Good financial reporting is about much more than showing the latest budget.
It should also explain how a project has changed over time.
Unfortunately, that is often difficult to see in Norfolk County's capital plans.
While reviewing several years of capital budgets, I noticed something that I believe illustrates the problem.
Project 4132701, the Enterprise Resource Management System, appeared in four consecutive capital plans. For three years, the project was estimated at approximately $4.75 million.
Then, in the 2026 capital plan, the estimated cost increased to $10.15 million.
Following the project through the capital plans
The graphic below follows the same project through Norfolk County's capital plans from 2023 to 2026. It shows both the changing project cost and how the major implementation spending continued to move further into the future.
For three consecutive capital plans, the total project remained at $4.75 million.
The latest capital plan increased that estimate to $10.15 millionāan increase of approximately $5.4 million, or about 114 per cent.
At the same time, the largest portion of the project continued moving into later budget years.
The increase may be justified
There may be perfectly reasonable explanations for the increase.
Perhaps the original estimate was preliminary. Perhaps the scope expanded. Additional software, cybersecurity, data migration, consulting services, implementation support or other systems may now be included.
I am not suggesting the project should never proceed.
I am suggesting that taxpayers deserve to understand what changed.
The questions Council should have been shown
Before approving another $10 million, Council and the public should have received a simple explanation answering questions such as:
- What changed between the $4.75 million estimate and the $10.15 million estimate?
- Was the project scope expanded?
- How much has already been spent?
- Which existing software systems are being replaced?
- What measurable operating savings are expected?
- Is $10.15 million expected to be the final cost?
There is another question worth asking.
Council recently approved bringing water and wastewater billing in-house. That project includes new billing software, staffing and implementation work. I previously discussed that decision in my article, We've Seen This Movie Beforeāand It Saved Ratepayers Millions.
Will the new billing system operate independently, or does it require integration with the Enterprise Resource Management System?
If additional systems were added to the ERP project, did they contribute to the increase?
Those are reasonable questions, and taxpayers deserve clear answers.
The bigger issue
The biggest concern is not simply that a project increased in cost.
It is that Council was never presented with this four-year history in one place.
If Council was not shown this comparison when approving the latest capital plan, how could an ordinary taxpayer reasonably be expected to find it?
Taxpayers should not have to search through multiple capital plans, locate the same project number each year and rebuild the history themselves.
That information should already be included in the report presented to Council.
How I would fix it
As mayor, I would require every major capital project to include a project history whenever Council is asked to approve funding.
That history should show:
- the original approved budget;
- the original completion date;
- every approved budget increase;
- every significant scope change;
- money spent to date;
- the current estimated cost;
- the current completion date;
- the current project status;
- and a clear explanation for every major delay or increase.
If a project has remained in the capital plan for years without substantial progress, Council should also receive an explanation before approving additional funding.
Good financial reporting should make changes easier to understandānot harder to discover.
A $10 million technology project may ultimately prove to be the right investment.
But taxpayers deserve to know what changed, why it changed and what value they will receive before the next budget is approved.