PROJECT COST CONTROL PROCEDURE

Purpose Overview The purpose of this procedure is to specify the requirements for cost control of CAE projects. Project cost control is a key responsibility of the Project Coordinator during the Development phase of each project and at an overview level for all projects from the Planning phase to Closeout. Project Managers are primarily responsible for cost control of their projects from the Planning phase. Cost control includes: Establishing a soundly based and well detailed budget initially for the project Business Case (Development phase) and updated for the Project Plan (Planning phase) Processing of project accounts Monitoring cost performance against budget, forecasting, identifying variances and taking corrective action as required Reporting project cost status

Inputs

Brief Project Scope Statement Project Process Manual Cost Control Spreadsheet Template? Project Progressing Reporting Procedure Project Scope Management Procedure Project Cost Status Reports

References

Outputs Procedure # 1

Action Prepare a project cost estimate during the project Development phase for the Business Case. This includes: Developing a hierarchical Work Breakdown Structure for the project to Account level as the basis for estimating and ongoing recording of actuals and forecasts. Estimating project income. Note that project sponsorship income is net of sponsor payments and the CAE overhead charge to the project.

Responsibility Project Coordinator

DRAFT 1, 20/6/04

Action Gathering expenditure estimate information by Account (mostly hours per task and rates for people engaged on the project plus their expenses) and developing expenditure estimate accordingly Preparing proposed project budget based upon the estimate.

Responsibility

When the Business Case is approved setup the project in the CAE accounting system so that financial transactions can be processed and cost reports prepared for the project. Note this includes allocating a 5 character Activity Centre number in the accounting system as the project identifier. Setup a cost control system for the project based on the WBS, typically using a spreadsheet template? to: Record budget by Account Record actuals by Account by month Record work in progress (WIP) being value of work completed but not yet entered as an actual in the accounting system Maintain and enter current forecast cost by Account, including tracking reasons for forecast changes Report cost status by Account Report project expenditure forecast by month Report summary project cost status as required for input for the CAE Executive Committee Report link to Project Progress Reporting Procedure

Administration Manager

Project Manager

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Update project cost estimate from Business Case (refer Action #1) during the Planning phase as input to the Project Plan. Receive invoices for project services from suppliers, verify and recommend to CAE Executive Director for payment. Review and approve invoices for payment. Manage accounts payable and receivable for all projects including preparation, sending and follow up of CAE invoices.

Project Manager Project Manager Executive Director Administration Manager

Provide monthly Transaction Analysis Reports (TAR) from the Administration accounting system itemizing all project actuals to each Project Manager Manager as at the end of each month by the 3rd? working day of the following month Project Manager 2

Monitor project cost variances on an ongoing basis and advise the CAE Executive of any substantial new variances of forecast cost by the 2nd working day of each month. DRAFT 1, 20/6/04

Action the CAE Executive of any substantial new variances of forecast cost by the 2nd working day of each month. Review and update actuals, WIP and forecasts by Account on a monthly cycle when the TAR is received (i.e. TAR provides the actuals transaction detail) using the project cost control system (refer Action #3). This includes incorporating any approved scope changes into the budget and forecast in accordance with the Scope Management Procedure link to scope management procedure. Monitor and evaluate cost performance against budget, identify variances and take corrective action as required Report updated month end project cost status to the Project Coordinator by the 5th working day of the following month. It is noted that the September project cost forecasts are particularly important for CAE due to the annual budget cycle. Expedite submission of monthly cost status reports from Project Managers, review submitted reports and follow up with Project Managers as necessary to ensure acceptable quality of information. Review reports with Project Champions, Programme Managers and Executive Director and take action as necessary. When project is complete ensure that all outstanding financial transactions have been processed and arrange for project closure in the accounting system. Prepare final project cost status report for inclusion in the Project Closeout report. This includes tabulated Business Case budget, Project Plan budget and final actual cost by Account plus commentary on variances by Account with lessons learned for possible application to future projects.

Responsibility Manager Project Manager

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Project Manager

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Project Coordinator

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Administration Manager Project Manager/ Coordinator

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DRAFT 1, 20/6/04