Module 13
Spring 2010 closure
Compiled by Greg Kinney
This is a compilation of “muddiest item” questions, and my answers, for this module.
QUESTION:
             This wasn’t actually ‘muddy’ but this edition of the text appears to have been published in 2006. Having worked in the field for the last 3 years, I’ve noted that over the majority of the last decade, Health and Safety (HSE) have been very important aspects of the work done and work area, and companies put a lot of effort into maintaining the health and safety of their employees. In fact, all the major oil-field companies maintain twice annual or more HSE audits to make sure they are doing everything possible to maintain a high standard of HSE. I was wondering if there is a reason why the text doesn’t seem to discuss this even though I would assume that it would be a very important aspect with regards to delays in time and resources to any large scale project. 
ANSWER:
I don’t think there is as high an emphasis on HSE outside the oil industry as there is inside.  In part, this is because of the high visibility of the industry and the high consequences that may be involved in an incident.  I believe it also to be an artifact of whistleblower-protection regulations applicable to the oil industry, which aren’t generally applicable to all industries.

There were a number of other questions about audits this week from students.  One of the points that I made was that there are many reasons why audits might be conducted.  These range from audits for cause if mismanagement is suspected to sampling audits to determine performance of projects (or aspects of operations and maintenance) against some benchmarks.  HSE audits may take benchmarks, such as best management practices (BMPs) as the basis for evaluation; more often, in my experience, they directly assess whether regulations are or aren’t complied with.
QUESTION:
I was mostly surprised by my own Department’s lack of formal audits.  At DOT, in Design, the only formal system of checks and balances is a review system.  Different functional groups are given a preliminary set of plans, and they provide comments on what should or should not be changed in a project. 

On the other hand, in Construction, we went through a mid-project audit, and a final audit – on every project.  It seems like auditing the Design portion of the project might provide a cost effective means of improving quality and conformance to design standards, guidelines, and quantity calculations. 

Obviously, designing a project is less costly than constructing it.  Is the value of a project, or project’s phase, the significant determining factor in deciding to audit?  
ANSWER:
I think there are a number of reasons one might audit.  There are audits for cause, when you need to verify whether the project is performing to the scope, schedule, budget and quality that it is supposed to.  There are also quality audits, whereby a company or department can choose a cross section of projects to survey for performance, with an idea of sampling overall performance.  Finally, an organization could choose to audit large projects on a routine basis.  So there are many reasons other than size to audit.
QUESTION:
The most confusing item was from Table 13-1 and the ranking of critical success factors for projects. Communication has been emphasized as a crucial skill for a project manager, but finding communication ranked next to last in the success factor ratings seems to contradict the information from Chapter 3 and other courses I have taken. Is the Pinto and Slevin survey ranking reflective of the fact that communication is less crucial for project success than for project manager success?
ANSWER:
I can’t fully explain Pinto and Slevin’s survey, but I would note that it is a structured result from a survey of practitioners.  It doesn’t reflect more rigorous academic analysis, and the results are probably an artifact of the way in which Pinto and Slevin structured their categories.  I suspect that to be the case in fact.  I believe that the categories listed (project mission, top-management support, etc.) were probably generated by them, and then they had the PMs surveyed force-rank them.

Whether they did or not, you might notice that there is some slop between categories.  Although “communication” as a category is ranked #9, that might be because some of the more crucial communication elements were siphoned off already.  For example, under “client consultation” is the description “communication, consultation and active listening.”  Project mission articulation (the #1 factor, which I agree with, by the way) is successful only if excellent communication went into it.  Communication permeates most other categories, in fact, leaving the impression that “communication” as a separate factor is just the miscellaneous stuff that’s left over.

QUESTION:
My question is, “Is postcontrol the same process with project audit/evaluation?” If not same, I couldn’t see many differences between them. 
ANSWER:
The objectives are very similar. However, it is important to understand that the “postcontrol” document is essentially the story that the project organization puts out after the fact.  It’s what they tell everyone else about themselves.  That kind of history is valuable, because nobody is closer than the direct participants.  But it’s not an audit, because auditors are third party folks who are supposed to be neutral and evaluating the project by objective criteria.  Project participants must be assumed to have a bias; auditors aren’t supposed to.

QUESTION:
The least clear thing I learned from this module was how common it is for companies to perform audits on themselves.  In my experience, the most common project audits are financial in nature and are imposed by a funding agency on the recipient(s).  It seems much more rare that a company would perform and internal audit on themselves unless they were a large corporation with many offices; and for instance, headquarters would send auditors to each office to promote conformity.  Can you relate some of your experience to me of the most commonly seen types of audits?
ANSWER:
Financial audits are the most straightforward type.  In general, either you are handling your bookkeeping and general accountancy in conformance with generally accepted accounting principles, or you are not.   (I might note that where you get into arcane types of financial management, it becomes more difficult; it got really ridiculous in the case of Enron, where the accounting firm Arthur Anderson profitably colluded in a trading shell game designed to make the company look profitable, and build stock value, while maintaining as much opaqueness as possible to avoid seeing reality.  It all worked until it came crashing down.)
Project audits are one example of audits where there are fewer black-and-white criteria.
Having been through a few of them, I can relate to the fact that project audits often are more an art than a science.  First you have to select what to measure, and clever people can engineer positive or negative results  of the audit just by that selection.  Next you have to decide how to apply audit “grading” – let’s call it pass or fail – based on those criteria.  Often it’s not black or white.  As you work through projects, there’s a “fog of war” issue, where you are very busy working on lots and lots of issues, but how does that translate into a percent complete status, etc.