Major Projects Monitoring

Last updated: 2 December 2013

Major Project Monitoring is one of three functions carried out by the Major Project Assurance group.

Update 2 December 2013: 

Since 2001 the Major Projects Assurance group has been located in the State Services Commission. On 2 December 2013 the group transferred to the Treasury, as part of the Portfolio Performance Management group. In the New Year this guidance will be repositioned on the Treasury website

Project Monitoring for Large or High-Risk Projects or Programmes

In 2001, Cabinet required that the Treasury and the State Services Commission (SSC) monitor major IT projects by Departments to assure Ministers that these projects will succeed.  In 2010, the monitoring role was extended to all major projects (IT and other) that meet the defined criteria outlined in Cabinet Circular CO(10)2.

Cabinet mandates, through this circular and the Guidance for Monitoring Major Projects, that a programme/project shall be monitored when it is defined as a new initiative, an ongoing development or acquisition project, or other type of project which meets any one or more of the following conditions:

  • is assessed as High Risk, using the Gateway Risk Profile Assessment (RPA) tool - this is the primary means of identifying projects that require monitoring
  • is not an existing operational system and has projected total life-cycle costs of $25 million or more (GST inclusive)
  • if not delivered in line with the projected functionality requirements, cost and timelines, would expose the department to significant risk of impaired operational capability or expose the Government to significant fiscal or ownership risk
  • will impact significantly on more than one department or agency
  • has been nominated for monitoring by the responsible Minister.

Note: Generally only departmental projects are monitored by the central agencies, unless a Minister specifically requests that a Crown Entity/Agent project be monitored. These projects are usually monitored by the department responsible for overall monitoring of the Crown Entity/Agent (e.g. Treasury's Crown Ownership Monitoring Unit (COMU) for the Accident Compensation Corporation  or the Ministry of Health (MoH) for DHB projects.)

To increase the success rate of projects and allow Ministers to make fully informed decisions at an early stage, major business cases require a two stage approval process, as outlined in the Better Business Case Guidelines developed by Treasury:

  • Indicative (Stage 1): on the basis of indicative costs and benefits, seek approval for developing detailed scoping and finalisation of the costs and benefits associated with the project
  • Detailed (Stage 2): final consideration of the business case, based on more fully developed costs and benefits.

The emphasis for the Indicative Business Case should be on the balanced assessment of all relevant options. This provides Ministers and Cabinet with an important opportunity to have their views on alternative options heard before significant investment in the agency's preferred option commences.

The emphasis for a Detailed Business Case should be on the detailed scope, costs, benefits, and risks, of the preferred option, and the delivery strategy (a tender or RFP if appropriate) which will be used to acquire and implement the capability in question. A stage-2 business case is required to include a robust Quantitative Risk Analysis (QRA) of the project's costs.

Central agencies are required to insert a comment in all Cabinet Papers that accompany a business case being submitted for consideration by Ministers.

All such projects should be consistent with the agency's ISSP. 

Back to Major Projects Assurance page.

Independent Quality Assurance of High Risk  Monitored Projects (IQA)

Agencies are required to commission separate Independent Quality Assurance (IQA) reviews of all monitored projects.

Assurance of quality is an ongoing project management task and regular quality reporting enables early identification of project issues.  This can take the form of

regular project health checks, probity assurance of the procurement process or an in-depth review of the project etc.  IQA reviews can increase the likelihood of projects meeting their business objectives and ensure best practice is being followed.

Agencies are required to consult with SSC about IQA:

  • During the assignment scoping stage, to agree the scope and number of IQAs required for the project. The level of IQA required will vary between projects and agencies but must always be agreed with SSC.
  • The terms of reference for each IQA assignment must also be agreed with SSC before the assignment commences.
  • SSC can assist with the selection of IQA reviewers for monitored projects
  • Agencies must submit copies of IQA reports to the SSC, together with draft Cabinet submissions seeking funding and approval to proceed before submitting their case to Cabinet. Copies of IQA reports are required to be provided directly to the agency's chief executive.

Back to Major Projects Assurance page.