Course Description

In "Megaprojects and Risk," the author studies multibillion-dollar construction projects woldwide, finding about nine out of 10 went over budget, with many running 40 percent over original estimates. The author, a professor of development and planning at a university in Denmark, concludes that sponsors of such projects systematically underestimate costs and environmental impacts, and overestimates revenues to win approval for their projects.

So what are organizations to do? The answer may lie in better and earlier oversight. Project audits are sometimes done near or after the project end. This is especially true for government agencies, and constitutes what may be seen as coming in after the battle is over and bayoneting the wounded. Studies performed on public works investments in Norway show that quality assurance needs to be done at the beginning of the project and then performed periodically to be most effective.

The course uses presentation, team exercises, articles, and case studies.

Benefits Achieved

At the end of this 3-day course, attendees will be able to:

1. Explain what constitutes a well-managed project
2. Explain the concepts of controls and governance in a typical construction/engineering project setting
3. Recognize the common problems experienced in a variety of construction/engineering projects and recommended typical solutions
4. Define typical project management controls for construction/engineering projects
5. Assist in evaluating project management controls

Who Should Attend

• Auditors and Project Management Office Staff who have the responsibility for reviewing, auditing and monitoring projects
• Project manager who wish to understand how their projects will be audited
• Others who wish to gain a detail understanding of what constitutes quality in a projects, including financial managers and business analysts

Preprequisites

At least two years of work on construction/engineering projects or two years of experience in internal auditing or financial auditing. Alternatively, an introductory course in project management may be taken to complete prerequisite requirements if the work experience criteria have not been met.

Course Duration

3 days. PMPs are eligible for 21 PDUs.

Course Content

Module 1:  Overview

• Learning Objectives
• Agenda and Course Structure
• Benefits of Project Management
• Goals of Assurance/Benefits of Auditing and Review

 Module 2: Context and Background

• Key Definitions
• Contract Types
• Types of Project Organizational Sturctures
• Common Problems - What can go wrong?
• Project Management Principles and Standards
• Auditing Standards

Module 3: Governance and Management

• What is Governance?
• Accountabilities and Responsibilities
• Key Governance and Management Roles and Responsibilities
• Monitoring: Roles and Responsibilities - what to look for
• Exercise

Module 4: Audit Process

• Key Steps
• Planning the Audit
• Audit Objectives
• Audit Program - Bid Review, Contract Review, Controls Assessments, Test of Billings, Control Verification, Schedule Assessment, Change Order Controls, Claims Management, Project Management, Financial Review including Earned Value Analysis
• Risk Assessment: Tailoring the audit program to the project
• Documentation
• Work Papers and Standards
• Interviews
• Site Visits
• Audit Report and Opinion
• Follo up
• Article Reading

Module 5: Risk Management

• Risk Identification, Prioritization and the Risk Universe
• Risk Analysis - Probability and Impact
• Risk Management in Contracts and Procurement
• Preliminary Design Review Index (PDRI) Tool
• Selecting the Righ Projects to Audit
• Periodic Risk Evaluation
• Controls Design to Account Risk
• Monitoring and Auditing Risk Management Strategy
• Exercise

Module 6:  Construction Project Life Cycle - Assurance Opportunities

• The Project Life Cycle
• What are Control Points?
• Initiation - Concept and Feasibility
• Quality Assurance 1 - Needs analysis, strategy and alternatives
• Planning - Design
• Quality Assurance 2 - Contracting Strategy, Success Factors, Risk Uncertainty, Cost and Contigency, Project Organizational Structure
• Procurement
• Evaluation the project schedule - what to look for
• Evaluating the Work Breakdown structure - what to look for
• Contracts and Contractual Relationships
• Recognizing Fraud
• Transition to Operations, Turnover, and Close-out
• Monitoring: Project Management - what to look for
• Case Study Exercise - Part 1

Module 7: Troubled Projects

• Characteristics  of a Troubled Project
• Making the Project Successful - Options
• Typical Findings and Possible Recommendations
• Characteristics of a Well Run Project
• Case Study Exercise - Part 2