Auditing Project Performance
Updated: September 10, 2013
Project audits are rarely welcome and often contentious, but when done correctly, they offer unparalleled opportunity for process improvement and project rescue. It all depends on the process, the people and the purpose. Project auditing encompasses multiple goals depending on organizational requirements and project needs, including assessing project progress, evaluating adherence to project management standards, and resolving project problems.
In order to meet these needs, project audits can vary by type, purpose and timing. Verification audits are pre-planned, used to evaluate project progress and measure adherence to established project management standards. In this case, the project to be verified is selected according to established criteria. On the other side of the equation, problem response audits are unplanned and self-selecting, initiated in response to the pressing needs of a troubled project.
Every effective audit operation will be defined by these four characteristics - alignment, independence, transparency and institutional support. Reality dictates that audits will never be welcome, and audit staff will always be looked upon with skepticism. Can they be truly independent? Why are they always picking on me? How can I get this project done with all these interruptions? These are the natural thoughts that come with external scrutiny and it's quite understandable. Negative audit results, particularly as part of a pattern, can damage one's career, or even bring about dismissal in more extreme cases.
On balance, audits are essential, and legally imperative. But just having audit capability is not enough. Audit staff must be able to cut through the fear, negativity and skepticism to bring about positive results. The only way to achieve this is to empower auditors to do their job, and allow project managers to share in the audit process through training, communication and feedback. When the stage is set is correctly, audits bring clarity and structure to the project management process, which in the end, can only help the overworked project manager. The goal of the auditor and the project manager should be one and the same - to continuously improve project results and performance.
Every element of the project audit, from staffing to process, should be clearly defined and openly communicated, including:
1. The audit organization mission statement - clearly defining the goals, objectives, authority, and boundaries of the audit operation, as well as the type of audits to be conducted.
2. A detailed specification of auditor skills and experience, demonstrating that audit staff have sufficient expertise in project review, project standards, and if required, technical experience with the project subject matter.
3. A detailed specification of all audit related roles and responsibilities, for both audit staff and project staff (to include project managers, team members, project sponsors, customers and other stakeholders as needed).
4. A full listing of all criteria by which projects will be selected for an audit. You cannot audit every project - it would be too costly and time consuming, defeating the purpose of the audit process itself. Specific criteria should be established to identify projects for auditing according to risk, complexity, internal value, cost, and past performance of the performing organization.
5. A detailing specification of audit initiation procedures, including the process by which individual project manager's are notified of a pending audit and related preparation requirements.
6. A full listing of audit execution procedures, covering the methods and procedures to be employed during the audit itself. Audit procedures mat vary based upon the type and timing of any given audit but can include, personal interviews with project staff, review of documents, questionnaires, and other related techniques.
7. A complete specification of audit reporting procedures, covering the manner and method by which audit results will be reported and reviewed. In order to minimize the threatening nature of the project audit, all parties should be fully aware of how results will be reported and used within the organization.
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