Chapter 14

PROJECT AUDIT AND CLOSURE

Chapter Outline

The project audit is an instrument for supporting continuous improvement and quality
management. We learn from past mistakes and what we did right. The project audit
includes three major tasks:

*Evaluate if the project delivered the expected benefits to all stakeholders. Was
the project managed well? Was the customer satisfied?

*Assess what was done wrong and what contributed to success.

*Identify changes to improve the delivery of future projects.

Without reflective assessment, valuable lessons learned are forgotten and mistakes are
repeated.

1. Project audits

A. In-Process Project Audits: Focuses on the project progress & performance

and checks if conditions have changed. Similar to a progress report but more
in depth. Ex. Have priorities changed? Is the project objective still relevant?
Should closure of the project be recommended?

B. Post Project Audits: Focuses on improving the management of future

projects and represents a broader view of the project’s role in the organization.
Ex. Were the strategic benefits claimed actually delivered?

2. The project audit process

A. Guidelines for conducting a project audit

1. First and foremost, the philosophy must be that the project audit is not
a “witch hunt”.
2. Comments about individuals or groups participating in the project are
no-nos. Keep to project issues, not what happened or by whom.
3. Audit activities should be sensitive to human emotions and reactions.
The inherent threat to those being evaluated should be reduced as
much as possible.

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 4. Accuracy of data should be verified or noted as subjective, judgmental,
or hearsay.
5. Senior management should announce support for the project audit and
see that the audit group has access to all information, project
participants, and project customers.
6. The attitude toward a project audit and its aftermath depends on the
“modus operandi” of the audit leadership and group. The objective is
not to prosecute. The objective is to learn and conserve valuable
organization resources where mistakes have been made.
7. The audit should be completed as quickly as possible.
8. The audit leader should be given access to senior management above
the project manager.

B. Steps taken:

Step 1: Initiation and staffing – The major principle of the project audit
is that the outcome must represent an independent, outside view of the
project. Because careers and reputations can be either tarnished (leading
to termination) or enhanced (leading to promotions), some organizations
rely on outside consulting firms to conduct the audits.

Step 2: Data collection and analysis –

Organization view:
1. Was the organizational culture supportive and correct for
this type of project? Why? Why not?
2. Was senior management’s support adequate?
3. Did the project accomplish its intended purpose?
4. Were the risks for the project appropriately identified and
assessed?
5. Were contingency plans used?
6. Were the right people and talents assigned to this project?
7. What does evaluation from outside contractors suggest?
8. Was the customer satisfied?

Project Team view:

1. Was the “planning” appropriate for this type of project?
2. Did the project conform to the plan?
3. Was the project over or under budget?
4. Was the project behind or complete as scheduled?
5. Did the team have adequate access to organizational
resources?
6. Was the team managed well?
7. What does evaluation from outside contractors suggest?
8. Was the customer satisfied?

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 Step 3: Reporting – The major goal of the audit report is to improve the
way future projects will be managed, therefore, the report attempts to
capture needed changes and lessons learned from the project. The report
serves as a training instrument for project managers of future projects.
Below is a general outline of what is found in practice:
Classification:
 Project type
 Project size
 Number of staff
 Technical Level
 And items relevant to the organization

Analysis:
 Project mission and objective
 Procedures used
 Organization resources used

Recommendations:
 Audit recommendations represent major corrective
actions that should take place.

Lessons Learned:
 Lessons learned serve as reminders of mistakes easily
avoided and actions taken to ensure future mistakes.

Appendix:
 The appendix should include backup data or details of
the analysis for others to view.

4. Project closure
The main understanding here is that all projects must come to an end. Therefore,
proper closure of a project can be very important to an organization.

5. Conditions for closure

A. Normal: The most common circumstance for project closure is basically a

completed project. Ex. The owners of a 2,500 s.f. home are currently living in
their newly built home.

B. Premature: Here the project may be completed early with some components
of the project eliminated. Ex. The client wants the project as is, at its current
state. The client might want to get it out to market earlier than originally
planned,.

C. Perpetual: These are projects that never seem to end. Ex. The client is
continuously adding small changes to the project

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 D. Failed project: This is where a project simply fails, for one reason or
another. Ex. Investors simply pull out of a project after forecasting a
declining market.

6. Signals for continuing or early project closure

Review previous audits from similar past projects help identify barriers to a
projects success as well as factors that contribute to a projects success.

7. The Closure Decision

The decision to continue or close down a project is fundamentally an
organizational resource allocation decision. Should the organization commit
additional resources to complete the project and realize the project objective? The
rationale for closing or proceeding is often based on cost.

A. Project closure process: As the project nears the end of its life-cycle, people
and resources are directed to other activities or projects. Carefully managing the
closure phase of a project is just as important as any other phase of a project.
Therefore, the PM must develop a plan, staffing, communicate the plan, and
implement the plan.

Below are typical questions that are associated with the close-out plan of a
project:
* What tasks are required to close the project?
* Who will be responsible for these tasks?
* When will the closure begin and end?
* How will the project be delivered?

Staffing in many cases the PM is the likely choice for closing down the project.

Communicating the termination plan early allows the project team to, (1) accept
the psychological fact that the project will end, and (2) prepare to move on.

Implementing the close-down plan includes several wrap up activities:

* Getting delivery acceptance from the customer.

* Shutting down resources and releasing to new uses.
* Reassigning project team members.
* Closing accounts and seeing that all bills are paid.
* Evaluating the project team and project manager.

Note: Orchestrating the closure of a project can be a difficult task. Implementing

closure usually takes on an emotionally charged web of happiness from a
successful completion of a project and sadness that newly forged friendships are
now being severed as individuals now go their separate ways. It is customary to

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 arrange a celebration of the completion of the project. Such festivities provide a
sense of closure and emotional release for the participants as they bid farewell to
each other.

8. Team, team member, and project manager evaluations

A. Team evaluation
B. Individual team member and project manager evaluation
C. Performance reviews

7 Summary

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