Project auditing
- 2. “The project audit is a thorough examination of the management of a project, its methodology and procedures, its records, its properties, its budgets and expenditures, and its degree of completion” • It may deal with the project as a whole, or only with a part of the project.
- 3. 1. Current status of the project. Does the work actually completed match the planned level of completion? 2. Future status. Are significant schedule changes likely? If so, indicate the nature of the changes. 3. Status of crucial tasks. What progress has been made on tasks that could decide the success or failure of the project?
- 4. 4. Risk assessment. What is the potential for project failure or monetary loss? 5. Information related to other projects. What lessons learned from the project being audited can be applied to other projects being undertaken by the organization? 6. Limitations of the audit. What assumptions or limitations affect the data in the audit?
- 5. The main purpose of an audit is to help achieve the goals of the project
- 6. All aspects of the project are studied The strengths and weaknesses are identified Recommendations are prepared to help this, and future, projects
- 7. Identify problems earlier Clarify performance Improve performance Locate technological advances Evaluate quality Reduce costs Improve risk identification Many more…
- 8. 1. General Audit 2. Detailed Audit 3. Technical Audit
- 9. The general audit is normally most constrained by time and resources and is usually a brief review of the project, touching lightly on the six concerns noted earlier.
- 10. A typical detailed audit is conducted when a follow-up to the general audit is required. This tends to occur when the general audit has disclosed an unacceptable level of risk or malperformance in some part(s) of the project.
- 11. The detailed audit cannot investigate problems at a satisfactory technical level because the auditor does not possess the technical knowledge needed. In such cases, a technical audit is required. Technical audits are normally carried out by a qualified technician under the direct guidance of the project auditor
- 12. All significant projects should be audited Larger projects may be audited several times An audit may also be conducted after the project is over (post-project audits)
- 13. 1. It should facilitate the comparison of actual versus predicted results 2. Significant deviations should be highlighted 3. Reasons for significant deviations should be given 4. Plans for resolving negative deviations should be discussed
- 14. The following items cover the minimum information that should be contained in the audit report. 1. Introduction 2. Current status(Cost, Schedule, progress, Quality) 3. Future project status 4. Critical management issues 5. Risk analysis 6. limitations, and assumptions (p 546)
- 15. Be honest and ethical Be independent Tell the whole truth Seek help for technical issues
- 16. 1. Project audit initiation 2. Project baseline definition 3. Establishing an audit database 4. Preliminary analysis of the project 5. Audit report preparation 6. Project audit termination
- 17. This step involves: • Starting the audit process, • Defining the purpose and scope of the audit, • And gathering sufficient information to determine the proper audit methodology.
- 18. This phase of the cycle normally consists of: • Identifying the performance areas to be evaluated, • determining standards for each area through benchmarking or some other process • ascertaining management performance expectations for each area, • and developing a program to measure and assemble the requisite information.
- 19. Once the baseline standards are established, execution of the audit begins. The next step is to create a database for use by the audit team. Depending on the purpose and scope of the audit, the database might include information needed for assessment of project organization, management and control, past and current project status, schedule performance, cost performance, and output quality, as well as plans for the future of the project
- 20. After standards are set and data collected, judgments are made. the auditor must analyze the data and then present the analysis to managers in ways that communicate the real meaning of the audit’s findings. It is the auditor’s duty to brief the PM on all findings and judgments before releasing the audit report. The purpose of the audit is to improve the project being audited as well as to improve the entire process of managing projects
- 21. This part of the audit life cycle includes the preparation of the audit report, organized by whatever format has been selected for use. A set of recommendations, together with a plan for implementing them, is also a part of the audit report
- 22. • When the final report and recommendations are released, there will be a review of the audit process. • This is done in order to improve the methods for conducting the audit. • When the review is finished, the audit is truly complete and the audit team should be formally disbanded.
- 23. Many aspects are easy to measure Performance against budget and schedule are usually straightforward Measurement on projects that include a profit component is more difficult