project management 569

8/3/2019 Project Management 569

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Asad Hussain MBA HRM Roll No.508195455

ALLAMA IQBAL OPEN UNIVERSITY

ISLAMABAD

ASSIGNMENT NO.2

ON

PROJECT MANGEMENT (569)Topic:-

The role of audit in management of a project. Select aproject undertaken by a business organization and

analyze the role of audit team being played in thatspecific project, e.g. pre audit, post audit, and its

impact on the project

SUBMITTED BY_ ASAD HUSSAIN

SUBMITTED TO SIR ATAULLAH SHAH SB.

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ROLL NUMBER 508195455.

MOB. NUMBER 03335174447.

ACKNOWLEDGEMENT

All praises to Almighty Allah, the most Gracious, the most Beneficent

and the most Merciful, who enabled me to complete this assignment.

There is always a sense of gratitude one expresses to others for the

helpful and needy service they render during all phases of life. I have

completed this assignment with the help of different personalities. I

wish to express my gratitude towards all of them.

It gives me immense pleasure to express my deep regards and

sincere sense of gratitude to Mr. Salman Baig, Deputy Director Rural

Cell, PTA H/Qs, Islamabad for his support which helped me throughout

my assignment.

I would also like to thank my teacher MR. ATAULLAH SHAH SB for

steering my confidence and capability for giving me insight into

assignment by giving me exposure to the arena of competitive and

real world.

Lastly I would like to thank my parents and friends for their constant

support during the duration of my training.

Thank You One and AllASAD HUSSAIN.

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ROLL NO. 508195455.MBA (HRM).

EXECUTIVE SUMMARY

This assignment is a research-oriented activity, which represents both the

theoretical and practical implication of the topic. In the first section of this

assignment, I explain the theoretical aspect of the topic and all major parts has

been explained which are involved in the Audit of any project. For empirical

study, I select Pakistan Telecom Authority (PTA) which is a regulatory authority

for telecom sector and me the employee of countrys biggest telecom company

i.e. Pakistan Telecommunication Company Limited, to analyze the audit process

of a PTA project for installation of Telecentres throughout the country.

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CONTENTS:

TITLE PAGE... 1

ACKNOWLEDGEMENT 2

EXECUTIVE SUMMARY.. 3

CONTENTS..... 4

INTRODUCTION OF TOPIC. 5

REPORTING SCHEDULE. 5

FINAL REPORT. 6

PHASE-I.. 7

PHASE-II.. 8

PHASE-III.... 9

CONCLUSION 10PROJECT AUDITING 11

PURPOSE OF EVALUATION. 12

DEPTH OF AUDIT. 13

MEASUREMENT 15

PRACTICAL STUDY (PTA).. 16

DEPARTMENTALIZATION. 17

THE PROCESS OF AUDIT 19

FINANCIALS.. 20

OBSERVATIONS 20

DATA COLLECTION METHOD 21

SWOT ANALYSIS.. 21

CONCLUSION. 22

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RECOMMENDATIONS.. 23

Project Audit Process

Introduction

The process of auditing any project starts out with a formal

notification being sent to the project members, informing them of theimpending audit. The notification will also inform the project members

of the audit team's objective and what compliance issues the team

will be examining. After sending project members notification of the

impending audit, the audit team will schedule and conduct a face-to-

face meeting with the project head and any administrators. The audit

team will examine the project's records and data files ahead of the

full audit.

Reporting Schedule

After the formality of the initial inquiry is over, the audit team begins

a full-fledged inquiry into the project. The team will attempt to glean a

further idea of how the project is functioning by going over the

project's background documents and conducting interviews with the

project head and the project's sponsor. The audit team will also

conduct a series of interviews with members of the project, mapping

out their individual roles in the project, to get a more detailed idea of

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the project's hierarchy and the validity of each member's role. During

the inquiry and reporting phase of the audit, the audit team will

periodically report its finding back to the project's sponsor. The audit

team will also examine the project members' efficiency in following

their set timelines and will record any inconsistencies in the project's

goals and individual project member's performance.

Final Report

After sufficient data has been gleaned from the project's data files

and group member interviews and the audit team has a firm idea of

how the project is supposed to be carried out, the audit team will

create a formal draft of its report. After the management team

presiding over the audit team has reviewed the formal report and

decided whether to recommend any amendments or further inquires

into the project, the audit team will construct the final draft. The final

draft of the audit report will contain a summary, list background and

key issues raised, and provide an assessment of the quality of the

project members' performance in carrying out its said goals.

A project audit provides an opportunity to uncover the issues,

concerns and challenges encountered in the execution of a project. It

affords the project manager, project sponsor and project team an

interim view of what has gone well and what needs to be improved

with the project to successfully complete it. If done at the close of a

project, a project audit can be used to develop success criteria for

future projects by providing a forensic review. This review will provide

an opportunity to learn what elements of the project were

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successfully managed and which ones presented some challenges.

This will help the organization identify what it needs to do so that

mistakes are not repeated on future projects.

Regardless of whether the project audit is conducted mid-term on a

project or at its conclusion, the process is similar. It is generally

recommended that an outside facilitator conduct the project audit.

This ensures confidentiality but also provides the team members and

other stakeholders with the opportunity to be candid. They know that

their input will be valued and the final report will not identify

individual names, rather it will only include facts. It is common that

individuals interviewed during the project audit of a particularly badly

managed project will find speaking with an outside facilitator provides

them with the opportunity to express their emotions and feelings

about their involvement in the project and/or the impact the project

has had on them. This venting is an important part of the overallaudit.

A project audit consists of three phases:

Phase 1: Success Criteria and Questionnaire Development

Phase 2: In-depth Research

Phase 3: Report Development

Phase 1 - Success Criteria and Questionnaire Development

1. Success Criteria Development

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Interview the core project sponsor and project manager to determine

their success criteria for the project audit. This ensures that their

individual and collective needs are met.

2. Questionnaire Development

Develop a questionnaire to be sent to each member of the

core project team and selected stakeholders. We find that

individuals will often complete the questionnaire in advance

of an interview. It helps them to focus their thoughts. The

actual interview provides the facilitator with the opportunity

to gain deeper insights into the interviewees comments.

The questionnaires help them to reflect on the projects

successes, failures, challenges and missed opportunities.

3. Project Audit Questions

There are many questions that can be asked. It is easiest to

develop open-ended questions for the interviews. These

questionnaires can be used for team members and/or other

stakeholders who cannot attend an interview.

Develop the questions so that they will help to identify the major

project successes; the major project issues, concerns and challenges;

how the team worked together; how vendors were managed; how

reporting and meetings were handled; how risk and change wasmanaged, etc.

Phase 2 - In-Depth Research

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1. Conduct individual research interviews with the Project Sponsor,

Project Manager and Project Team members in order to identify

the past, current and future issues, concerns, challenges and

opportunities.

2. Conduct individual research interviews with stakeholders

including vendors, suppliers, contractors, other project internal

and external resources and selected customers.

3. Assess the issues, challenges and concerns in more depth to get

to the root causes of the problems.

4. Review all historical and current documentation related to this

project including;

Team Structure

Scope Statement

Business Requirements

Project Plan

Milestone Report Meeting Minutes

Action Items

Risk Logs

Issue Logs

Change Logs

5. Review the Project Plan to determine how the Vendor Plan has

been incorporated into the overall project plan.

6. Interview selected Stakeholders to identify and determine what

their expectations of the project had been and to identify to what

extent their expectations have been met.

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7. Review the Project Quality Management and the Product Quality

Management to identify the issues, concerns and challenges in

the overall management of the project and to identify the

opportunities that can be realized through improvements to the

attention of project and product quality.

Identify the Lessons Learned that can improve the performance of

other future projects within the organization.

Phase 3 - Report Development

1. Compile the information collected from all of the interviews.

2. Compile the information collected from individuals who only

completed the questionnaire.

3. Consolidate the findings from the project documentation review.

4. Identify the issues, concerns and challenges presented through

the review of the Project Quality Management and Product

Quality Management plans and isolate the opportunities you

believe may be realized.

5. Identify all of the projects issues, concerns and challenges.

6. Identify all of the projects opportunities that can be realized

through this reports recommendations.

7. Identify the Lessons Learned that can improve the performanceof future projects within the organization.

Finalize the creation of the report and recommendations on the basis

of the findings and present this detailed report and recommendations

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including the road map to get future projects to the next level of

performance.

Conclusion

The purpose of a project audit is to identify Lessons Learned that

can help improve the performance of a project or to improve the

performance of future projects by undertaking a forensic review to

uncover problems to be avoided. In this way, project audits are highly

beneficial to the organization and provide the following multitude of

outcomes:

Development of Lessons Learned on the project that can be

applied to both the organization and its vendors.

Development of strategies, which if implemented within the

organization, will increase the likelihood of future projects and

change initiatives being managed successfully.

Development of project success criteria which might include on-

time, on-budget, meeting customer and other stakeholder

requirements, transition to next phase successfully executed,

etc.

Recognition of risk management so that risk assessment and the

development of associated contingency plans becomes

commonplace within the organization.

Development of change management success criteria which

might include how staff are involved, how customers are

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o A third dimension, again somewhat straightforward and

expected, is business/direct success

o The last dimension, somewhat more difficult and nebulous

to ascertain, is future potential

A successful project evaluation can help an organization:

o Identify problems earlier

o Clarify performance, cost, and time relationships

o Improve project performance

o Locate opportunities for future technological advances

o Evaluate the quality of project management

o Reduce costs

o Speed the achievement of results

o Identify mistakes, remedy them, and avoid them in the

future

o Provide information to the client

o Reconfirm the organizations interest in, and commitment

to, the project

Evaluation often makes recommendations that relate to

ancillary, unplanned, but important contributions to the project

and its parent:

o Improve understanding of the ways in which projects may

be of value to the organization

o Improve processes for organizing and managing projects

o Provide a congenial environment in which project team

members can work creatively together

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The Project Audit

Six parts of a project audit:

o 1. Current status of the project

o 2. Future status

o 3. Status of crucial tasks

o 4. Risk assessment

o 5. Information pertinent to other projects

o 6. Limitations of the audit

It is far broader in scope than a financial audit and may deal with

the project as a whole or any component or set of components of

the project

Depth of the Audit

Time and money are two of the most common limits on depth of

investigation and level of detail presented in the audit report

Accumulation, storage, and maintenance of auditable data are

important cost elements

Two often overlooked costs are the self protective activity of

team members during an audit, and the potential for project

morale to suffer as a result of a negative audit

There are three distinct and easily recognized levels of project

auditing:

o General audit - normally most constrained by time and

resources and is usually a brief review of the project

touching lightly on the six parts of an audit

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o Detailed audit - usually conducted when a follow-up to the

general audit is required

o Technical audit - generally carried out by a qualified

technician under the direct guidance of the project auditor

Timing of the Audit

The first audits are usually done early in the projects life

Early audits are often focused on the technical issues in order

to make sure that key technical problems have been solved

Audits done later in the life cycle of a project are of less

immediate value to the project, but are more valuable to the

parent organization

As the project develops, technical issues are less likely to be

matters of concern

Conformity to the schedule and budget become the primary

interests

Management issues are major matters of interest for audits

made late in the projects life

Postproject audits are often a legal necessity because the

client specified such an audit in the contract

Construction and Use of the Audit Report

The information should be arranged so as to facilitate the

comparison of predicted versus actual results

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Significant deviations of actual from predicted results should

be highlighted and explained in a set of footnotes or

comments

Negative comments about individuals or groups associated

with the project should be avoided

Measurement

Measurement is an integral part of the audit/evaluation

process

Performance against planned budget and schedule usually

poses no major measurement problems

Measuring the actual expenditure against the planned budget

is harder and depends on an in-depth understanding of the

procedures used by the accounting department

It is a very difficult task to determine what revenues should be

assigned to a project

All cost/revenue allocation decisions must be made when the

various projects are initiated

The battles are fought up front and the equity of

cost/revenue allocations ceases to be so serious an issue

As long as allocations are made by a formula, major conflict is

avoided-or at least, mitigated

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Practical Study

The chosen organization is Pakistan Telecommunication Authority

(PTA) for the data collection purpose. PTA is an autonomous body

established under Pakistan Telecommunication (Re-organization) Act

1996 to regulate, operate and maintain telecommunication systems

and services in Pakistan. PTA has its Headquarter in Islamabad and

five Zonal offices in Karachi, Lahore, Rawalpindi, Peshawar and

Quetta. We shall discuss the use of visual aids by the Organization.

Functions and responsibilities of Pakistan Telecom Authority are as

under:

Regulate the establishment, operation and maintenance of

telecommunication systems

Make recommendations to the Government on polices

Protect the rights of licensees and interests of consumers

Create fair competition in telecommunication sector

Promote rapid modernization of telecommunication systems and

services.

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Departmentalization

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PTA has broadly divided into two functional parts Technical and

Financial headed by Members. Under each member there are

different divisions headed by DGs like Coordination, Wireless,

Wireline, Commercial Affairs, Finance, Enforcement, Law &

Regulations, Economic Affairs and Industry Development. The

Divisions are further categorized into Directorates headed by

Directors.

One of the best project and program of PTA is that of Rabta Ghar or

Telecenter to enhance rural telephony.

The Pakistan Telecommunication Authority (PTA) launched a

telecentre project called Rabta Ghar in rural areas across Pakistan in

January 2008. Under the first phase of the scheme, PTA along with

other telecom operators established 400 telecentres for which

equipment worth PKR 50,000 each was provided free of cost. The

telecom operators sponsoring Rabta Ghar include PTCL (100),

Mobilink (100), Ufone (50), Instaphone (15), Intel (10), Worldcall

(payphones in all Rabta Markaz) and PTA (125) bringing the total to

400. A Rabta Ghar (telecentre) is a small business set-up that

provides PCO, internet, fax, printing and scanning services to small

communities. These telecentres were provided to those individuals

who are unemployed with at least intermediate qualification and have

a shop or room of minimum 1012 ft. Individuals from villages/union

councils were considered for Rabta Ghar where the population is

4,000 to 10,000 and no public telephone or net cafe facility in the

radius of 5 km is available. PTA has also arranged free delivery,

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installation and training of the Rabta Ghar equipment on the

premises of the selected individuals by Intel through its genuine Intel

dealers (GIDs).

The development of rural communication is a multi faceted issue and

PTA realizing its importance is mobilizing all the relevant resources for

increasing access of telecom services in rural areas. Rabta Ghar

(Telecentres) are the most suitable strategy for bridging the digital

divide; therefore PTA has taken the initiative of promoting awareness

and also facilitating the establishment of Telecentres and PCOs.

Telecentre is a small establishment providing telephone, fax and

Internet services to a community. This will not only provide basic

Telecom services in rural areas but will also create employment

opportunities.

PTA launched the Rural Telephony Project across Pakistan. The main

objective of the project is the establishment of Telecentres across

Pakistan. The project comprises of the following two main

components:

Rabta Ghar through PTA & Telecom Companies Funds

Rabta Ghar through Micro Credit Loans

The Process of Audit:

The project of Rabta Ghar was audited by audit team of the following

members:-

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1. Mr.Shahid Javaid, Assistant Director

2. Mr.Gul Hassan, Assistant Director

3. Mr.Umar Farooq, Assistant

Financials

Rabta Ghar was a project of Rs. 30,00,000 under which a total of 400

Telecenter were installed.

Process

Following process of audit.

1. Committee formulated of the above mentioned offices.

2. Files of all the telecentres have been scrutinized according tothe prescribed rules.

3. The administration and management of the revolvers has also

been analyzed.

4. Committee prepared its initial report and sent it to finance and

enforcement divisions of PTA for analysis and vetting.

5. After vetting the audit report has been prepared and

submitted to Chairman PTA.

Observations:

Following were the observations of the team.

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1. 14 telecentres are either not installed or made dead after

installation.

2. An amount of RS. 400,000 can not reconciliated

3. Amount allocated for checking and survey of the telecentres

has no valid records.

4. Some machines are left, after the completion, whose cost can

not be recon ciliated.

Data collection methods

I personally visited the office of PTA HQ, Islamabad, and met Mr.

Salman Baig, Deputy Director Rural Cell who gave me all the details.

SWOT analysis

Strengths

Efficient Employees looking into the Audit Process.

All facilities provided for Audit.

High funds allocated for Audit.

Weaknesses

Vague records.

No cooperation from the owners of telecenters.

Data was computerized which could not be validated by old

system.

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Opportunities

Facilitation for future Audit.

Helped recover the wasted money.

Helped in quality management of new such projects.

Threats

Telecenter owners not well educated who hindered the Audit

process.

Low interest of few stakeholders in Audit process.

Some corrupt contractors made problems for audit.

Conclusions

The strategy being used in audit of this project was extremely suitable

to its objectives.

Each Rabta Ghar is being equipped with a PC, one Wireless PCO, One

Internet enabled Wireless set, Printer, scanner, copier and fax (4 in 1

machine) was checked as per audit rules. In addition to that each

Rabta Ghar owner is being provided with a comprehensive training

from the GID and the owner is also being provided a training manualand selflearning CD for future reference. Apart from above, A

Universal Service Fund (USF) has also been created to bring the focus

of telecom operators towards rural population, which remained

unnerved. Up till now, USF has awarded contracts to provide services

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in Malakand, Sukkur, DG Khan, Pishin, Mansehra and Dadu while

several projects are in pipeline It is expected that over 5 million

population of these remote areas will get benefit out of these projects.

USF signed Contract of Pilot project on October 04, 2007 with Telenor

that aims to provide telecom related services in Malakand Division. A

subsidy of Rs. 310 Million is being provided to Telenor for this project.

Telenor will install a total of 175 cell sites in Malakand. A subsidy of

Rs.112 Million is being provided to Mobilink for the provision of

telecom services in Sukhar which covers 25% od the province of Sind.

Warid Telecom under USF will get a subsidy of Rs. 91 Million to

provide services to the mass population in un-served areas of Dera

Ghazi Khan division. PTCL will provide basic telephony and data

services to the population in the yet un-served areas of Baluchistan

districts of Pishin, Killa Abdullah and Quetta and a subsidy of Rs. 175

Million is being provided to PTCL for this project. PTCL will get another

subsidy of Rs. 300 million to provide basic telecom services in

Mansehra and a subsidy of Rs. 250 million for provision of telecom

services in Dadu under USF facility. USF has planned to extend the

Fibre Optic connectivity to the un-served TEHSIL HQs in Pakistan for

meeting the growing requirements of Voice, Data and Video in these

areas.

Recommendations

I shall submit the following recommendation for this project:

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Introduction of Private Auditors to the Project.

Media campaigns to enhance awareness among people should

be launched.

Number of auditors may be allocated to each area according to

its rural population and the work done there.

project management 569

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