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The Sydney Water Customer Information and Billing System

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Ebony Back

on 21 August 2013

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Transcript of The Sydney Water Customer Information and Billing System

The Sydney Water Customer Information and Billing System

Presented By: Rida Ahmed, Ebony Back, Jacob Buswell, Isabelle Carpenter, Andrew Donni, Jordon Gommer & Cailin Molinari
The Case:
Sydney Water Corporation was a statutory State corporation wholly owned by the New South Wales government.
The largest water provider in Australia servicing for 4 million people.
Use of tax-payers money.

Case encompasses all types of accountability; hierarchical, legal, professional and political.
A need to determine why the project failed, and what/who's role contributed throughout the process.

Why is accountability so important?
Did the agency reveal the facts of its performance?
Consequences for the sector:
1. Government slowed approvals for agencies and departments projects.
2. Creation of a new set of guidelines.

- Intervention from elected official (Hon. Frank Sartor) to remove the Managing Director of Sydney Water.
- Sydney Water was downsized, 1000 jobs cut.
- Many officials lost positions from both Sydney Water and PwC.
- Legally, case was settled out of court in May 2008.

Both agencies faced consequences of having to pay settlements claims, government backlash, close monitoring, and staff and organization cuts for their performances.

HOWEVER since the events Sydney Water has gone over budget and delivery date 3 times. One delayed by 1 1/2 years and 34 million.

Were these consequences enough? What would be fair and effective consequences for those responsible?

The NSW Government did not respond to problems occurring within Sydney Water until the ‘aftermath’
--> Failure of political mechanism of accountability as government was unable to ensure its department was behaving and conducting itself in completion of projects appropriately.
Management did not always report important issues to Sydney Water’s Board of Directors in a clear, complete and timely manner.
The Auditor General’s report noted delays and increased costs in 2001 and 2002, as did the 2002 Statutory Audit Report of Sydney Water.
The Managing Director then told the Auditor General (who reported his statement to the NSW Parliament) that the project was on track and that the Audit Office’s concerns were misguided. This represents a clear failure on behalf of the external investigatory bodies and Sydney Water in their execution of ensuring transparency.
Official bodies such as audit offices were unable to fulfill their responsibility of making sure that government departments are being held accountable and conducting their projects in a transparent manner, as they took no further action after compiling their report. Furthermore, Sydney Water did not correctly report facts and misled institutions of accountability, including the legislature.
Minutes of meetings were not properly noted or recorded.

- outsourcing major projects transfers all risks of management to the contractor rather than themselves, and hence suggests that,

- there is no need for attempting to control the work of the contractor. Risk management was not effective at the corporate, supervisory level on part of Sydney Water.

In order to maintain accountability there needs to be a relationship of social interaction and exchange involving the complementary rights on the part of the Principle and obligations on the part of the Agent.

The Sydney Water case study exemplified an inadequate maintenance of delegated of power in that responsibilities were;
•Unclearly define/poorly communicated
•Reporting requirements were not followed up/enforced
•Audit Committee recommendations were implemented after the allotted deadline
•Contractual obligations were not properly understood until after the project had commenced

Auditor General’s recommendation; “the government should consider amending the Annual Reporting legislation to require agencies to expand their reporting on large project, explaining significant delays and whether project benefits will be achieved”

The inability of both Agent and Principle to adhere to what their responsibilities required of them lay at the heart of the communication breakdown which consequently affected all other areas of transparency, controllability, responsiveness and liability.

Did they have rules to follow, did they make rules?
In order to improve service and increase efficiencies Sydney Water decided to implement an integrated customer information and billing system, after 2 years of applicants and tendering PriceWaterhouseCoopers (PwC) was awarded the contract.

However due to many issues which we will discuss, the product
was never completed, costing $61m by the time it
was cancelled. We will discuss why, and relate
back to theories and the topic of
The culture of Sydney Water seems to suggest a believe that:
Conflict between the two Sydney Water and PwC (Principal and the Agent respectively) also lead to a growing breakdown in communication whereby less control was able to be exercised on behalf of the principal. Sydney Water also did not effectively follow up and address the recommendations from third party actors nor did it accurately disclose the status of CIBS in its 2002 Annual Report.
Other factors such as a lack of experience on the Sydney Water project team and a lack of high – level representation from legal and corporate finance contribute to the onus of responsibility falling on Sydney Water, whereas the agent, PwC, attempted to do what was asked for them.
Did Sydney Water meet the expectations of accountability?
Internal accountability relies on both the knowledge of experts and control being effectively exercised from outside the organization.
- not only was the PwC team found to be "inexperienced" but the project manager was found to be working at too low a level. both level within the internal accountability system were met with failings within the duration of the project.

Did the organization meet political demands, the "driving force" of all accountability systems?
To whom should the board member be accountable to? some suggestions by Day and Klein;
1. to the general public?
2. to the authority whom appointed them?
3. to their own conscience?
Could the unclear accountability of the board members have been a factor in the breakdown of communication and control mechanisms.

The Sydney Water Board is considered ultimately responsible for the failed project.
The fact that the project lacked accountability and transparency demonstrated the need for both of these, whilst demonstrating how important they both are.
Acted as a watershed moment for Political Accountability, as the project squandered millions of tax payer Dollars.
Full transcript