VAGO Report - Compliance with Building Permits

The Victorian Auditor-Generals Office (VAGO) has tabled their report into the Compliance with Building Permits conducted in the second half of 2011.

Each year, the Victorian Auditor-General presents to Parliament an annual plan, which describes the proposed work program for the coming year.

The Annual plan is Section 7A of the Audit Act 1994 (Vic) requires the Auditor-General to develop an annual plan and present it to parliament, following consultation with Parliament's Public Accounts and Estimates Committee.

Victoria’s building industry is a significant component of the state’s economy, employing almost 7 per cent of the work force and generating over $24 billion in domestic and commercial building work in 2010–11. These works are governed by the Building Act 1993 (the Act), the Building Regulations 2006 (the regulations), and the Building Code of Australia (BCA) that aim to assure buildings are safe and meet minimum standards.1

The detailed report tabled December 7, 2011 detailed significant concerns about the administration of the building permit system in Victoria.

The report details 8 recommendations for the Building Commission, Councils and Stakeholders as follows;

  1. The Building Commission should:
    1. expedite development of its monitoring and evaluation framework and clarify the targets, standards and arrangements for assessing the building permit system’s effectiveness, and the impact of related monitoring and enforcement efforts
    2. conduct a fundamental review of the building permit system’s effectiveness to identify and resolve the longstanding and other system-wide performance issues
    3. develop guidance for building surveyors on the process for determining and documenting the value of building works and thus for accurately estimating the levy payable to the Building Commission
    4. implement controls to prevent building surveyors from using levies collected as their working capital
    5. systematically audit surveyors’ estimates of the value of building works to gain assurance they are soundly based and that it is mitigating financial losses arising from any incorrect valuations
    6. develop and implement a strategy, in consultation with the local government sector, to enable more effective coordination with councils to monitor the performance of the building permit system and of building surveyors
    7. clarify councils’ responsibilities for monitoring and enforcing the Building Act 1993 relating to private building surveyors in consultation with the Department of Planning and Community Development and relevant stakeholders.
  2. Councils should review and, where relevant, strengthen their monitoring and enforcement strategies to assure:
    1. they are risk based, targeted and sufficiently informed by reliable data on the performance of the local building permit system and of the surveyors operating within it
    2. that building works and associated permits comply with the Building Act 1993, the Building Regulations 2006 and the Building Code of Australia within their municipal districts.
  3. The Building Commission, in consultation with stakeholders should:
    1. develop standard templates and procedures to require building surveyors to adequately document their assessment approach and basis of their decisions
    2. require building surveyors to demonstrate, using these templates and procedures, their consideration and acquittal of mandatory safety and technical requirements.
  4. The Building Commission should strengthen its performance audit 50 program to assure:
    1. it meets its legislative remit to provide assurance that the work carried out by a registered practitioner has been competently carried out, does not pose any risk of injury or damage to any person, and to assure that the Building Act 1993 and the Building Regulations 2006 have been complied with
    2. it is informed by rigorous analysis of reliable risk-based data on the performance of building surveyors
    3. it includes a clear rationale and annual targets for ongoing comprehensive technical audits of both municipal and private building surveyors performed by qualified practitioners
    4. it offers reliable information on whether building surveyors operating in both the domestic and non-domestic sectors effectively discharge their obligations to enforce compliance with the Building Act 1993 and the Building Regulations 2006
    5. it regularly undertakes and clearly documents reviews of both the program’s and individual audit’s effectiveness against defined quality standards.
  5. The Building Commission should comprehensively assess, clearly document, and target via audit all identified major risks related to surveyors’ administration of the building permit system.
  6. The Building Commission should strengthen its complaints handling and investigation processes to assure:
    1. complaints are systematically prioritised according to the risk of non-compliance with safety and technical building standards, and that this is clearly documented
    2. they are governed by clear standards of effectiveness and efficiency, and that adherence to these requirements is regularly reviewed and monitored by senior management
    3. investigators receive sufficient training to enable them to form appropriate judgments about technical building matters
    4. clear quality assurance standards and effective controls are established for technical reports sourced from the Building Commission’s external panel to assure they have been competently prepared.
  7. The Building Practitioners Board should:
    1. develop criteria and guidelines for evaluating the competency of applicants to be registered as building surveyors and clearly document the basis of all of its related decisions
    2. systematically verify a sample of the character declarations supplied by applicants for registration to gain reasonable assurance they are reliable.
  8. The Department of Planning and Community Development, in consultation with stakeholders, should:
    1. seek approval from the Minister for Planning to introduce a system of compulsory continuing professional development for building surveyors
    2. seek approval from the Minister for Planning to prepare an amendment to the Building Act 1993 to make registration renewal contingent on building surveyors satisfying minimum compulsory continuing professional development requirements.

Obviously the conclusions, findings and recommendations are a lot to consider by the Building Commission, Councils, Building Practitioners Board and other Stakeholders, given the report is about 94 pages long.

According to the response by the Building Commission there has already been some action taken toward implementing some of the recommendations however they point out that some of the recommendations will require legislative change. The commission also state that "readers of the report would be unjustified to conclude that new building works are unsafe given the full range of checks and balances in the system." 2

From this point, there will be a range of building industry stakeholders such as the Housing Industry Association, Master Builders, Australian Institute of Building Surveyors, Fire Protection Association Australia, Australian Institute of Architects and Engineers Australia will also be reviewing the recommendations of the Victorian Auditor-Generals report.

I expect as a result of this report, there will be extensive changes to the way the Building Commission administers the building process in Victoria. I look forward to how these changes will affect the way safety measures are designed, installed, commissioned and maintained.


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