Financial Control and Reporting Flashcards

1
Q

Why is controlling and reporting costs of ‘great importance’ to the success of a project?

A

Promotes financial transparency.
Aids budget management.
Identifies risks and variances.
Facilitates decision-making.
Ensures project delivery within budget and schedule.

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2
Q

What are PSUMs and Risk Allowances - what is the difference?

A

PSUMs: Cover undefined work/materials.
Risk allowances: For unforeseen events.
PSUMs cover specific items, while risk allowances cover unforeseen events.

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3
Q

Under what circumstances can a contractor claim for L&E?

A

When a Relevant Matter is the cause of claim.

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4
Q

What is the importance of monthly cost reports?

A

Stakeholders receive current expenditure data.
Enables timely decision-making.
Monitors budget performance.
Identifies variances.
Implements corrective measures for project success.

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5
Q

Why might highlighting changes from previous cost reports be important? (Hubs)

A

Highlights cost changes and reasons.
Provides client confidence in cost adjustments.
Explains trajectory changes.
Aids in trajectory control strategies.

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6
Q

How was the L&E claim ‘factored into’ the final account sum? (BM)

A

EoT approved: 5-week extension.
Prolongation basis of claim.
Time related preliminary item rates used.
Weekly cost derived: £1.8k.
Total: Circa £9.5k.
Apply Hudson formula OH% of 5% to the total of the additional prelim costs.
No other request for claims were made however they could have applied for others as well ie. Cost of claim; loss of profit, thickening preliminaries, etc.

Although stating to the contractor and the client that actual costs can be used to determine costs, they both agreed to accept this figure.

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7
Q

How did you advise during these regular meetings? (Hubs)

A

Presented AFA document.
Highlights:
Increase from previous catchup.
Budget comparison.
Remaining contingency.
Large item costs.
Anticipated impacts.
Decision on variations.
Prioritization for budget adherence.

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8
Q

Did you help the client recognise the ‘priorities’? (Hubs)

A

Yes:
Works exceeding budget evident.
Decision:
Prioritize residential communal areas.
Omit management areas.
Patch repairs in corridors.

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9
Q

How might the contractor take advantage? (MTC)

A

Error in variation rates possible.
AFA accuracy compromised.
Misleading impression of lower costs.
Client risk paying more.

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