need for a full judicial inquiry,” he said. Will all these claims go unchallenged? U bet.

  21. ronin8317

    The SMH article played around with the numbers a bit : projects which are granted extensions are counted as ‘not meeting completion milestone’. >_<

    I believe the current 'narrative' being pushed by the main stream media is 'Kevin Rudd Bashing'. This is also apparently in an article yesterday on how Kevin Rudd 'fumbled' the 'Super-Profit' explanation for the miners when what he said was pretty clear.

    The reality is not as important as perception, and the Labor Party is losing the perception war right now. What are the spin doctors?

    [Sorry Ronin, you were hanging out in the spam bucket for a bit. Apols – Poss]

  22. You’ve got to accentuate the negatives… – Pure Poison

    […] has Bernard Keane’s analysis here; Possum also has commentary. Read those for a run-down of what the report says. In essence, it seems the BER program has come […]

  23. Dario

    I wouldn’t call it amusing, I’d call it fraud

  24. Possum Comitatus

    Next dross up:

    Audit slams Rudd’s primary school building program!

    http://www.smh.com.au/national/audit-slams-rudds-primary-school-building-program-20100505-u98l.html

    Which is amusing, since it did the exact opposite.

  25. Dario

    The ABC is almost a joke now… *waits for Shows On to staunchly defend it*

  26. DodgyKnees

    ABC OnLine is getting worse.

    This morning there was:
    Acropolis stormed as mining tax hits global markets
    http://www.abc.net.au/news/stories/2010/05/05/2890397.htm
    Must have been Hades leading the Greek Miners.

    ABC Complaint:
    http://www.abc.net.au/contact/complain.htm

  27. Possum Comitatus

    I’ve updated the post.

    Nearlythere – not often!! 😀

  28. Nearlythere

    Hey Possum. When was the last time you saw “Peason Chi Square” in a government report? (p94 of the audit)

    Nearlythere

  29. autocrat

    To clarify, “very shoddy” refers to what used to be the ABC but now looks more like a News corp subsidiary.

  30. Possum Comitatus

    autocrat,

    That story missed the point made in Section 42 of the Summary:

    [The design of the monitoring arrangements agreed between the Coordinator‐General and DEEWR for BER P21 did not adequately reflect the devolved nature of the program implementation or acknowledge that detailed monitoring at the project level is most suited to arrangements between Education Authorities and schools. Under current arrangements, Education
    Authorities have provided DEEWR with a broad range of data, some of which the authorities were not well placed to collect or interpret, which the department and the Coordinator‐General have been unable to use effectively
    to inform an assessment of program progress. A substantial majority of Education Authorities questioned the usefulness of some of the monitoring arrangements they were expected to undertake for the BER program. In particular, arrangements established to monitor the effect of the BER program on employment have relied on data collected at the project level. This data cannot be aggregated in any meaningful way to inform an assessment of progress against BER program employment outcomes that would complement the macroeconomic modelling for the broader Nation Building and Jobs Plan undertaken by the Treasury. In instances such as this, where it has not been possible to obtain valid data to effectively assess progress against measures and outcomes established for the BER program in Schedule D of the NPA, it would have been prudent for DEEWR, in consultation with the Coordinator General, to advise government accordingly.]

    It’s also addressed elsewhere. Treasury already models the employment consequences of the BER, and that this data doesnt do anything to complement that existing data because of the uncertainty involved in collecting that data.

    In other words, as you say, “So what?” 😛

  31. Greensborough Growler

    Possum,

    Looks like the ABC beat you again. You can’t answer a generalised smear even if you have got the report.

  32. autocrat

    Forgot to add that the accompanying headline is

    Govt failed to monitor schools stimulus program

    Very shoddy stuff.

  33. autocrat

    Well here’s one: http://www.abc.net.au/news/stories/2010/05/05/2890634.htm?section=justin

    The auditor-general has found problems with the arrangements the Government made to monitor the impact of its Building the Education Revolution schools stimulus program.

    It found that a lack of valid data means it has not been possible to properly judge the number of jobs created or the amount of money injected into local communities.

    So what?

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