Capital Project Monitoring... Commentary on the GFOA Best Practices
Part 4: Regularly Monitoring Capital Projects' Financials and Project Activity Information
Once legal, fiduciary, and informational requirements have been established and information systems are in place, finance officials should monitor capital project activity on a regular basis. At a minimum, such monitoring should include:
- Confirmation that a project plan exists that identifies all required resources and milestone work products and assurance that the project plan is being followed.
- Confirmation that the project's scope has been clearly identified upon completion of final design and that the project stays within scope or that changes to scope have been made consistent with an established process.
- A review of project-related financial transactions to support budget review, auditing and asset management.
- A review of expenditures, both in relation to the current budget, and over the entire project life.
- Review of encumbrances and estimates of planned expenditure activity.
- Confirmation of continued availability and appropriateness of revenue sources identified in the capital budget.
- Confirmation of the adequacy of cash flow in relation to project requirements.
- Review of the timing of investment maturities compared to planned project disbursements.
- Review of sources and project uses of bond proceeds and grants.
- Results compared to established measures of performance.
GFOA Recommended Practice: Capital Project Monitoring and Reporting (2007) (CEDCP) October 19, 2007
This article is the fourth in a seven part series offering our commentary on each of the items in the GFOA recommended practices for Capital Project Monitoring. Our pervious commentary focused on data elements and tools, we now turn to refinement of the monitoring process. We see the key questions as: how much monitoring is necessary and is that monitoring going to enable continuous improvement relative to project delivery.
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