Science North struggling with $10M in cost overruns, poor planning, auditor says

Poor planning and project management led to a $10 million increase in Science North’s Go Deeper project, Ontario’s acting auditor general says.

Nick Stavropoulos said Wednesday in his report that even with reduced scope, the now-$15 million project is still coming in far over-budget. Initially expected to open this year, Go Deeper won’t open until sometime in 2024.

“We found that the cost overrun and delay were caused by poor planning and ineffective project management,” Stavropoulos wrote.

“For example, no reliable third-party estimate was completed during the planning phase to assess the reasonableness of the cost projections. A more reliable cost estimate would have been produced if a consultant with an engineering and construction background had been engaged during the planning phase.”

While pointing the finger at the planning process, he said the budget increases were largely due to rising excavation and construction costs.

“The project had also run into significant delays,” Stavropoulos wrote.

“In 2019 Science North proceeded with the project, setting an initial completion date of February 2023. At the time of our audit, the project was expected to be completed by winter 2024. The delay was mostly due to the COVID-19 pandemic, the City of Greater Sudbury identifying additional requirements for site remediation, which delayed municipal permit approvals, and a lack of available funding.”

Currently, Science North has paused "key elements of the project," the report said, because of a lack of funds and are again reviewing it to reduce the scope and cut costs further.

Poor planning and project management led to a $10 million increase in Science North’s Go Deeper project, Ontario’s acting auditor general says. (File)

In addition, the centre’s plan to expand to Thunder Bay and Kenora is estimated to cost more than $90 million, but a cost-benefit analysis hasn’t been completed.

“Science North sought board approval for this expansion without the benefit of a business case that would include a cost/benefit analysis and assessment of alternative options,” the report said.

“At the time of our audit, Science North had received only conditional board support for the expansion and had not yet sought funding for the expansion from any level of government or from the private sector.”

Science North estimates that operating budgets for the two new science centres would be $5.5 million and asked the province to cover $4 million.

“Centre management projected that self-generated revenue would cover the remaining $1.5 million,” the report said.

“The ministry had not assessed the feasibility and financial sustainability of the expansion to Thunder Bay and Kenora.”

IMAX ATTENDANCE PLUNGED

Attendance before the COVID-19 pandemic was down by eight per cent, driven largely by plunging attendance at the IMAX theatre, which had declined by 26 per cent from 2015-2019.

But it’s not all bad news: attendance has recovered since the pandemic ended.

“In 2022/23, attendance has increased by three per cent from pre-pandemic levels,” the report said.

“Science North projected attendance to remain at this level in the upcoming three fiscal years.”

The average age of exhibits both at Science North and Dynamic Earth is 11 years and none have changed significantly since 2017.

The report also recommended the centre change its accounting practices so costs are allocated to specific lines of business.

“Without allocating these costs, it is difficult to assess which lines of business are profitable and which need to manage costs more effectively,” the report said.

In its response to the AG report, Science North said it agrees with the recommendations.

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“In leveraging new technology, Science North will improve its current process for allocating appropriate costs to lines of business where able and will continue to seek and analyze new opportunities for self-generated revenue,” the centre said in its response.

“The organization will take additional measures to ensure visitor feedback informs all major exhibits and their renewals, while further leveraging memberships with Canadian and international science centre associations to streamline research and best practices.”

Read the full report, and Science North’s responses, here.