Planning and Managing Projects

Project Audits

Richard W. (Rick) Blank

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This is Rick Blank again. In this segment, we will take a look at project audits and how you as the
Project Manager can use them as a positive tool.

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 Project Management Framework

CONCEPT

DISPOSAL DEFINITION
Executing, Monitoring,
Initiating & Planning
Controlling & Closing
Iteration Directing &
Work
Authorization
PMO Finance,
Contracts &

SUPPORT Procurement
DESIGN
Staffing and Stakeholder Delivery
Scope & Stakeholder Monitoring
Startup Value &
Objectives Organization & Control
Value Plan Delivery Closeout

Schedule
Create a Resource Manage to
baseline plan Planning &
Budgeting Baseline Evaluation
baseline plan

Manage: Risk, Configuration, Change, Quality, Conflict, Multi-Projects

OPERATIONS DEVELOPMENT
PRODUCTION

© Staś Tarchalski

Consider a project audit as an adhoc assessment of the project and falls into the project
management framework as part of evaluation.

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 Learning Objectives

Apply an internal project audit as a management tool.

By the end of this segment, we will have reviewed the purpose of an audit and discussed how you,
the project manager, can use it as a useful management tool. When you call for an audit, it is not an
onerous event, but an opportunity to get an independent perspective on the health of the project.

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 Purpose of a Project Audit

A project audit is:

• “an independent methodical examination and review”

In order to …

• clarify performance, cost, and relationships;

• improve project performance;
• identify opportunities for future technological advances;
• evaluate the quality of project management;
• reduce costs;
• speed the achievement of results;
• identify mistakes, remedy them, and avoid them in the future;
• provide information to the client; and
• re-confirm the organization’s commitment to the project.

As project manager, you may want that independent and structured examination, review, and
assessment of the project. It provides an opportunity for you to receive subject matter expert input on
items such as listed here, and it provides an opportunity to receive the organizations recommitment
to the project upon review between you, the project manager, and the organizations executive
management. As an example, in my own career, I called for a project audit immediately upon
inheriting a project already in process, I convened an audit team consisting of a seasoned veteran
from engineering, manufacturing, finance and contracts to review the project baseline, project
progress reviews conducted to date, interview current members of the existing project team, and
provide me an independent assessment of the health of the project. I then use this information to
meet with the project team and establish a revised project plan going forward, under my new
leadership. Used in this way, the audit was not an inquisition to find fall. The unfortunate expectations
may have been when the word audit is used, but an opportunity to re-establish the project plan, build
the project team under my leadership style and reconnect with executive management on the new
commitment for completion.

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 Focus of a Project Audit
Current status of the project
• cost
• schedule
• progress
• quality
Future project status

Status of crucial tasks

Risk assessment

Information of value to other projects

Limitations of an project audit

Time, money, available data

The focus and structure of a project audit, should be based on a triple constraint of scope, schedule,
and cost. The auditors should seek to provide a fact-based assessment and their assessment of
project risk. Having chosen seasoned veterans, this assessment will naturally include their lessons
learned from other projects of similar work and complexity, and equally important is to define the
boundary conditions of the audit. So the auditors stay focused on the information you as project
manager have asked them to provide.

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 Timing of a Project Audit

Earlier is better Early project Later project Post-project

for the project, audits tend to audits focus on project audits
permits focus on management have several
corrective action technical issues. issues. imperatives:

Required for
Contractual Accounts for
post-project
requirement project property
report

Remember, the purpose of the audit is to provide you with independent information to support the
actions you as project manager will take going forward. So if like my example where you inherited a
project already in process, performing the audit earlier is better. So you can take appropriate
corrective actions with plenty of lead time. Audits performed later in the project typically focus on
management issues where they are trying to identify trends or systemic issues to correct before
starting future projects, or an audit performed after project completion maybe useful to capture
results of the post project report, to account for property not already disposed off, or to develop
lessons learned for future projects. Select your auditors purposefully. You are asking them to perform
an independent assessment of the project, so they should be objective, have no hidden agendas, and
be credible subject matter experts with the ability to effectively communicate.

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 Project Audit Lifecycle
Project
audit
initiation

Project Project
audit baseline
termination definition

Establish
Project
project
audit report
audit
preparation
database

Preliminary
analysis of
project

And treat the audit has a mini-project in itself. It has a set of deliverables, a schedule, a repository to
capture and retain the data audited, analysis of that data, generation and presentation of the report,
the deliverable of the audit, and then close out.

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Essential Elements of a Project Audit

Properly constructed team

Free access to project records and

data

Free access to project personnel

Remember, the auditors are doing you a valuable service by providing an independent assessment
of the project. Ensure they have the proper expertise and ability to work together, but they have
access to all necessary project records, data, etc. Equally important, have free access to interview
the key personnel working on the project and help set the stage for project personnel, so they clearly
understand the auditors are not trying to find fault. They are chartered to provide a fact-based
assessment of the project, so that you and the project team can take a fresh look at what it takes to
complete and meet the commitments made to the customer and the organization. It may even be an
opportunity to address barriers the current team has not been able to overcome by themselves and
can provide a sounding board for a fresh look.

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 At Work…

Review a Work with your

Participate in a project audit PjM to conduct
project audit. report from a an audit on
prior project. your project.

Again, here is another opportunity for you to see how things are done in the organization where you
work. Volunteer to participate in a project audit, review an audit report from a prior project to compare
your approach and the characteristics we have discussed here, and maybe even volunteer to work
with your project manager to conduct an audit that can help him or her characterize the current state
of an ongoing project. We look forward to hearing from you about this experience at a future office
hour session.

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