The growing concerns of committing fraud on capital projects have led many public and private sector organizations to increase their internal audit team’s involvement when it comes to delivering their capital project investments. Those organizations understand the critical role of internal audit in providing an independent assurance that the organization’s risk management, governance, and internal control processes are operating effectively on their projects. They need the internal audit to provide an unbiased and objective view when it comes to monitoring, evaluating, and reporting their projects health and performance status.
For the internal audit to be comprehensive, complete, and of value, 30 audit objectives need to be performed during the project life cycle stages. Those objectives will cover project management categories related to governance, procurement, reporting, financial, risk, communication, schedule, quality, and closeout. Using a reliable project management information system (PMIS) like PMWeb that is explicitly designed to manage capital projects becomes a must and not a choice to achieve those objectives. The internal audit team needs a PMIS solution to ensure the formal implementation of project management processes to capture, store, analyze and visualize the every-day project’s data in a traditional, organized and effective format. This will provide the Internal Audit Team with the needed reports to monitor projects’ compliance. The Internal Audit Team can drill down to the data source whenever this is needed.
- Deliverables assigned to each project stage gate are formally submitted, reviewed and approved by the project owner
PMWeb’s out-of-the-box Stage-Gate module allows the organization to define their project life cycle stages and deliverables for each step. The stage-gate will include details on the GateKeeper, the duration of the stage, the project schedule activity related to the specific stage-gate, the planned and actual dates for completing the stage gate, and other general details. For the deliverables, the stage-gate will also include details on the deliverable name, responsibility, approval status, link to the project schedule, among many others. Of course, PMWeb allows adding new fields that an organization might require for the stage gates.
- Qualified and registered consultants, contractors and suppliers are invited to bid and/or get awarded project contracts
PMWeb’s out-of-the-box prequalification module will enable the organization to identify the different requirements that each consultant, contractor, and supplier needs to provide to be reviewed and decide if they can be approved to bid on the organization’s projects. The module comes ready with most of the required queries to qualify a company, such as company name, address details, and insurance details. Further, custom categories can be created to capture additional information specific to how the organization qualifies consultants, contractors, and suppliers. Also, PMWeb custom form builder can be used to create a customized prequalification document to be completed online by Consultants and Contractors.
- Consultants, contractors and suppliers’ compliance as it relates to contract, safety, environment, sustainability among others
There is a growing trend among internal auditors to create checklists aligned with ISO 9000 Quality management, ISO 14000 Environmental management, OHSAS 18001 Occupational Health and Safety Management, ISO 10006:2003 Quality management in projects to check project compliance with those standards on a periodical basis. PMWeb, a custom form builder, is used to create those checklists for which all items to be reviewed and fit can be added. A weight factor can also be added to each item in the checklist to give a compliance weighted score. This will enable the internal auditor to keep track of the compliance trend as well as compare the compliance of one project to another.
- Project controls are working as intended and red flags are triggered automatically
When every-day data is captured in PMWeb pre-defined document templates for the different project management processes, tabular and graphical reports can be designed to report on delayed transactions. Various color indicators can be assigned to the performance variances depending on the approved, alert, and critical range. The report can also be designed to filter out non-critical transactions to improve focusing on transactions that need immediate attention.
- Single version of the truth when it comes to reporting projects’ performance and status
One of the essential features of PMWeb is that it is a solution that provides a single platform to manage all pre-contract and post-contract project management processes. For each project management, there will be a form to capture all needed data as desired and set by the organization. PMWeb provides many of the forms used in engineering and construction management processes ready out-of-the-box. Also, PMWeb custom form builder allows creating additional forms that are not readily available in PMWeb. The captured data will become the basis for making tabular and graphical reports and project, program, and enterprise dashboards. All of those reports and dashboards will be using the same database to assure a single version of the truth regarding reporting projects’ performance and status. Those reports and dashboards’ layout and content are fully customizable to fulfill the organization’s own reporting needs using their branding colors and logos. The dashboards can be linked to external applications such as construction cameras to provide live streaming on the project’s status.
- Financial transparency as it relates to project budget, contingency usage, awarded contracts, change orders and invoices for completed works
PMWeb comes ready with all of the forms needed to capture projects’ cost details to ensure financial transparency. The out-of-the-box prepared to use modules include cost estimating, budget, budget adjustments, commitments, change orders, progress invoices, payments, cost worksheet, among many others. To ensure financial transparency, the first task is defining the cost breakdown structure (CBS) in the format that an organization wants to report their project’s financial status. PMWeb allows creating an unlimited number of cost levels to match the desired cost granularity.
- No non-authorized transfer of budget funds from one cost center to another
All budget transfers must be done using the PMWeb Budget Request form. Access to this form will be limited to those authorized by the organization to do budget transfers. This form’s approval needs to be linked to a workflow to ensure no non-authorized transfer of budget funds. PMWeb visual workflow allows the user to map the different steps needs to submit review share and approve the budget transfer. PMWeb visual workflow also adding conditions and branches to map the different approval levels needed to support a budget transfer. Those could be relevant to the transfer amount, reason among others. Those can be conditions that can be set to “All” to happen or “ANY” could happen.
- Contingency spending is authorized by the project owner
Contingency spending is similar to PMWeb budget transfers, but the transactions will be limited to the contingency cost breakdown structure (CBS) level. Conditional workflows will be created to ensure that the project owner authorizes contingency spending. PMWeb will report on the usage of the project cost contingency and schedule buffer.
- Fair and proper commercial bid analysis for technically qualified bidders
PMWeb procurement module will be used to do the commercial bid analysis where the price from each bidder will be displayed against the approved project cost estimate. A workflow will be added to this module to ensure fair and proper commercial bid analysis for technically qualified bidders had been done.
- No erroneous or unsupported change orders
All change orders will be captured in the PMWeb change management module. The PMWeb change order form will have the data that must be provided for every single change order. Additional custom fields can be added to meet the organization’s requirements. Each change order should have all supportive documents attached to it. Also, all other relevant PMWeb records need to be linked to the change order. The workflow will ensure that each change order is submitted, reviewed, and approved by the designated team members. PMWeb report writer can design any output report needed to report on change orders to ensure that there erroneous or unsupported change orders.
- Reported progress invoice is aligned with schedule reported performance
PMWeb scheduling module allows developing and maintaining the project schedule and imports the project schedule from Oracle Primavera P6 or MS Project. This will enable assigning the relevant project schedule activity to the bill of quantity (schedule of values) line item. This will ensure that the reported progress invoice is aligned with the schedule reported performance.
- Reported progress invoice is aligned with the earned budget
PMWeb Forecast Module will ensure that the reported progress invoice (or Actual Cost) is aligned with the earned budget (or Earned Value). PMWeb report writer allows the organization to create a tabular and graphical report to display the earned value analysis status of the selected project.
- Payments made against approved progress invoices to consultants and contractors are used to cover expenses incurred on the same project and were not used for other projects
One of the recommended practices is to have a checklist as an integral part of each progress invoice. The checklist will include entries to be completed by the project approved subcontractors and suppliers to confirm that they have received the payment for the last approved progress invoice. This checklist will be done using the “Checklist” tab in PMWeb, which can be added to most PMWeb forms.
- Proper value engineering workshops were conducted as planned and associated cost savings are reflected in the approved project budget
PMWeb, a custom form builder, will design the forms needed to enforce value engineering’s formal processes. Those will include ideas generation, proposals advantages, and disadvantages and value engineering proposals. In addition, PMWeb default modules such as cost estimates and meeting minutes will support the other processes needed for value engineering. The information captured in those forms will become the basis for monitoring, evaluating, and reporting the value engineering implementation.
- Risk register and all approved risk response actions are implemented
PMWeb provides the option of using the default risk register module or use the custom form builder to create the forms needed to implement the risk management process. The customs form can be designed to capture the risk particulars, assessment, and approved response action for each risk identified. Like other PMWeb modules, all supportive documents can be attached to the form, and relevant documents are linked. The workflow will be used to capture the steps for submitting the reviewing, reviewing and assessing the risk, and approving the risk response. The form field security level can limit access to each field based on the approved permission list. This data will become the basis for developing and maintain the project risk register. The register will provide details of all risks, assessments, and approved risk response actions. This will be a real-time report showing the latest status of all project risks.
- Early Warning Notification (EWN) process for all events that could impact the project
The Early Warning Notification (EWN) is a process that requires all project stakeholders to formally notify each other of an early warning of certain types of events that could. If they happen to increase the project price, delay the completion date, or impair the work’s performance in use. For some, the EWN is considered a proactive project risk management process. PMWeb, a custom form builder, will create the EWN form to capture all EWNs. Similar to other PMWeb modules, EWN allows attaching all supportive documents. The workflow option allows creating multiple workflow variations depending on the attributes assigned to the EWN to ensure that it gets transmitted to the right project team members for review and approval without wasting time in trying to guess who should be involved.
- Issues log and all approved resolutions are implemented
The PMWeb Custom Form Builder will be used to create the issues form to capture who has raised the issue, proposed resolution, and if implementing the solution has solved the problem. PMWeb report write will be used to create the issues log that will display the needed issue fields and display color indicators to alert the criticality of the problems. This will help the organization to ensure a real-time updated issues’ log that will highlight the status of all proposed issues resolution.
- No excessive or delayed closure of RFIs that could result in change orders
PMWeb default Request for Information (RFI) module will capture all details of project RFIs. This will include the query, proposed solution, and answer. It also provides details of the RFI could impact the project scope, cost and schedule, and the project schedule activity details. The RFI module allows attaching documents, linking records, and having a workflow to submit, review and approve. PMWeb report writer will be used to prepare the RFI log and other tabular and graphical reports that could be needed to report on the status of RFIs to ensure that there is no excessive or delayed closure of RFIs that could result in change orders.
- Meeting Minutes are documented and being managed in an effective method with no long pending meeting business items
PMWeb meeting minutes module allows capturing all types of project meetings, including progress reviews, safety, and health, quality control, pre-bid and award, kick-off, value engineering, stage gate reviews, among many others. PMWeb report writer allows creating customized tabular and graphical reports to provide the needed information to ensure that Meeting Minutes are being managed in an effective method with no long pending meeting business items.
- Complete project documentation of all drawings, specifications, communications, emails among many others
PMWeb, a document management module, allows the organization to map their exact filing system structure into PMWeb. It can create folders and subfolders to upload project documents such as drawings, specifications, communication, pictures, and videos. For each uploaded file, attributes can be added to define the forms better and expedite the file search process. Like other document management systems, PMWeb allows document versions, download documents, and checkout/check-in documents. Documents can be viewed online as well as redline to add comments and shapes.
- Latest versions of all project contract documents are documented and used by all project stakeholders
It is common in every construction project that drawings get revised and updated due to changes and actual site conditions. It is essential to maintain a register of all those documents and the revisions. PMWeb drawing register allows adding all project contract documents, including drawings, specifications, bill of quantity, and contract agreement. It also allows keeping the details of all revisions for each document. The original document can be attached to the record entry.
- Claims log is updated and have all supportive documents to defend the organization
Similar to all other custom forms detailed earlier for Risk, Early Warning Notification, Issues, among others, PMWeb custom form builder will be used to create a form to capture all claims’ particulars. The form will include details on the contract clauses that the request relates to, a description of the claim, and the claims’ quantification. All supportive documents will be attached to the claim, and all relevant records will be linked to the form.
- Formal review and approval of the project’s baseline schedule to ensure compliance with the contract requirements
There are several best practices to review and analyze the project baseline schedule. It is recommended to create a form that will capture the details of the schedule review and analysis. The PMWeb custom form builder will be used to generate this form, for which it will itemize all items that the project schedule needs to comply with. The checklist will reflect the organization’s knowledge and experience in reviewing project schedules. For each checklist item, it is recommended to create a text note field to add the reviewer’s comments. When the form is completed, the organization needs to attach the detailed project schedule report saved in PDF file format to this review form. More than project schedule report to detail the critical path, resources histogram, successor and predecessor report, among others. The workflow for submitting, reviewing, and approve the project schedule submission should be part of this form. This process will ensure that there will be a formal review and approval process of the project’s baseline schedule to ensure compliance with the contract requirements.
- No non-authorized change in project schedule activities duration, relationships, constraints among others
It is highly recommended to use the same processes to review and approve the project baseline schedule to a formal review and approve all schedule revisions. Also, the PMWeb scheduling module allows creating reports to report on changes between the imported schedule updates.
- Proper documentation and analysis of all-time extensions requested by contractors and consultants
Delay analysis requires capturing complete details of the relevant events that caused the delay. It requires analyzing if the delay is excusable or not and if excusable does it allow for compensation or not. The analysis should also determine if the delay is a concurrent delay or not. Regardless of the analysis level of detail, it is recommended to create a custom form in PMWeb to capture the complete details of this delay. All supportive documents need to be attached to the delay form. What is more important is to capture the PMWeb records that are related to those delayed events. Those could include PMWeb records such as daily reports, meeting minutes, RFI, correspondence, emails, among many others. A workflow can be added to the form to formalize the submit, review and approval process.
- Specified project material is not substituted with lower quality material
When a contractor claims that he cannot submit the originally specified material in the original contract, it is recommended to have a Specification Comparison Form completed by the contractor to explain the particulars of the substitute material. This form will be created in PMWeb using the Custom Form Builder. All details of the initially specified material and the substitute needs to be attached to this form. The workflow will detail the steps for submitting, reviewing, and approving this request.
- Credit for substituted material with lower cost is paid back to the project owner
Usually, the contractor will provide credit for the substituted material, which will require issuing an adverse change order. The PMWeb change order module will manage this process and link the change order to the Specification Comparison Form to provide the needed reference for this change order. The change order will use the agreed cost adjustments that are part of the Request for Alternative or Substitution form.
- Snag lists/punch lists are completed and approved by the project consultant
PMWeb Snag List module will be used to prepare and ensure that the contractor had rectified all items included in the snag list. There is no limit on the number of snags that can be created. Still, they need to be explicit detailing the exact rectification required, location of the work PMWeb allows creating a structured location breakdown structure to drag and drop the location details into the snag list register. The register will also include the date the rectification was requested and completed as well as the estimated cost of this rectification work which will be deducted from the contractor’s contract value should he fail to meet the rectification works.
- Proper and formal handover of completed works to the intended end users
PMWeb custom form builder and checklists can be used to create different handover documents for the project scope of work as the items to be checked for each work scope could vary. In addition, the team members who could be involved in reviewing and approving the handover document could differ depending on the scope of work. Those could include Hand Over of Close-Out Items for as-built Drawings, Warranties, Master keys, Salvaged Materials, Signed Defects List, Capital Items, Signed Snag List, Spare Parts, Special Tools, Testing & Commissioning, Training Manuals, Equipment, Completion Certificate, Substantial Acceptance, and Final Acceptance. Similar to all other modules in PMWeb, documents, pictures, videos, specifications, among others, can be attached to the handover form.
- Lessons learned are captured to improve the organization’s knowledge management
The PMWeb custom form builder will be used to develop the lessons learned template where it will be used to capture the detailed particulars of each lesson learned. Like all other custom forms, the lessons learned will attach all documents related to the lessons learned and linked to other PMWeb records relevant to the lessons learned. The workflow will be used to submit, review and approve the lessons learned formally.
