The Complete PMO

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The Complete PMO

• Chapter 15 - Project Auditing

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Please Note that the following Slide text is
derived from the content in The Complete Project
Management Handbook by Gerald Hill
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Project Auditing

• Auditing examines the overall efficiency,
  quality, and value of outcomes resulting from use
  or nonuse of a process, practice, policy, or
  capability.
• Project auditing measures project outcomes with
  the intent of determining contributing causes to
  those outcomes i.e. competency, capability,
  maturity, and other relevant conditions within
  the PM environment.

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PMO Project Auditing Responsibility

• PMO oversight examines all aspects of the PM
  environment for continuous improvement support.
• Monitor PM contributions to achieving business
  objectives.
• Identify and respond to weak/troubled project
  performance.
• Conduct quality management activities.
• Maintain professional standards within the PM
  environment.
• Ensure compliance with organizational policies,
  industry certification requirements, government
  regulations, contractual obligations.

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Project Auditing Activities Across the PMO
Continuum
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Project Auditing Activities across the PMO
Continuum

• The PMOs process guidance includes project
  auditing oversight using project metrics to
  validate compliance with standards for PM
  activities and business needs/interests/objectives
  .
• Project Office Reviews audits
  initiated/conducted by project managers to
  validate reported project status and identify any
  unreported indicators that threaten successful
  continuation of projects.
• Mid-range PMO Develop/implement project
  auditing processes that specify audit points for
  standard project audits and criteria that
  triggers project audits to assure project success
  throughout the PM life cycle.
• Center of Excellence Ensures that the auditing
  capability within the PM environment
  efficiently/effectively serves the interests of
  project and business managers.

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Project Auditing Function Model
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Set-Up Project Auditing Capability
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Determine Project Auditing Needs

• The PMO defines the proper types and levels of
  review and audit activities conducted within the
  PM environment.
• Primary PM Audits - Essential audits prescribed
  by the PMO and for use within the PM.
• PM Audit A comprehensive examination of PM
  performance.
• Project Performance Audit A detailed
  examination of the financial and business aspects
  of the project.
• Pre-project (Planning Phase) Audit A validation
  of project readiness for implementation.
• Post-project (Close Out Phase) Audit An audit
  that confirms project readiness for closure.
• Review of PM Methodology Examines the use and
  validates the content effectiveness of the PM
  methodology.
• Additional PM Audits.
• Customer satisfaction audit Examines customer
  perception of how well the project achieved
  desired objectives.
• Project recovery audit An that focuses on
  indicators of unsatisfactory project performance.

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PM Audit

• A comprehensive examination of PM performance.
• Project work plan and support plans created to
  guide the PM effort.
• Completion of required planning documents.
• Adequate inclusion of prescribed plan content.
• Appropriate inclusion of preferred practices and
  industry standards.
• Effectiveness of project work plan and
  support-plan implementation.
• Accomplishment of project work efforts according
  to applicable plans.
• Demonstrated tracking of actual project results
  against work plan elements.
• Timely identification and response to variations
  in work plan elements.
• Use of approved change-management procedures for
  modifying plan content.

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Project Performance Audit

• A detailed examination of the financial and
  business aspects of the project.
• The business case used to manage
  selection/continuation of the project.
• Relevance of business purpose and alignment with
  business interests.
• Achievement of staffing aligned with the resource
  allocation plan.
• Confirmation of trends toward achieving
  cost-benefit analysis results.
• Achievement and acceptance of project
  deliverables.
• Identification of customer relationship status
  and pertinent issues.
• Cost specified in the project work plan.
• Review of cost tracking and reporting methods and
  accuracy.
• Identification and evaluation of cost performance
  (planned versus actual).

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Pre-project Audit

• A validation of project readiness for
  implementation.
• Initial PM documents and activities.
• Finalization of the project definition.
• Validation of the project budget and resource
  allocation plan.
• Preparation of the project charter (specification
  of project manager authority).
• Authorization of project funding (if not in
  project charter).
• Executive (sponsor) approval to proceed with
  project implementation.
• Initial technical documents and activities.
• Review of customer requirements documents.
• Review of technical specifications documents.

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Post-project Audit

• An audit that confirms project readiness for
  closure.
• Customer acceptance of project deliverables.
• Receipt of interim and final customer acceptance
  statements.
• Completion of customer's evaluation of project
  performance.
• Preparation and submittal of invoices to
  customer.
• Receipt of customer invoice payments.
• Project lessons learned.
• Review of project financial and business
  performance.
• Review of PM plan content and effectiveness.
• Review of technical plan content and
  effectiveness.

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Review of PM Methodology

• Examines the use and validates the content
  effectiveness of the PM methodology.
• General content of PM methodology.
• Contains adequate descriptions of process (what
  to do) and practice (how to do it) for PM phases,
  activities, and tasks.
• Designates roles/responsibilities of project team
  members and other stakeholders participating in
  the completion and oversight of PM
  activities/tasks.
• Provides adequate tools to facilitate the
  accomplishment of methodology process elements.
• Process content of PM methodology.
• Presents a discernable process relationship and
  flow that advances the project through phases of
  initiation, planning, implementation/execution,
  and close out.
• Specifies all essential PM activities and tasks
  within each phase.
• Incorporates essential technical planning and
  performance activities in each phase.
• Methodology utilization by project managers and
  teams.

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Identify Project Auditing Resources

• The PMO evaluates project auditing requirements
  and designates preferred auditors and auditing
  teams.
• Project Managers and Project Team Members
  Project managers and team members with proven
  technical and/or PM competency in conducting
  formal/informal project audits.
• Internal Auditors Personnel in business units
  who can participate as auditors in the PM
  environment.
• Senior managers.
• Quality assurance managers.
• Quality control managers.
• Finance managers and specialists.
• Business analysts.
• Senior engineers and scientists.
• Senior technical specialists.

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Establish Project Audit Performance Points

• The PMO establishes audit performance points to
  specify when or under what conditions to conduct
  audits within the PM environment.
• Routine Project Audit Point Designated points
  in the PM life cycle or technical process at
  which a specified type audit routinely occurs.
• Triggered Project Audit Point Unscheduled
  audits conducted in response to a project
  performance indicator that suggests the need for
  a more detailed examination of some aspect of
  project or technical performance.
• Discretionary Project Audit Point Authority to
  conduct audits at the discretion of the PMO.

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Conduct Project Auditing
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Prepare for Project Audits and Reviews

• The PMO specifies the key audit preparation
  activities to guide project audit efforts.
• Identify and Convene Auditor/Auditing Team.
• Plan the Audit.
• Specify the type of audit to be conducted.
• Identify the lead auditor and audit team members.
• Review auditor/audit team preparation activities.
• Request timely receipt of project documentation
  for advance examination.
• Determine schedule and review auditor/audit team
  on-site activities.
• Identify audit responsibilities of the project
  manager and project team members.
• Identify any pertinent issues or problems that
  might be encountered.

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Conduct Project Audit

• The auditor/audit team collaborates with the PMO
  and project manager to perform on-site audit
  activities beginning with a meeting of affected
  participants.
• Interviews and questionnaires.
• Observations.
• Project document (and other archival data)
  review.
• Onsite work sampling.
• Analysis Analyze common threads of findings to
  identify topics of interest and points of focus
  in formulating impressions regarding aspects of
  projects.
• Initial audit feedback.

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Prepare Project Audit Report

• Executive summary.
• Overview of the audit type and purpose.
• General description of the project's condition.
• General identification of condition causes.
• Summary of recommendations.
• Audit approach.
• Overview of the activity steps performed by the
  auditor/audit team.
• Overview of audit methods used.
• Identification of auditor/audit team members.
• Identification of other audit participants.

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Manage Project Auditing Results
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Review Project Audit Results

• The PMO reviews project audit reports to assess
  trends within the PM environment used in
  proactively formulating solutions to resolve
  major/recurring issues/problems adversely
  affecting project performance.
• Identification of Troubled Projects.
• Findings that can be resolved by current project
  managers.
• Findings that cannot be resolved by current
  project managers.
• Findings that warrant PMO support of project
  manager efforts.
• Identification of recurring difficulties for a
  particular project manager.
• Identification of difficulties encountered across
  projects.
• Examination of Audit Completeness.
• Consistency of reported audit findings with known
  conditions.
• Clarity of findings statements that depict the
  adequacy/depth of auditor examination/analysis.

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Analyze Aggregate Program Results

• The PMO examines aggregate results of audits
  across all current/completed/terminated projects
  to identify/monitor trends and effectiveness of
  remedies applied to correct project performance
  deficiencies.

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Monitor Project Audit Follow-Up Activities

• The PMO monitors audit follow-up activities to
  oversee corrective action implementation at
  project and functional PMO levels.
• Activity statement A simple statement of the
  effort.
• Activity description.
• Activity completion date.
• Activity interim review dates.
• Activity manager.
• Activity close out date.