I was recently asked to speak to the Institute of Internal Jamaica monthly chapter meetings on the topic Integrating Project Management Techniques for Internal Auditing. Given the leverage I had, I chose instead to speak on - In Pursuit of Perfection: Internal Auditors the Gatekeepers of Ethics in Jamaican Business.

1. In Pursuit of Perfection: Internal
Auditors the gatekeeper of
Business Ethics in Jamaica.
"Integrating Project Management Techniques for Internal
Auditing"
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2. AGENDA
• Background
• Management Dilemma and Solutions
• Roles, Function and Reporting
Relationship of an Internal Auditor
• Project Management Overview
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3. Definitions
• Business ethics are moral principles that
guide the way a business behaves. The
same principles that determine an
individual’s actions also apply to business.
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4. Monitoring Of Construction
Contracts
• During the 2012 calendar year, the Construction Contracts
Division of the Office of the Contractor General (OCG)
monitored the Pre and Post Contract stages of three hundred
and sixty seven (367) contracts. As such, there was a 10.5%
decrease in the number of works contracts which were
monitored for the year 2012, in comparison to the previous
year in which four hundred and ten (410) contracts were
monitored.
• It must be noted that the NCC, during the year, endorsed a
total of one hundred and forty eight (148) works contracts
which had an aggregate value of J$10,314,568,600.00, of
which fifty-two (52) were monitored by the Construction
Contracts Division. (Harrison, 2012)
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5. Monitoring Of Non-construction Contracts,
Licenses, Permits And
Concessions
• The Division monitored approximately six hundred (600)
opportunities/contracts during the calendar year 2012, in
comparison to six hundred and eighty-two (682) procurement
opportunities/contracts which were monitored in 2011. This
represents a twelve percent (12%) decrease in the number of
non-construction contracts and license which were monitored
over the corresponding period.
• Of the 600 opportunities/contracts which were monitored
during the year, four hundred and sixty three (463) represents
monitoring assignments which were carried forward from
2011. The remaining one hundred and thirty-seven (137) or
approximately twenty three percent (23%) represents new
monitoring assignments during 2012. (Harrison, 2012)
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6. Problem Set
• A company has been working on the development
of an advance product for the last three years at a
cost of $2 Million. Under the original plans, the
project should have been completed and the
payback (new revenues and/or cost savings) should
have started six months ago. So far, the delay has
run an anticipated additional cost of $500,000, and,
with no end in sight, management is getting edgy.
Should it terminate the project or budget additional
funds to continue work?
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7. Management Dilemma
Management Facts:
•Decision to continue supplying funds,
manpower and facilities or whether to kill the
project based on current status of project.
•No one has sufficient, reliable information
into what has been accomplished or what to
expect in the future
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8. Solutions
• Experience has shown that skills and
methodology used in financial auditing are
adaptable to the review and audit needs of
development projects and technical work.
• Assessment based on technical
competence alone often fail to further
furnish management with the data
necessary for decision making. (Ross, 1976)
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9. Definition of Internal Auditing
• According to Institute of Internal Auditors
(IIA) - "Internal auditing is an independent,
objective assurance and consulting activity
designed to add value and improve an
organization's operations. It helps an
organisation accomplish its objectives by
bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk
management, control, and governance
processes." (Deloit, 2014)
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10. Major roles and responsibilities
of internal audit function
• evaluates and provides reasonable assurance that risk
management, control, and governance systems are
functioning as intended and will enable the organization's
objectives and goals to be met
• reports risk management issues and internal controls
deficiencies identified directly to the audit committee and
provides recommendations for improving the
organization's operations, in terms of both efficient and
effective performance
• evaluates information security and associated risk
exposures. (Deloit, 2014).
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11. Major roles and responsibilities
of internal audit function (cont.)
• evaluates regulatory compliance program with consultation
from legal counsel
• evaluates the organization's readiness in case of business
interruption
• maintains open communication with management and the
audit committee
• teams with other internal and external resources as
appropriate
• engages in continuous education and staff development
• provides support to the company's anti-fraud programs.
(Deloit, 2014)
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12. Reporting Structure of
Internal Audit Function
• In most companies, the internal auditor traditionally
reported to either the Chief Financial Officer or the Chief
Risk Officer, though other may have existed in some
companies. Today, the internal auditor may either report
directly to the Audit Committee, or the Audit Committee
will have a role in hiring, firing, evaluating and
compensating the Chief Audit Officer. The Audit
Committee’s increasing role with regard to the internal
audit is being undertaken to help ensure the internal
auditor’s "independence" and objectivity.
• The relationship between the Audit Committee and the
internal audit function should be clearly defined and
addressed in the Audit Committee’s charter.
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13. Project Overview
• Project - A project is temporary in that it has a
defined beginning and end in time, and therefore
defined scope and resources.
• Project Manager – A PM is assigned by an
organization to achieve the specified objectives of a
project within the competing project constraints. The
role of the project manager is different from a
functional manager or an operations manager.
Depending on the organizational structure, the project
manager may be reporting to a functional manager or
a program manager or a portfolio manager.
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14. Organisation Type:
Functional
A hierarchical organization where each employee has one clear superior,
staff are grouped by areas of specialization, and managed by a person
with expertise in that area.
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15. Organisation Type: Weak
A project manager (often called a project administrator under this type of
organization) with only limited authority is assigned to oversee the
cross-functional aspects of the project.
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16. Organisation Type: Weak
Matrix
A project manager (often called a project administrator under this type of
organization) with only limited authority is assigned to oversee the
cross-functional aspects of the project. The functional managers
maintain control over their resources and project areas.
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17. Organisation Type: Balanced
Matrix
A project manager is assigned to oversee the project. Power is shared equally
between the project manager and the functional managers.
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18. Organisation Type: Strong
Matrix
A project manager is primarily responsible for the project. Functional managers
provide technical expertise and assign resources on an as-needed basis.
Because project resources are assigned as necessary there can be conflicts
between the project manager and the functional manager over resource
assignment.
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19. Organisation Type:
Projectised
an organizational structure in which the project manager has full authority
to assign priorities, apply resources, and direct the work of persons
assigned to the project.
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20. Defining Organisation
Structure
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21. 5 PROCESSES GROUPS
• Initiating –
– Formal process recognize a new project
– Stakeholders are identified
– Commitment is obtained
• Planning –
– The use of resources to plan and subsequently report
progress within the project environment
• Executing –
– The actual work on the tasks planned
• Controlling and Monitoring –
– To provide an understanding of the project’s progress so that
appropriate corrective actions can be taken
• Closing –
– Those processes performed to formally terminate all activities
of a project or phase, and transfer the completed product to
others or to close a cancelled project
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22. 10 Knowledge Areas
• Project Integration Management - All Areas
• Project Scope Management - Requirements
• Project Time Management - Schedule
• Project Cost Management - Budget
• Project Quality Management – Final product outcome
• Project Human Resource Management - People
• Project Communications Management – Info. Delivery
• Project Risk Management – Measure/ Countermeasures
• Project Procurement Management – Goods/services
• Project Stakeholder Management - Stakeholder Analysis
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23. Project Integration
Management
• Primarily concerned with effectively
integrating the process among the project
management process groups that are
required to accomplish the project
objective within an organisation’s defined
procedure
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24. Project Scope Management
• Scope Management is the process of
defining what work is required and then
making sure all of that work is done – and
only that work is done.
• Scope refers to all the work involved in
creating the deliverables of the project and
the process used to create them
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25. Project Time Management
• Time management is an essentially significant
ability for any efficient project manager. Project
managers, who are successful in controlling the
schedule, are usually able to manage the
budget, since schedule has a direct influence on
the project budget. The most common reasons
of going over budget in projects are due to
improper management of schedule. -
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26. Project Cost Management
• Project Cost Management includes those
processes involved in planning,
estimating, budgeting, monitoring and
controlling costs. The ultimate goal of
project cost management is to complete
the project within the approved budget.
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27. Project Quality Management
• Quality is defined as the degree to which
the project fulfills its requirements
• Quality Management includes creating
and following policies and procedures to
ensure that a project meets from the
customers perspective
• A lack of attension to quality means
rework or defects
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28. Project Human Resource
Management
• The Human Resource management
process takes time and effort to plan how
you will involve people, identify the team
members you will need, define everyone’s
roles, create reward systems, improve
team member’s performance individually
and a team, and track performance.
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29. Project Communication
Management
• The Plan Communication Management
process considers how to store, maintain,
distribute, and retrieve information and
what will happen to all the project
information once the project is closed.
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30. Project Risk Management
• Risk Management includes Risk
Management, Risk Identification, the
qualitative and quantitative analysis of risk
response, planning and monitoring and
control of risk response.
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31. Project Procurement
Management
• Procurement is a formal process to obtain goods
and services.
• Private companies have a lot of flexibility in their
procurement practices.
• Government entities are spending public funds,
they have to comply with laws, rules, and
regulations that specifically govern each step of
the procurement process
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32. Project Stakeholder
Management
• Identifies the people, groups, or
organisations that could impact or be
impacted by the project
• Analyse stakeholder expectations and
their impact on the project
• Develop appropriate management
strategies for effectively engaging
stakeholders in project decision and
execution.
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33. Thank You
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34. References
• ROSS, F. E. 1976. Technical Reviews and Audits: Keeping Track of Progress in
Development Projects. Management Review, 65, pg. 11.
• HARRISON, D. 2012. OFFICE OF THE CONTRACTOR-GENERAL ANNUAL
REPORT 2012. 18 Oxford rd. Kingston 10 Jamaica W.I.: pg. 857.
• DELOIT. 2014. Internal audit roles and responsibilities [Online]. Available:
http://www.deloitte.com/view/en_CN/cn/services/corgov/ic/iarr/index.htm?lgtog=lgtog.
• EL-NAGGAR, W., MBA & PMP. 2013. Project Scope Management
Based on PMBOK 5th Edition [Online]. Available:
http://www.slideshare.net/wnaggar/pmp-02-project-scope-management.
• MULCAHY, R. 2013. Rita Mulcahy's PMP Exam Prep, RMC
Publications; Eighth edition pg. 624.
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