November 26, 2007 – How to survive an Audit

Truth in reporting is vital to building trust and successfully managing people and projects, but sometimes it is better to keep your mouth shut. Too much information can lead to problems. One of my former co-worker never had the filter between his thoughts and his lips installed. Case in point: Needing to take Friday off, he asked his manager for the time off. That part was great. However, when asked what he had planned, he should have just said he needed to run some errands. Unfortunately he proceeded to tell of his DUI conviction and that he was going to an alcohol awareness weekend as part of his sentencing.

Having survived many project audits and then being both a Project Officer and Quality Assurance Auditor for several years I can assure you that a project audit is not the place to offer more information than requested. Here are 6 tips on how to survive an audit.

1. Determine the audit type. There is a big difference between an project health check and a regulatory audit. The purpose of a health check is to understand the state of the project to help increase the probability of success. A regulatory audit is to verify compliance with regulations or standards. You can use a health check audit to bring visibility to issues and risks facing the project so management can supply the necessary resources to address them. Regulatory audits, on the other hand, are there to find problems. Unless there are serious or illegal problems with your project, you may want to down play the issues for a regulatory audit.
   
2. Understand your Auditor. The audit groups I have worked with all had the interest of you, your project and the company in mind, not their own agendas. Some auditors feel they have to find something wrong in order to justify their existence. Understanding the type of auditor you are dealing with will help shape the way you answer questions.
   
3. Get the list. Understand the standard you are being held to. Since audits rely heavily on question lists, get the list ahead of time. Make adjustments to your management and documentation styles to be able to answer "yes" to any of the questions. If one of the questions is "Are regular meetings held that review status, financials and issues?" then make sure your minutes have those points listed.
   
4. Avoid the search. Based on the list of questions, have evidence that shows compliance readily available. If they want meeting minutes, have a folder full of them. When they are looking for approvals, have copies, emails or other artifacts compiled to present. If they have to dig, you may spend even more time answering misdirected questions.
   
5. Only answer the question. You have the right to remain silent. You many want to use that right, especially for regulatory audits. Just like my buddy the drinker, giving too much information can cause problems. Even if what you say isn’t a problem, additional data can cloud things or look as if there are issues. Again, if there are serious or legal items at stake, don’t hide them but don’t air your dirty laundry, either.
   
6. Less than 100% is good. Odds are you will miss something on you audit and that’s okay. The key is to develop an action plan based on the short comings and get any audit issues resolved before the next one.

As long as you know the expectations, audits results shouldn’t be a surprise to you. By following these steps you may, however, surprise you auditor.

November 19, 2007 – Automotive Sponsor Problems

It is never good when your mechanic calls and asks, "How attached are you to this vehicle?" Friday was not one of my better days from that perspective. I drive a ten-year old Plymouth Neon and normally it gets me where I need to be. Sure it leaks oil and steering fluid but the AM radio still works and three of the four door locks are still automatic. But Friday it decided to die on the way to work.

The mechanic said it would take about $900 to get it back up and running. Then there was the list of things that "need" to be done totaling another $1000. I just checked and my car is only worth about $2500. I felt like the sponsor of a project that has gone bad. Actually there were three things that drove that feeling home.

Return on Investment. The mechanic was the first to bring it up with his opening question about my love for the Neon. He could tell the cost of fixing it wasn’t going to be cheap. Prior to undertaking a project, a company needs to understand the ROI, both the costs and the returns. The projected costs are more than the expenses to complete the project. Don’t forget to include training, maintenance, licensing and other life cycle pieces.

These costs should be balanced by the expected returns from the endeavor. Savings are usual the first thing considered. How many people will I replace? How much time and money will it save. Add to these benefits forecasted increases in projected sales because staff can spend less time fiddling with the system and more time with customers. Consider that the new online experience may lead to more purchases. Customer satisfaction may net more repeat business. Think through the project purpose and project the positive results of success.

Lack of Information. Friday morning I certainly didn’t have enough information to decide whether or not to give up on my car. I needed a multiple choice question and was handed only a true / false option. How much was my car actually worth? What would it cost to get an comparable vehicle? Was it worth more as scrap metal? What could I really afford? Would there be additional expenses I didn’t anticipate? If I bought a different car, would it have more problems than this one?

When deviating from or adding to the project scope, a Change Request documents the final decision, but the discussion starts by answering questions. Sponsors expect project manager to supply them with the information to answer those questions. Why wasn’t it in scope to begin with? What are the consequences of not doing it? How much is it going to cost? What other options are there? If the answers aren’t readily available, you may need to request funding to research and find them.

Risk Management. Among the "other" items my car needs are new front brakes, brake fluid flushed and replaced, and my back breaks aligned. Total cost an additional $450. The risk of not fixing them is obvious. If you can’t stop your car, something else will have to. Whatever you use to stop it (another car, a brick wall, etc.) will probably cost more than $450. As with any risk I could Avoid, Transfer, Mitigate or Accept it. Buying a new car would avoid the problem. Making sure my collision insurance is up to date would transfer the risk. Getting the brakes fixed would mitigate the issue. I opted to accept the risk and postpone the brake fix to a future phase of the project. You may want to stay off Beach Boulevard for the next week or so.

It could have been worse, though. Had the car continued to run it would have completely overheated and destroyed the engine. I wouldn’t have had any choices at that point and my next blog would have been about purchasing a new car. Don’t hide project problems from your sponsor until things overheat and there are not choice left.