Project Audit Case Study

1) Overview – This chapter describes the process of project auditing, a formal inquiry into any aspect of the project chosen by management.

2) Purposes of Evaluation – Goals of the System – One major element typically evaluated in an audit is the project’s success. Success often has four dimensions with regards to a project:

• Efficiency – a measure of the project’s success at meeting cost and schedule goals.

• Customer impact/satisfaction – a measure of how well the project met the customer’s needs.

• Business/direct success – a measure of the commercial success of the project. For projects that create a product, this might be a measure of its market share. For internal projects, this could be measures of process improvements or quality.

Project audits are also different from management audits, which are typically limited to ensuring that the management systems are in place and operating.

a) Depth of the Audit – Time and money are the two most important considerations in setting the depth of the audit process. Another consideration is how much disruption management is willing to inflict on the project team to achieve audit goals. Three distinct audit levels are often used: general, detailed and technical. The general audit attempts to touch at least lightly on all the areas of the project. The detailed audit zeroes in on a particular area, and the technical audit uses specialized personnel to investigate the technical aspects.

b) Timing of the Audit – The first audit is done early to catch problems before they can grow beyond correction. Usually management issues are of the most interest for audits conducted late in the project life cycle. Postproject audits may be necessary to meet contractual commitments to perform a final accounting of project

A large team would typically involve functional experts from several areas within the organization. The members need to be selected for their technical ability as well as their ability to be objective.

b) Access to Records – The a/e team must have free access to any records they deem necessary to conduct the audit.

c) Access to Project Personnel and Others – The a/e team must have unfettered access to all members of the project team. The only exception is contacts with the customer which must be cleared by senior management.

7) Measurement – The auditor will end up measuring different aspects of project performance. Some, like cost, are relatively easy to determine. Some, like customer satisfaction, or the project’s contribution to revenue may be very difficult. Ideally, the rules for the measurement of cost/revenue allocations, or other difficult parameters, are established when the project is initiated.

a) A Note to the Auditor/Evaluator – The a/e needs, through a combination of authority, credibility and personality, to establish enough trust with the project team to do his or her job. When that trust doesn’t exist, the auditor will discover the myriad ways people have of pretending cooperation while practicing