29/11/2021

Project
Management

Learning
Objectives

• Define a project and know the factor why a project is

selected.
• Define project management.
• Enumerate and describe the different project phases.
• Appreciate the qualities of an effective project manager.
• Learn the project metrics and performance indicators.
• Learn the audit considerations in project management
of the client.

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What is Project?

• It is a unique, temporary endeavor,

undertaken to achieve planned objectives,
which could be defined in terms of outputs,
outcomes, or benefits. A project is usually
deemed to be a success if it achieves the
objectives according to their acceptance
criteria, within an agreed timescale and
budget.

What are the

building blocks of
every project?
a. Time - scheduling is a collection of
techniques used to develop and present
schedules that show when work will be
performed.
b. Cost: how are necessary funds acquired
and finances managed?
c. Quality: how will fitness for purpose of
the deliverables and management
processes be assured?

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Project Selection

• Strategic plan
• Vision and mission
• Market analysis
• Prioritizing projects
• Effort-Impact analysis

What is Project
Management?

It is aimed at producing an end product that will effect some change for
the benefit of the organization that instigated the project. It is the initiation,
planning and control of a range of tasks required to deliver this end
product.

Projects that require formal management are those that;

• produce something new or altered, tangible or intangible;
• have a finite timespan: a definite start and end;
• are likely to be complex in terms of work or groups involved;
• require the management of change;
• require the management of risks.

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Project Phases Project life cycles are generally described as

following these five phases:
• Initiation
• Planning
• Executing
• Closing
• Monitoring and controlling

Initiation •

•
This is the first stage of the project.
One of the key tasks performed during this phase is
defining the overall project goal.
• Defining the goals(s) may seem simple and obvious,
but it is not as easy as it sounds.
• With an understanding of the goals and scope of the
project, another key aspect of the initiation phase
involves the selection of the Project Manager (PM).

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Role
Leader Initiator Negotiator Listener
model

Working
Coach Facilitator Employer
member

• The second phase of project management involves the

actions necessary to think and organize the activities
necessary to achieve the goals of the project.

Planning • During this phase, a plan is created that defines more

dearly the precise tasks required to produce the project's
products and services, establishes estimates of resource
needs and related costs, and the amount of time required
to perform the necessary work.
• Another important aspect of this phase is the
arrangement of the tasks during the life cycle so they can
form a project schedule.

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• This phase is when the actual doing takes place.

• The major objective is to keep the project on track after it has been
launched and do what the plan calls for. Leaders work with the

Executing
project team and need to make sure they are meeting the quality
requirements and deadlines within the timeline agreed upon, while
judiciously using the resources allocated to the project.

• The concept and plan are acted on and some of the most important
activities during this phase include:
 Leading and managing the team
 Meeting with the team members
 Communicating with stakeholders

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• During this phase, the final products, services, and other outcomes
are delivered to the client. Ties to other organizations, such as the
host and suppliers, are ended and the project team is disbanded.

Closing
• It is common for a final report to be prepared that summarizes the
project's accomplishment, future actions required, if any, and
ongoing maintenance arrangements. Accounting adjustments may
be made, and unnecessary assets may need to be disposed of as
well.

• Workers are often reassigned at this point so having effective

performance evaluations done during the execution phase will
enable the organization to reassign workers in the most productive
way.

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• It is clearly something that should

happen throughout the entire life cycle

Monitoring and
of the project and not something that
happens "during phase four of a
project."

Controlling • It should happen throughout the entire

lifecycle and internal auditors are
encouraged to get involved not only as
auditors, but also as advisors early on
in the process.

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• Projects require a team of people to come together temporarily to

focus on specific project objectives.

• The project management plan is not just the schedule, although

Keys to Success of
dearly this is an essential item, but is a plan for how the project will
be managed so it indudes:

1. A summary describing the aims of the project and the expected

Project Management
benefits, including any assumptions or constraints.

2. The processes that will be used to monitor and report on the

status, and handle risks, change, quality etc.

3. Documentation of the scope, requirements and budget as well

as a time and dependency-based schedule such as a Gantt
Chart.

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• A performance metric measures the activities and

performance of an organization, program, or
process.

Project Metrics
• Metrics should support stakeholder needs, which
can be external (e.g., customers, shareholders,
and regulators), or internal (e.g., managers and
employees).
• Project management performance metrics may
include safety, time, cost, resources, scope, quality,
and activities.

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Return on Customer
Productivity Gross Profit Earned
Investment Satisfaction
Margin Value
(ROI)

Employee
Cost Schedule Cost
Satisfaction Actual Cost
Variance Variance Performance
Score

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• When reviewing the organizations' project

management processes, internal auditors should

Audit Considerations for •

verify that the organization has in place:
Project management framework and methodology

Project Management
that clearly define how the project should be
conducted, and the required documentation and key
metrics for performance monitoring.
• Project evaluation and approval indicating what the
scope is, deliverable due dates, resources available
for use, and quality parameters.

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Project charter
Budget
Feasibility studies (e.g., Market analysis)
Schedule (e.g., Gantt chart and CPM)
Staff list and organizational chart
Important Contract
Documents List of key suppliers
List of change orders
List of contractors and subcontractors
Recent progress reports
Concept and feasibility analysis

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• Projects are coordinated and aligned with

organizational objectives.
• Projects are completed within budget, the

Key objectives
timeframe agreed upon, and meet the
scope requirements with high quality.
• Staff with the necessary skills are obtained
and retained.

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• Lack of formal expectations regarding project

deliverables, documentation, hiring, communication,
budgeting, and reporting requirements.
• Lack of support from senior management.
• Poor coordination with other projects and
organizational priorities.
• Project does not support strategic plans.
• Excessive timeline, scope, or budget changes cause
the project to fall short of plans project does not
achieve the stated objectives.

Key risks • Human, technological, and financial resources are not

allocated optimally among competing projects.
• Project risks are not identified, assessed, managed, and
results are not communicated.
• The organization hires and/or retains unsuitable project
management personnel.
• Turnover is excessive.
• External contractors and suppliers are not authorized,
perform substandard work, and charge excessively.
• Project success is hindered by outdated, inefficient, and
ineffective management practices.

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• The project's financial resources are

mismanaged.
• Excessively costly sources of funding are
employed.
• Required documentation is not maintained as
required.
• Project managers and team members are
unsuitable for the job,

Key risks
• Changing or unclear customer requirements.
• Missing, conflicting, or inconsistent
specifications.
• Incomplete or poorly defined acceptance
criteria.
• Component defects.
• Language or communications difficulties that
limit productivity.
• Changes in regulatory or user requirements.

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Key actions by phase (Initiation)

• Obtain and review the project's key project objectives, scope, budget, and deliverables milestones
and timeline.
• Obtain and review the quality requirements.
• Examine resource requirements (e.g., human, material, financial, equipment, and facilities).
• Determine through analysis and discussions with team members if the timeline, budget, and scope
are realistic.
• Identify the stakeholders of the project and verify their interests are being captured and addressed.
• Review the project charter and determine if it provides sufficient clarity about scope, objectives,
stakeholders, roles, responsibilities, resources, deliverables, and authority for the project.
• Verify that the charter has been approved and accepted by the relevant stakeholders.
• Determine if there is strong sponsorship for the project.
• Determine if the planning process incorporates the input from subject matter experts (SMEs) and senior
management.
• Verify if there is detailed project scope and plan/schedule documentation, detailing tasks/activities, and
assignments.
• Obtain and review the project risk assessment to make sure it is comprehensive and updated
periodically to ensure its continued relevance.
• Obtain and review the project's contract(s) to make sure it is in force, it was reviewed by the legal
department before signature, and its terms and conditions provide reasonable safeguards to protect the
organization’s interests.

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Key actions by phase (Planning)

• Review the Gantt, CPM, and financial analysis (e.g., payback, ROI, and IRR calculations).
• Review business requirement documentation.
• Review time and cost projections and actuals.
• Verify that system functionality and features have been signed off by the relevant
stakeholders.
• Verify that application controls (e.g., edits, validations, exception reporting, and control
totals) are included in the design.
• Determine if reporting functionality (internal/external, canned/ad hoc) is included in the
design.
• Determine if data migration is included in the project plan, and if the data will be cleaned
before being migrated into the new system.
• Determine if necessary, interfacing/compatibility/integration is included in the design and
being built according to plan.
• Determine if access controls are included in the design and being built according to plan
with necessary consideration given to segregation of duties.
• Verify data quality receives appropriate attention to address accuracy, integrity,
consistency, completeness, and existence expectations.
• Confirm input, output, processing, backup, recovery, and security controls are part of the
original design.

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Key actions by phase (Executing – 1 of 2)

• Review progress reports to determine if the work is advancing as planned by verifying that
their content provides sufficient and relevant detail, they are generated with adequate
frequency, are distributed to the necessary stakeholders, and variances are addressed
promptly.
• Review time, cost, and scope variance analysis.
• Review change orders and search for excessive number or monetary amounts,
concentration by vendor, and unauthorized or missing approvals.
• Verify robust controls are in place for vendor selection and relationship monitoring.
• Review purchases/procurement activities to verify they are for legitimate purchases, were
budgeted, approved, executed, and recorded by authorized individuals.
• Inquire with project stakeholders if meetings and other communications occur with
sufficient frequency and detail to facilitate project work and address issues effectively.
• Inquire with project stakeholders if conflict identification and management are effective.
• Verify that risk monitoring and reporting mechanisms are identifying issues and correcting
them promptly and effectively.

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Key actions by phase (Executing – 2 of 2)

• Determine if change management procedures are in place and being implemented
consistently, effectively, and followed by everyone.
• Review progress reports to make sure that metrics are being captured, analyzed, and
appropriate responses applied to correct deviations in the project's progress.
• Examine testing procedures, the issues log, and user acceptance records to make sure
they are comprehensive, and issues identified are being corrected promptly and
appropriately.
• Review relevant metrics. For example
- Schedule metrics:
• Critical path slippage
• Cumulative project slippage
• Number of activities added
• Number of activities completed early
• Ratio of activities closed to date to number expected (i.e., activity closure index)
- Resource metrics:
• Budget to actual variance
• Excess consumption of funds
• Unplanned overtime and activities
• Staff turnover.

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Key actions by phase (Closing)

• Review plan and process to transition the system to operations.
• Verify training plans are in place, verify they are sufficiently detailed and will
target all necessary system users.
• Verify maintenance arrangements and service level agreements provide adequate
safeguards to ensure the continuing operation of the system.
• Examine impact analysis documentation.
• Examine the following measures of effectiveness to verify the organization will
maximize its benefits from the system:
- Achievement of the established objectives
- User satisfaction
- Usage
- Usability
- Compliance with required design and performance standards
- Flexibility

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Thank you

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