The project audit is the process of verification of the extent to which the project implementation complied with the rules and principles of the planned project management.
Definition of the audit
The project audit is the process of verification of the extent to which the project implementation complied with the rules and principles of the planned project management. GM&CONSULTING will identify and determine any issues, concerns, challenges and opportunities that had an effect on the project’s financial/economic results, their reasons, and recommendations, by performing a systematic, often iterative activity, by examining and analyzing the financial aspects of the project at the end of each implementation phase and at the last phase after its delivery and commissioning.
Benefits of the audit
GM&CONSULTING considers this activity as extremely beneficial:
- The project management and the main subcontractors and suppliers, will update, improve their planning and performance for the next implementation phases and future projects.
- GM&CONSULTING will also learn how to better judge sources of data, evaluations made, and better estimate financial effects due to unforeseen developments and unexpected events.
Audit Content
GM&CONSULTING audit will cover at least the following aspects: (for each of the project phases)
- Which objectives defined for the project had been achieved, and the reasons for default.
- Methods used to collect the used data.
- Methods to analyze the collected data. These methods can be quantitative, such as statistical measurements, or qualitative, such as measuring feelings or impressions.
- What were the used methods to quantify subjective data.
- Sensitivity weights factors used for the Business planning versus reality (example: How do changes in the price of raw materials affect the project profit).
- GM&CONSULTING considers this phase as the last one of The Financial Management Life cycle of a project. Its importance is for the potential benefits it can bring for eventual final negotiations between the parties and for future projects.
Audit procedure
GM&CONSULTING will use the following procedure:
- Definition of the objectives that have not been achieved.
- Definition of the problem that caused the default.
- The Reason/Cause: The caused financial/economic effect.
In most of the cases GM&CONSULTING would provide an opportunity to comment by the involved organizations on the findings of this report.
Examples of common reasons that affected the financial project objectives:
- Outdated technical/software Policies and Procedures.
- Incomplete Risk Assessment.
- Insufficient Recovery Planning and Business Continuity Plan.
- Inadequate Review or Evidence of Control Procedures.
- Other.
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