The Value of the Project Audit

April 8, 2013 | Author: PM Hut | Filed under: Performance Reporting, Project Management Best Practices

The Value of the Project Audit
By Mark Norman

The function of a project audit is to determine the current status of a project. Audits typically occur during the life of a project, the outcome of the audit can be used to influence project decision making. The aim of the project audit is to ensure that the project delivers the desired outcomes by producing the correct products to the agreed quality, cost and time constraints. The audit should cover the totality of the project including the things that should have been done but are not yet completed. The audit should compare the current state with the planned state at the point of measurement. Any potential deviations should be then reviewed and appropriate action planned.

Ideally the group performing the audit should be external to the project. This independent view is very important and the auditor should be emotionally detached from the project. This allows the auditor to review the project and the presented information without bias.

The role of the auditor is difficult; obtaining information from potentially besieged project team members is not easy. A high degree of emotional intelligence is required to build the required relationships to elicit the required information. Audit team members should:

  • Have both specialist and generalist skills

  • Be accepted at all levels of the organization

  • Possess the required technical competence to interpret the project

  • Be personable, articulate and analytical

  • Have well developed communication skills

  • Be independent

  • Naturally inquisitive

  • Committed to performing effective audits to support the business

The audit should not be a long drawn out exercise. To be of value the audit should quickly obtain the required information, interpret the information and present recommendations quickly. If a project is failing any delay to producing corrective action presents further risk to the project and the delivery organization.

Trigger events that result in an audit being commissioned will vary from project to project. They could be pre-planned to occur at agreed intervals or be commissioned if a project falls outside agreed tolerances. Additionally, it is recommended that a culture be created that allows the project manager or sponsor to commission an audit if they feel one is required. Other stakeholders such as the client may be able to request an audit.

An audit should not only report on the current status but should also, based on the available evidence, may some prediction of future performance.

The audit should be formal, evidence based and free from subjective judgement.

The audit should:

  • Identify the criteria by which the audit will be measured
  • Have access to all the required documents and people

  • Form an interpretation of the project and recommend a course of action.

  • Produce its report within agreed timescales

  • Present and review the report with the relevant managers

Chilstrom in his paper “Project Management Audits” (Chilstrom, 1983) suggests the following approach:

  • Phase 1 – Initiation and planning

    - Agree the purpose, constraints and terms of reference

  • Phase 2 – Establish the project baseline

    - What was expected at this point according to the plan

  • Phase 3 – Investigation

    - Gather the facts

  • Phase 4 – Analysis

    - Draw conclusions from the data

    - Test the conclusions

  • Phase 5 – Report and present conclusions

    - Present to the project steering group

  • Phase 6 – Termination

If instigated at the appropriate time and if done correctly then project audits can be of great value. Please comment and let me know your experiences with project audits.

References

Chilstrom, K.O. (1983) “Project Management audits” in Cleland and King, pp 465-481
Cleland, D.I. and King, W.R. (eds) “Project Management Handbook”, New York, Van Nostrand Reinhold

Mark Norman is a leader, project manager, part time archaeologist and mountain climber. You can read more from Mark on his blog.

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1 person has left a comment

It seems a great approach. I really liked it and it was almost the same as what I have experienced during my service in projects.

I would like to add something. Actually it’s not an addition but rather it’s almost a more focus. After getting a conclusion by the audit team, it is highly recommended to conduct a focus group meeting with key stakeholders to discuss all the facts and recommendations. It rally works. From my experience, sometimes, the stakeholders shedding more light on certain facts. Other times, they give good justifications leading to revisit the final report and change some recommendations.

Issam Yousif wrote on April 12, 2013 - 12:57 am | Visit Link

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