The ultimate goal of a project audit is to ensure that the project is meeting project management standards through investigations and evaluations. The following are five main objectives of a project audit:1) Assure Quality of Products and Services, 2) Assure Quality of Project Management, 3) Identify Business Risk, 4) Enhance Project Performance, and lastly to 5) Learn. To realize these objectives areas examined will be as follows:
In some projects, all specified deliverables are produced, yet some key stakeholders are dissatisfied with the project. Reasons for stakeholder dissatisfaction are varied, and could include poor understanding of the project and deliverables, unreasonable expectations, project staff not understanding stakeholder needs adequately and not producing what they want, and changes to stakeholder needs being ignored during the project through inflexible change management. It is crucial for sound project management to go beyond obtaining formal stakeholder sign- offs, to obtaining a deep understanding of stakeholders and their needs, and ensuring the project meets those needs as far as practical. Communication with stakeholders is critical to project success. As the project progresses, it can be gauged whether or not the key stakeholders feel they are being treated appropriately.
Project purpose achievement
Even if all the deliverables of a project are produced, it does not mean the project’s purpose will be achieved. It is therefore essential to audit the achievement of the project purpose as a separate matter. Questions the auditor could ask might include:
- Are the key objectives of the project clearly stated and realistic?
- Are there likely important consequences of the project that have been ignored?
- Are the objectives of the project aligned to the organisation’s mission, vision, values, key objectives and strategies?
- As far as practical, do the key stakeholders support the objectives, as applied to them?
At each stage of the project, the auditor should consider whether the project is on track to achieve the project purpose. Frequently, it is beneficial to consider achievement of the project purpose in the short-, medium- and long-term, rather than only the effect immediately after project completion.
Projects should ideally be completed at or below budget. However, it is important when auditing this factor to take into account changes to the quantity and quality of deliverables, and events that could not reasonably have been anticipated. In many cases, cost overruns are indicative of poor project risk management, and a failure to learn lessons from other projects.
Time management is an essential component of project management, and is therefore an important audit concern. The comments made above about costs may also apply to time.
Shortfalls may occur at any time in the project lifecycle. There may be shortfalls in the quantity or quality of the deliverables, the testing of deliverables, the ability of deliverables to work together to achieve the project purpose, in reporting and meeting governance requirements, in communications, and in other areas of internal control. When shortfalls occur, there is a temptation for project managers to not react quickly and adequately, or to overreact. Resources or time may be wasted, and other items that require attention may be given inadequate attention. The risk attributable to the project may increase without management noticing. Even though many of the potential shortfalls are implicitly addressed under other headings, it is useful to have shortfalls as a separate category to remind the auditor to give them adequate attention.
As projects progress, it is important project managers adequately address relationships, particularly those between the project team and key stakeholders, the project governance team, project sponsors, operational management, and others. It is important for the smooth functioning of the project for relationships within the project team to be well managed. There have been many examples of projects achieving the project purpose and all deliverables within time and cost budgets, yet being deemed to be unsuccessful. Relationship damage may result in a seemingly successful project being harshly criticised by key stakeholders, governance members and general management. If relationships are well-managed, the consequences of relationship damage may be avoided.
There is a temptation to place almost exclusive audit focus on the documentation produced by the project management methodology being used. It is noted that documentation may easily hide significant problems. Examples are key stakeholders may have formally accepted the deliverables without being satisfied with them, and changes requested to deliverables might have been formally rejected when their inclusion would have significantly improved the project purpose at minimal cost.