Page 155 - DMGT302_FUNDAMENTALS_OF_PROJECT_MANAGEMENT

Fundamentals of Project Management

Notes Argyris, in his book, Overcoming Organizational Defenses, has described the processes by which
organizations continue ineffective practices. All of them are intended to help individuals “save
face” or avoid embarrassment. In the end, they also prevent organizational learning. Two questions
should be asked in the review. The first is, “What have we done well so far?,” and the second is,
“What do we want to improve (or do better) in the future?” Notice that I am not asking, “What
have we done badly?” That question serves only to make everyone defensive, because they
assume that you will punish them for things done wrong. Furthermore, there is always the
possibility that nothing has been done wrong, but there is always room to improve. Finally, the
results of the review should be published. Otherwise, the only people in the organization who can
take advantage of it are the members of the team just reviewed. If other teams:
1. Keep client(s) informed of project status. This can also help ensure that the completed
project will meet the needs of the client.
2. Reaffirm the organization’s commitment to the project for the benefit of project team
members.

9.3 Project Auditing

Audit

Audit is a review process. It is basically an internal audit of the propriety type in which the
appropriateness of any action and decision linked in the objective is checked. Usually this type
of audit is by a team headed by a senior well informed person with an open mind and an
analytical ability with a view to have an independent evaluation of the total project control and
reports to the top directly. The audit shall be a preventive rather than an investigative type.

Objectives of Audit
The very objective of the project audit system is to act as independent control. The reason for the
conduct of an audit control systems include:
1. All other control systems normally focus on their own achievements rather then point out
their differences/weaknesses. They may point out distorted facts and hence could be
misleading.
2. One may manipulate, make mistakes and may ignore vital points which could adversely
affect the project. The responsibility of the independent audit team should be to examine
all such major lapses (at least critical audits) critically one after the other which could be
corrected and taken care in future phase to avoid such mistakes.
3. A regular check on the management practices, policies and procedures shall help in
improving managerial efficiency. The team must encourage the majority of the people
who are always honest and sincere and get morally boosted.
4. The audit replies provide a method of evaluating financial and non- financial impact of
the project. The audit team’s functioning is to point out the various variances and the
suggestions how to improve rather than highlighting them with a view to criticize so that
appropriate actions should be taken to have the desired results including providing
information for future capital expenditure decision.
5. The audit also has a psychological impact on the individuals proposal capital investments.

Benefits of Audit & Review

1. It provides a check on the quality of estimate if taken care.
2. It points out the bottlenecks which many lead the prefect to fail/over run.

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