Surviving a Project Audit

In the January 2007 issue of PM Network there's an article about project audits. I've never been through an audit probably because I haven't run one of the mega-projects with scopes a mile wide and budgets large enough to buy an island that are the mainstay of auditors. Regardless, I found the article interesting.

Dealing with a Project Audit

According to the folks at PM Network, here's how to react when your project attracts the scrutiny of auditors.

  1. Document decisions and action items from meetings with auditors as well as how items are resolved to provide evidence of effective internal control.
  2. Secure a copy of the specific audit work program that defines the scope and objectives as well as steps the auditors will follow.
  3. Determine the lines of communication between your team and the auditors and how you will delegate tasks, such as responding to documentation requests.
  4. Encourage periodic meetings with the auditors to discuss their observations and present your viewpoint.
  5. Make sure auditors know the full story. For example, if company procedures weren't followed, written documentation showing approval for the variance can go a long way in making your case.
  6. Delegate action plan tasks. Be ready when the auditors follow up — and they will. Depending on the quantity and severity of the findings, corrective action plans can be time-consuming.

An Audit by Another Name

Even though this high-level list hides a lot of the turmoil that is involved, an audit is likely going to involve these steps.

  1. Notification through an announcement letter that outlines the audit.
  2. Review and requests for documentation, such as a project organization chart, a project plan, status reports, and a risk management plan.
  3. Opening conference with the audit team, project manager and possibly the project sponsor.
  4. Self-assessment forms about controls, risks, and processes may be given to selected stakeholders.
  5. Field work, including interviews with stakeholders, observations, and documentation review.
  6. Closing conference attended by the audit team and the project manager.
  7. Draft report includes findings, recommendations, and an opinion section.
  8. Final report that includes management's response to the findings.
  9. Action plan and follow-up by the auditor on actions taken by management and the project manager.
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