A project audit is a structured review process of a project's performance, progress, and outcome against pre-defined objectives, goals, and criteria. For a project manager, a project audit is really crucial as labor, time, and money are all at stake. This is why internal audit teams involved in project management can benefit from project auditing to ensure that all initiatives inside a business are on track.
If project audit is not done regardless of whether they involve a migration to something like a new technology, a new financial reporting method, or even the project management function in its entirety, it may fail to recognize certain risks that have inefficient governance, and lose time and money, among other things. When you enroll in the easiest Project Management certification you get to learn to lead project teams to success and help with the project audit.
What is a Project Audit?
A project management audit is a systematic evaluation that attempts to analyse a specific project using certain criteria. Project quality, performance, and conformity to the statement of work are examples of these.
Audits differ from regular review meetings in that they are undertaken by someone outside of the project team and the management team. The project audit is often carried out by a dedicated audit department, an advisory board, or another third-party auditor. To audit is a verb that implies to inspect, analyze, check, assess, review, or evaluate. It is not different to anything that a project manager does all the time.
Internal audit teams are likely to desire to embrace project auditing in project management and their associated frameworks, and audit leaders should preferably integrate agile auditing approaches while doing so.
This can assist your internal audit members in getting a better grasp on their workloads rather than attempting to juggle many project audits haphazardly or moving inefficiently through one project audit to another one.
Why Project Audit is Important?
Why are we doing this? For one thing, it helps us understand where we are in relation towards where we want to be in the project. Project auditing informs us whether or not things are going as intended. We are continually assessing the health of our project, its economic well-being, the timetable and timeliness of completion, as well as the equipment and tools we are utilizing.
The purpose of a project audit, like any other excellent project, should be clearly established from the start. Project audits are performed on a macro level to verify PM standards are maintained, to discover underlying reasons of project hiccups and failures, this is done to enhance future project performance and results. Such goals are applicable to every organization, regardless of aim or purpose.
An audit will strive to establish a project's total value as assessed by return on investment, in addition to analyzing how effectively a project adheres to the statement of work (ROI). Another significant emphasis of project audits is risk management. Projects must frequently adhere to industry-specific standards and norms, and an audit will reveal areas where the firm may be at danger of noncompliance.
Furthermore, an agile auditing technique allows you to embrace input from interested parties on a continuous basis and make changes on the fly, which might fit with Project audit goals. You want to be able to offer feedback that has an immediate impact, especially if you're performing a project review while the project is still in process, rather than recognizing anything once the audit and the project are completed.
Types of Project Audit in Project Management
Without a comprehensive understanding of the various types of audits outlined in the PMBOK, conducting a Project audit isn't the best of times for any PM.
Check out the list below for an overview:
1. Normal Audit
This is referred to as an audit, and it is a component of the Monitoring and Controlling approach team. It is often known as Inspection since it is essentially a quality control procedure. When the item is built, the assessment is done.
2. Quality Audit
This is a critical examination of the project that forms part of the execution method. They investigate if the team adheres to the company's procedures.
3. Risk Audit
These audits are performed by both the Monitoring and Controlling teams. They aid in the overall progression of the treatment. You may also audit and assess the overall efficacy of the project risk management approach here.
4. Procurement Audit
The acquisition Audit Team is part of the Completion procedure team. An organized general comment flushes out worries, establishes mastered instructions, guarantees difficulties are fixed for future tasks, and recognizes favorable outcomes as well as problems that warrant transfer to different other procurements as part of procurements closing. Ace your PMP exam in the very first go and enrol in accredited PMP certification programs.
Project Audit Process Checklist
Project audit process checklist consists of the following mentioned points:
1. Develop the Achievement Criteria
- Conduct interviews with both the project sponsors as well as project manager to define as well as agree on the success criteria for the project.
- Make certain that the criteria are developed in accordance with the company's needs.
- Create a checklist with questions about the success criteria.
- Distribute the checklist to key team members and chosen stakeholders who are actively connected to the project.
- Assign a mediator or auditor to conduct interviews with the team.
- Gather the team's responses.
- Concentrate on their perspectives on the project's accomplishments, failures, lost opportunities, and obstacles.
- Create an audit questionnaire with open-ended questions.
- Offer the survey to the team.
- Arrange a team gathering to discuss their opinions and ideas about the project's present stage.
- At the meeting, discuss and attempt to address important project issues, concerns, and obstacles.
- Identify and agree on optimum cooperation and collaboration techniques.
- Conclude the meeting by confirming that the first stage of the project audit checklist has been completed.
2. Analysis
- Individual research interviews should be conducted with key stakeholders (funders, project manager, team) to discover and explore the project's past, present, and future problems, difficulties, and possibilities.
- Interview key players (contractors, vendors, and suppliers) about the same issue.
- Create a report that summarizes the conversations and identifies the project's general issues.
- Do a root-cause analysis to uncover and acquire insight into the underlying causes of the problems.
- Examine each issue to assess its severity and influence on the project.
- Prioritize the issues based on their effect and severity.
- Make a list of the problems that have been prioritized.
- Sort the list according to the following problem categories:
- Business necessities
- Team-related
- Scope
- Documentation
- Risks and contingencies Milestones and delivery status
- Changes and issues
- Quality
- Examine each problem category to find and assess which project expectations have indeed been satisfied and which remain unsatisfied and unmet.
- Examine the project quality plan to determine which solutions can be implemented and which possibilities may be achieved.
- Meet with the key stakeholders to discuss additional possible solutions (not included in the quality plan) to the challenges.
- Identify and document the lessons learnt, which may be used to enhance the quality and performance of future initiatives within the same company.
- Check that the second stage of the project audit checklist has been completed.
3. Report
- Gather all of the records created during all of the interviews and meetings held throughout the previous phases in this project audit checklist.
- Gather the information gathered from the surveys.
- Incorporate the information from the project documentation.
- Determine the quality plan-defined solutions that have been effectively implemented to problem-solving.
- Determine which opportunities have been effectively realised. Determine which additional solutions have been applied.
- Create a list of all the concerns that have been handled effectively.
- Create a project audit report.
- Provide recommendations in the report.
- Describe the audit process's specifics.
- Send the report to upper management.
- Ascertain that the third stage of the project audit checklist has been completed.
Download Project Audit checklist here!
How to Gather a Project Management Audit Checklist?
Now that you know what a project management audit involves and the reason for its importance, let us get into the specifics of performing one. To begin, you will need to compile your pm audit checklist:
Here are a few crucial components to add on your project management audit checklist.
1. Audit Objectives/Mission Statement
A project audit, like any other project, must have a clear aim or set of objectives that it tries to fulfill. A overview of the auditing party, its competence, and the precise sort of audit to be performed may also be included in the audit mission statement.
2. Criteria for Project Auditing
Auditing criteria refer not only to the standards against which a project will be assessed but also to the causes that led to the project being audited at the initial place. A verification audit, for example, is frequently pre-planned and selects projects for examination based on predefined criteria. On the flip side, Issue response audits are usually required when a project is suffering or failing. The audit's scope and objective will be determined by the triggering conditions.
3. Procedures for Execution
Your project audit checklist ought to encompass the methodology and processes for conducting the audit. Interviews between project team members and stakeholders, evaluations of documents or other project artefacts, and surveys are just a few examples.
4. Procedures for Reporting
Lastly, you should be certain about the audit reporting methods. Informing all stakeholders on how audit results will indeed be shared and used inside the business can go a long way towards minimizing tensions and the perceived danger of a feared audit.
Project Management Audit Process
The project management audit process consists of the following steps:
1. Plan the Audit
You should never begin something without a strategy. Inform everyone engaged in the audit and the project about the upcoming audit and emphasize that it is nothing to be concerned about. It's a strategy of improving things rather than assigning blame.
2. Conduct the Audit
Do the audit and go through a rigorous procedure to obtain all of the data and proof. This involves conducting in-person, group, or questionnaire interviews with the project sponsor, manager, and team.
3. Summarize the Audit
You'll have a lot of data at this stage, so summarize your findings regarding any improvements and flaws in an executive summary to provide a clear and wide overview. Make a point of recognizing and praising people who have performed admirably.
4. Present the Results
Then, spanning from your team to your stakeholders, you'll want to give that summary of results to everyone who needs to know about the audit. At this stage, you should look for opportunities that have been realised and executed, as well as a list of all problems that have been resolved and have not been resolved. Also, please share your recommendations.
5. Decide an Action Plan
With all of this information, you can now create an action plan to assist in increasing efficiency. Get others involved and establish that path with tasks and due dates. Define the solution using all of the records gathered via interviews, meetings, or via questionnaires. This will be forwarded to upper management.
6. Plan a Follow-up
Don't let this action plan slide. Return to it and ensure that the strategy is proceeding as planned.
7. Repeat
This is an exhaustive list that should be created in a circle because you should never grow comfortable. Therefore, the more audits you do, the better efficiencies you will achieve.
Audit Policies and Activation Procedures
To reap the benefits of a project audit, all stages, aspect, and result of the audit process should be clearly defined and freely reported, including:
- Audit Mission Statement: This document must clearly identify the audit operation's intentions, objectives, authority, and boundaries, as well as the types of audits to be performed.
- Audit Competency Specifications: A thorough description of the auditor's qualifications and experience, demonstrating that the audit personnel are qualified to audit the project.
- Roles and Duties of Players Engaged: A thorough definition of all the duties and responsibilities covered by the audit, for both the person performing the audit and the project team, which includes the project manager, team members, project sponsors, clients, and other stakeholders.
- ‘Trigger’ Audit Criteria: a comprehensive list of all the criteria used to choose projects for audit. It would be prohibitively expensive and time-consuming, defeating the point of the audit process altogether. As a result, precise criteria should be developed to select projects to be audited based on risk, complexity, internal value, expenses, and so on.
- Audit Start Procedures: a characterization of the procedures for starting the audit, including how specific project managers are notified of an exceptional audit and the associated preparation requirements.
- Audit Execution Processes: Audit execution processes: A collection of audit procedures that encompass the audit methodologies to be applied. This varies depending on the nature and timing of the audit, but may involve personal interviews with project workers, document reviews, questionnaires, and other activities.
- Audit Reporting Processes: A description of the audit reporting procedures, including how and when the audit results will indeed be reported and reviewed. To reduce the threat of the project audit, all stakeholders involved should be fully informed about how the results will be released and used within the business.
- Audit Redress Procedures: A description of the steps to be followed to file an appeal and/or dispute the audit results reported.
Audit management software or tools assist businesses in streamlining their audit operations and adhering to legislation or internal standards.
Audit management tools are most commonly used in industries with strict regulations, such as chemicals, medicines, health care, and food and beverage. Compliance professionals and operations managers may utilize audit management software to plan audits and analyze outcomes.
Here are some examples of project management tools that can aid in project management audits:
- Project Management Software: Project management software, such as Microsoft Project or Asana, can provide a comprehensive view of the project, including tasks, timelines, dependencies, and progress. The software can be used to identify potential issues, such as delays or budget overruns, and to track the project's performance against its objectives.
- Gantt Charts: Gantt charts can be used to visualize the project schedule and identify critical paths, bottlenecks, and other potential issues. The charts can help the auditor assess the project's progress and identify areas where improvements can be made.
- Risk Management Tools: Risk management tools, such as risk registers and risk matrices, can help identify and assess project risks. The tools can be used to evaluate the likelihood and impact of risks and to develop mitigation strategies to address them.
- Reporting Tools: Reporting tools, such as dashboards and reports, can be used to provide real-time project data and insights to stakeholders. The reports can be customized to focus on specific metrics or key performance indicators (KPIs) and can be used to monitor the project's progress and identify areas for improvement.
- Project Evaluation Tools: Project evaluation tools, such as performance measurement frameworks or maturity models, can be used to assess the project's overall performance against best practices or industry standards. The tools can help identify strengths and weaknesses in the project's management practices and provide recommendations for improvement.
Project management tools can be useful in conducting project management audits by providing data, analysis, and visualization to support the audit process. However, it's important to use these tools in conjunction with a comprehensive audit methodology and to ensure that the audit is conducted by qualified professionals with relevant expertise and experience.
Benefits of Project Management Audit
A project management audit is a structured review of a project's management processes and performance. The audit aims to identify areas of improvement and provide recommendations to enhance project management practices and outcomes. Here are some benefits of project management audit with examples:
- Identify Potential Issues Early: By conducting a project management audit, potential issues can be identified early in the project lifecycle, allowing for timely corrective action. For example, an audit may reveal that a project team is falling behind schedule and has underestimated the time required to complete critical tasks. This information can be used to adjust the project plan and allocate resources more effectively.
- Improve Project Outcomes: A project management audit can help improve project outcomes by identifying best practices and areas for improvement. For example, an audit may reveal that a project team is not effectively communicating with stakeholders, leading to misunderstandings and delays. The audit may recommend implementing regular status updates and stakeholder engagement to improve communication and ultimately improve project outcomes.
- Ensure Compliance with Regulations and Standards: A project management audit can help ensure that the project is in compliance with regulations and standards. For example, an audit may reveal that a project is not meeting environmental or safety regulations. The audit may recommend implementing specific procedures or controls to ensure compliance with regulations and standards.
- Enhance Project Management Processes: A project management audit can help enhance project management processes by identifying areas for improvement. For example, an audit may reveal that the project team is not effectively managing risks. The audit may recommend implementing a formal risk management process to identify, assess, and mitigate risks more effectively.
- Improve Stakeholder Confidence: By conducting a project management audit, stakeholders can gain confidence in the project's management processes and outcomes. For example, an audit may reveal that the project team has robust project management processes in place and is effectively managing risks, leading to increased stakeholder confidence in the project's success.
Project management audits can provide a range of benefits, including identifying potential issues early, improving project outcomes, ensuring compliance with regulations and standards, enhancing project management processes, and improving stakeholder confidence. These benefits can lead to more successful project outcomes, improved organizational performance, and enhanced stakeholder satisfaction.
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Conclusion
By now you know what project audit in project management is. Performing a project audit is a lot easier when you have a centralized project management system that stores and organizes all relevant information from each and every project your team has worked on.
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