Project Finance (Level 1/2/3)

Question 1

Different techniques of cost control / reporting?

Answer 1

Cost Control:
- Budgeting and Cost Management
- Short Interval Control
- Risk and Change Management
Reporting:
- CVR’s
- FTC’s
- Cashflow

Question 2

What is the difference between cost control and cost reporting?

Answer 2

Cost control
Monitoring, managing, and regulating project costs to ensure that they remain within budgeted limits and align with project objectives.

Cost reporting
Communication of project cost-related information to relevant stakeholders in a clear, accurate, and timely manner.

Question 3

As a QS what should you be doing for your client?

Answer 3

• Cost planning and budgeting
• Value engineering
• Procurement advice
• Tender documentation and contract administration
• Cost control and reporting
• Claims management

Question 4

How would the number of changes affect the frequency of reporting?

Answer 4

If there was frequent changes then you could look to introduce more frequent reporting, bi-weekly

Question 5

How do you compile a risk register?

Answer 5

Identify project risks
Categorise the risks
Assess impact and likelihood
Assign risk owner
Develop mitigation strategies
Monitor and review

Question 6

Key Components of a CVR?

Answer 6

Executive Summary
CTD Analysis
EVA Analysis
FTC
Risk & Opportunity
Approved CE’s / Pending CE’s

Question 7

Purpose / Benefit of a CVR?

Answer 7

Manage Financial position of the project
Inform Senior Management on the Financial position of the project
Allow Senior Management to advise on any risk reduction matters to improve/mitigate financial position

Question 8

How to create a cashflow?

Answer 8

I would use the construction programme and tender breakdown to populate the cashflow
It would be split into cost headings: Staff, Plant, Materials, Subcontracts, Design, Labour
I would forecast the costs for the construction activity inline with the programme
This would determine my outgoings
Then our contracts are Option C or E, therefore cost, plus fee back the period prior

Question 9

Benefit of a cashflow?

Answer 9

Allows the business / client to understand the financial requirements over the project duration
Allows for budgeting, can understand time when there will be surplus cash and areas of cash shortfalls
Enables companies to grow more predictably

Question 10

What does CEMAR stand for?

Answer 10

Contract Event Management and Reporting

Question 11

Difference between contingency and risk?

Answer 11

Contingency covers costs that are unknown unknowns
Risk covers known unknowns

Question 12

What is a provisional sum?

Answer 12

Figure that covers works where the exact scope and requirements are undefined

Question 13

Analysis period of Whole life cost?

Answer 13

UU have an Asset life table within the EWI, therefore it is in accordance with this:
M&E Plant - 23 years
Civil Structures - 60 years

Question 14

Prime Cost v Provisional Sum?

Answer 14

Prime Cost - Allowance made for supplying an item, doesn’t include related works

Provisional Sum - Allowance made for an item of work that cannot be priced at contract award as the extent is undefined

Question 15

Flying Start Project - How do you compile the forecast cost to complete? How do you assure yourself that it is correct?

Answer 15

• Ensure CTD data is true and accurate
• Forecast remaining costs inline with programme
• Ensure risks are accounted for

Question 16

Flying Start Project - What other methods could you use to develop a cashflow forecast?

Answer 16

S Curve - Predicts cumulative work or costs over the project’s lifespan and reflects the typical pace at which projects advance: slow at the beginning, accelerating in the middle, and tapering off toward the end

Question 17

Flying Start Project - As well as reporting risk on the project, how do you manage risk?

Answer 17

Monthly risk review meetings
Discuss current risks and new risks.
We review the current risks and assess their status and whether any additional mitigation is to be implemented.
For new risks we will assess the likelihood and potential impact, the mitigation techniques and further allocate contingency.

One example, we mitigated the risk of excavations close to residential properties by changing to auger boring

Question 18

Flying Start Project - How did you manage expected changes within FTC, how did you ensure you were aware of them?

Answer 18

Expected changes within the FTC were input into the sheet each month, with clear commentary surrounding why the change had occurred and if it was covered in the forecast (usually a risk item).

I ensure that I’m aware of all changes to the project by having clear communication and good relationships with the rest of the project team. I can keep up to date with any potential changes that I will have to explain to the client.

Question 19

Verulam Road Project - What did you do with regards to compiling and managing the risk register?

Answer 19

Monthly risk review meetings
Discuss current risks and new risks.
We review the current risks and assess their status and whether any additional mitigation is to be implemented.
For new risks we will assess the likelihood and potential impact, the mitigation techniques and further allocate contingency.

One example, we mitigated the risk of excavations close to residential properties by changing to auger boring

Question 20

Types of cash flow forecast?

Answer 20

Organisational - cash flow of a company
Project - cash flow of a particular project