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Setting Practical Standards for Project Management Auditing


Read more in the full article below.

Project management 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.  (Also Read:  Planning for the IT Management Operational Audit)

4 Keys to Project Audit Planning

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.

Audit Policies and Activation Procedures

What will you need to make project auditing a standard part of your approach to managing successful projects.  To realize expected benefits, every element of the project audit, from staffing to process, should be clearly defined and openly communicated, including:

  • Auditing Mission Statement. The audit organization mission statement must clearly define the goals, objectives, authority, and boundaries of the audit operation, as well as the type of audits to be conducted.
  • Audit Skills Specification.  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.
  • Stakeholder Roles and Responsibilities. 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).  (Also Read:  Planning Concepts for the Project Management Office)
  • Audit "Trigger" Criteria. 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 the past "record of results" of the performing organization.
  • Audit Initiation Procedures. A detailing specification of audit initiation procedures, including the process by which individual project managers are notified of a pending audit and related preparation requirements.
  • Audit Execution Procedures. 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.
  • Audit Reporting Procedures.  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.

Planning Ideas into Audit Action

The goal of the standardized audit process is to provide pre-defined practices to be adapted and applied as needed to multiple "audit situations". Standardized practices should incorporate the elements above, organized into executable steps and structured into a defined timeline.  Above all, effective auditing practices require depend upon communication - to provide the "informational" basis for the audit and to set expectations for what will happen, when and how.  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.  (Also Read:  Understanding Project Lessons Learned)

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