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8/3/2019 Project Management 569
1/25
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.
Recommended