How to conduct a successful year-end project audit
From the The Money Files Blog
by Elizabeth Harrin
A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts.
Written by Elizabeth Harrin from RebelsGuideToPM.com.
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Are you thinking about year-end project audits? Perhaps your PMO is thinking about how to learn from the past year. Perhaps you want to set a good foundation for projects next year. Perhaps you just had a rubbish past few months and want a second opinion to see if there was anything you could have done differently to avoid the outcomes you got.
Whatever your reason, many project leaders’ thoughts will be turning to audits at this time of year, so let’s talk about how to make the most of this exercise – it’s not as awful as you might be thinking!
Planning the audit
First up, make sure the audit is planned in. Schedule it in advance to ensure key team members are available.
Look out the documentation that is required, which is normally things like financial reports, scope changes, and risk logs. You’ll also want to make sure that the business case, project plan, and schedule are available, as well as any change requests that changed those, so the auditor can compare the original planned baselines to the current baselines.
Key areas to audit
So what is your audit going to look at? Whether you have been asked to audit someone else’s project, or you want projects in your PMO to be audited, here are some things you’ll probably want to put on your checklist.
- Budget vs. actuals: Compare planned spend to actual spend and do the same for resource utilisation if you have the data.
- Scope management: Look at how many change requests the project had and whether that resulted in managed change or scope creep. Personally, I don’t think it is important to assess whether the project stayed within its original scope – what you are looking for is whether changes were assessed and approved rather than being done in an ad hoc manner.
- Risk management: You’ll want to go through the risk log to see how well risks were managed, mitigated, or exploited.
- Quality of deliverables: If anything has been delivered so far, check to see that the quality is comparable to the targets set. In other words, are there post-go live bugs still to sort out, and does the product meet quality expectations?
Identify lessons learned
The main purpose of an audit is to review what worked, what didn’t and what needs to change (or be continued). So you can think of the output of the audit as a sort of lessons learned report. If you already have scheduled lessons learned activities, you can feed those in to the audit report. If not, it never hurts to have a lessons learned conversation with the team.
Set the stage for next year
If your project is running into next year, discuss how the results of the audit can be used to improve processes, define new standards or ways of working, and inform the next year’s project strategy. There might be some easy things you can do to change up how things work to make them more effective.
Whether the outcome is a lot of things to change or the reassurance that you are doing everything right, it’s a good time of year to be reflecting on project management practice. Take stock of where you are and how far the project has come, and if an audit is offered, say yes! It really is a good learning experience.
Posted on: December 03, 2024 08:00 AM |
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Comments (11)
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Kwiyuh Michael Wepngong
Community Champion
Financial Management Specialist | US Peace Corps
Yaounde, Centre, Cameroon
My Accountant mind saw "Budget vs. actuals" and just confirmed it!
Thanks Elizabeth
Kwiyuh Michael Wepngong
Community Champion
Financial Management Specialist | US Peace Corps
Yaounde, Centre, Cameroon
My Accountant mind saw "Budget vs. actuals" and just confirmed it!
Thanks Elizabeth
Perfect. Thank you for sharing your insights.
Mona Jennings
Project Manager| Public Service Commission
Ottawa, Ontario, Canada
Thank you for this article. It is a timely read since Planning of audits is going on in the next few weeks.
Nigel Tan
Project Manager & Lead Consultant| Malaysian SOCIAL Project
Kuala Lumpur, Malaysia
Wonderful insights! Appreciate you sharing!
Yasin Ali Shah
PMP®, PMI-RMP® Certified Project Manager| SEPCO Electric Power Construction Corporation
Ras al khair, Eastern, Saudi Arabia
Budget vs. actuals are most important to audit
Assess your current position and the progress the project has made, and always take advantage of an offered audit
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