To follow the objectives and successfully complete a particular project, it is essential to study the project feasibility process by the method of project audit. You can plan future projects by learning new dimensions of the existing project.
Conducting an audit is imperative to assess the progress of a project and regular audit sessions ensure that a project’s management is in-sync with the established project objectives. Ideally, an audit process should have some level of flexibility. The reason - various teams and organizational resources are involved in the execution of a project and to measure each of them using a standard assessment tool may not provide the most accurate results. However, the focus should be on not deviating from the purpose of a project management auditing process - it is an honest assessment of team and individual performances and their ability to execute assignments to achieve project targets, both short-term and long-term.
A basic checklist that is often used for auditing project management to assess the Project Characteristics includes verifying the presence of:
- Strategic project management tools for organizing and monitoring every facet of a project
- Clearly-defined phases and sub-processes through a project’s lifecycle
- Delegation of responsibilities to ensure that each of the project phase is in agreement with the critical project objectives
Conducting periodic audits ensures that project-related risks are avoided.
Usual risks that hinder project performance are:
- Practices that defy cost-management and make the project economically unfeasible
- Non-adherence with the project plan or organizational practices
- Inability to keep-up with time-specific deadlines
- Over or under-evaluation of availability of resources
- Presence of team personnel who are not qualified for the project
Every organization has various project-related processes and each of them needs to be audited. Following are some of processes and auditing-related queries that are designed to judge their overall performance:
Auditing of Cost-related Processes (Including Financial Planning)
· Have the project costs been managed to ensure that they don’t exceed the defined budgetary allocation?
- Is the proposed project budget compatible with the organization’s limitations?
- Does the project budget has a scope for bearing contingency or risk-related expenses?
- Is there a budgetary review and does it highlight the reasons for budget discrepancies?
- Has the cost estimation process been clearly-defined and documented?
- Was cost estimation conducted in accordance with accounting regulations?
- What methods were used for estimating expenditures related to project execution?
Auditing of Strategic Management-based Processes (Including Management of Organizational Interdependencies)
- Has the authority and the level of accountability been properly divided between various organizational entities like stakeholders, team members and customers?
- Does the management use strategic monitoring/evaluation tools like taking remedial actions, periodic reviews, establishing responsibility delegation and tracking/verification of adherence to guidelines?
- Does the project manager have acceptable levels of authority and clearly-defined accountability instructions?
- Is there a system of analyzing past projects and using this information for improving future task-related performances?
- Is there a system to manage project interaction teams like those involved in risk management, project evaluation and team communication?
- Does the project plan address issues such as reviews, progress reports and does it include the evaluation of various project interfaces?
Core constituents of project management that are analyzed during an audit:
- Resource planning and control in terms of:
Allocation of resources, criteria for distribution, analysis of consumption patterns and measures to control resource abuse
- Allocation of staff and establishment of recruiting policies
- Division of responsibilities regarding team development and training needs
- Policies regarding Preparing and Collecting information
- Principles used for Classifying and Distributing information
- Methods used for Filing, Updating and Retrieving information
The purpose of the audit is not just analyzing various project management resources and functionalities but also to help the organization understand the performance of each of them. For this purpose, most audit processes use a grading system to rank each audited project constituent:
- Critically Deficient — suggests a serious inability to match project guidelines
- Weak — unable to entirely comply with project objectives
- Satisfactory — basic project management principles are followed but the overall performance has room for improvement
- Good — the compatibility with the project goals and effectiveness of management tools, both are appreciable and committed to project goals
- Very Good — the process defines ideal project performance and adheres to planning/monitoring expectations and performs as per project expectations
This is how audit processes become effective — based upon such detailed evaluation, better monitoring and planning measures can be introduced, wherever necessary to ensure that every project-related process is optimized to meet the organization’s objectives.
Also read Project Checklist Article for revision necessities before getting audited.
Picture Source: Tomica Bonner Flikr(via Fotolia)