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Managing conflict, implementation and post completion

Post-completion audit (PCA)

5.1 Definition

 'An objective independent assessment of the success of a capital
project in relation to a plan.'

5.2 Scope and purpose

 To identify causes of variances from budget and general lessons to be learned.

 Often carried out by small teams, typically consisting of an accountant and an
engineer who have had some involvement in the project.

 Not common to find PCA as the responsibility of internal audit.

5.3 Benefits of post-completion auditing

 It improves the quality of decision making by providing a mechanism whereby
past experience can be made readily available to decision makers.

 It encourages greater realism in project appraisal by providing a mechanism
whereby past inaccuracies in forecasts are made public.

 It provides a means of improving control mechanisms by formally highlighting
areas where weaknesses have caused problems.

 It enables speedy modification of under-performing/over-performing projects by
identifying the reasons for the under or over performance.

 It increases the frequency of project termination for ‘bad projects’.

 It highlights reasons for successful projects which may be important in
achieving greater benefits from future projects.

Illustrations and further practice

Now try TYU 5 to 7 in Chapter 14

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