Project Financial Control And Reporting Flashcards
You mentioned you are responsible for cost reporting to the client. Please talk me through how you would produce a cost report and how this would be presented to the client.
Set up meeting to go through key client objectives. This would include:
- benefits
- timescales
- packages to use
- cashflow
- arrangement of changes
How do you produce the cashflows on your project and why is this helpful to the client… What do they use it for?
I use the programme and the cost plan to determine each packages value and time taken. I then input this to software to establish the cashflow amounts.
How did you calculate loss and expense on Tolworth?
Relevant Matter has occured
Assess the heads of claims
What risks did you price on Tolworth and how did you price these?
Inert, Non Haz, Hazardous materials from breaking out the slabs
Phase 2 slabs
Japanese Knotweed
What is the purpose of cost reporting?
- To record all known costs which can be accurately valued
- To report all costs which are known and can be estimated at the date of the report
- To forecast costs as can reasonably be foreseen at the date of the report
- risk allowances necessary as can be reasonably foreseen at the date of the report.
How is Final outturn cost controlled by cost reporting?
Outturn cost is controlled by the recognition of cost changes incurred and planned implementation of future cost changes.
What are variable costs?
Provisional sums Risk Loss and expense Liquidated damages Variations Prime cost sums Re-measurable contracts Anticipated instructions Fluctuations
What is good cost reporting?
- Always accurately track cost and changes
- Communicate changes effectively as and when required
- Keep a rolling final account
- Good cost report document to keep client informed
- Good relationship with contractor
What is cost control?
The process of valuing and manging changes. To ensure the project is delivered at the right price.
Would you issue a final payment certificate?
You should never issue a final payment certificate as this would mean you cannot claim for latent defects.
When is the final account produced?
Contractor must submit information within 3 months of PC. If they do not, you will need to prepare this and give notice you will do it.
On your projects, why was it important that the contingency pot was only used for risks which there was no provision for?
This is because these risks already have a provision in the contract and using the contingency would not be necessary. All costs which can be foreseen should have a provision within the contract.
What are the contents of a monthly cost report?
Lump sum contracts • contract sum • adjustment of variable costs • adjustment of variations • adjustment of fluctuations • claims for loss and/or expense; and • adjustment of risk allowances.
Are there any costs you would exclude from a cost report?
If it is a construction cost report i would exclude professional fees, 3rd party costs, land costs, agency costs, finance cost and legal fees.
On the basis that most clients don’t want to read a whole report, what do you convey in the Executive Summary?
Budget, forecast cost, risk, approved changes, unapproved canges, provisional sums, cashflow
Would you include contractor claims in your cost report? What about loss and expense and LDs?
Yes these would be listed under the unapproved variations until they have been approved.
How have you controlled costs in the design stages of a project?
Change control and showed differences using precontract cost trackers.
Order of Cost Estimates
Cost Plans
What is the purpose of a cashflow? Who produces one and how?
For client:
- To monitor progress against agreed programme
- To be able to monitor loan payments and withdrawing money from funder
- To manage resources
For contractor:
- To monitor subcontractor’s progress against subcontractors
- To manage resources
What change control procedures have you implemented?
How did they work?
Agreement of CC procedure with client
EA raises ECR / Contractor notifies of change
EA requests quotation (to be submitted within 14 days)
Contractor submits cost
QS assess and agree
EA instructs
How do you deal with provisional sums in a cost report?
Provisional sums are recorded separately to other packages in terms of package value, purchase orders and spend to date.
If a client suggests there is an error in the Cost Report – how would you go about resolving the problem?
I would clarify what the error is with the client and then do an inspection of the error. If i find that the client is correct, I will apologize and rectify the error. I will also let the client know of my complaints handling procedure.
What is the general risk allowance method?
The balance of remaining risk allowance should be maintained throughout the remainder of the project.
How did you deal with contractor’s claims in your cost report?
These should be treated as unapproved changes until they have been assessed for scope and cost.
How would you prepare a final account?
- Check the contract procedures for final account including the timescales.
- Ensure to resolve all the variable costs (changes, loss and expense, liquidated damages, prime costs, dayworks, provisional sums).
- If there are any disputes which cant be resolved in any other way, the statutory obligation is to go to adjudication.
