PROJECT AUDIT

Project evaluation needs to be conducted

As a whole when it is completed

At various points during project life cycle

Project audit is the tool for project evaluation

The result is a set of recommendations that can
help both ongoing and future projects to

Identify problems earlier

Clarify performance time and cost relationship
Reduce cost
Accelerate the achievement of results
Identify and correct mistakes
Provide information to client
The project audit is a thorough examination of the
management of project, its methodology and
procedures, its records, its budgets and
expenditures and degree of completion

The outcome should indicate

Current status of project

Future status
Risk assessment
Information pertinent to other projects
Limitations of audit
 Depth of audit

Time and money limit the depth of audit

Three levels of audit may be used

General audit
Detailed audit
Technical audit
 Audit report

Introduction
Description of project
Framework of project
Project objectives
Current status
Cost
Schedule
Progress
Quality
Future project status
Critical management issues
Risk analysis
Limitations and assumptions
 Responsibilities of project auditor

Assemble a team of experts

Familiarize the team with project requirements
Audit the project
Debrief projects management
Produce a written report
Distribute the report to all concerned
Follow up for recommendations
 Project audit
termination

Audit report
PROJECT AUDIT LIFE CYCLE preparation

Preliminary
analysis of project

Establishing
audit data base

Project Baseline
definition

Project audit
initiation
 Project audit life cycle

Step 1 Project audit initiation

Starting the audit process

Defining the purpose and scope
Determine audit methodology
 Project audit life cycle

Step 2 Project baseline definition

Identify performance areas under evaluation

Establish performance standards
Ascertaining management performance
expectations
Developing audit program / schedule
 Project audit life cycle

Step 3 Establishing audit data base

Create data base for use by audit team

Data base includes information on past
and current project status
Schedule performance
Cost performance
Output quality
 Project audit life cycle

Step 4 Preliminary analysis of project

Analysis of data
Judgement on the performance of project
Communication of analysis and judgement to
project manager

The purpose of audit is to improve the project and

not to embarrass the project team
 Project audit life cycle

Step 5 Audit report preparation

Preparing audit reports

Set of recommendations
Plan for implementing
recommendations
 Project audit life cycle

Step 6 Project audit termination

Release of final report and recommendations

Review of audit process
Identifying scope of improvement in audit
process
Audit team is disbanded
 Qualities of audit leader

No direct involvement or direct interest in project

Perceived as impartial and fair by all stakeholders
Willingness to listen
Independence and authority
Broad based experience in the industry
 Audit team

Audit team may comprise of members from

Project itself
Accounting department
Technical experts
Customer
Marketing department
Senior management
Purchase department
Personnel department
Legal department
 Guidelines for conducting project audit

Project audit is not a fault finding mission

There should be no comments about individuals. Keep
to project issues not what happened or by whom
Be sensitive to human emotions and reactions
Accuracy of data should be verifiable
Friendliness and objectivity encourage cooperation and
reduce anxiety
Audit should be completed as quickly as reasonable