Financial Control and Reporting Flashcards
Why is controlling and reporting costs of ‘great importance’ to the success of a project?
Promotes financial transparency.
Aids budget management.
Identifies risks and variances.
Facilitates decision-making.
Ensures project delivery within budget and schedule.
What are PSUMs and Risk Allowances - what is the difference?
PSUMs: Cover undefined work/materials.
Risk allowances: For unforeseen events.
PSUMs cover specific items, while risk allowances cover unforeseen events.
Under what circumstances can a contractor claim for L&E?
When a Relevant Matter is the cause of claim.
What is the importance of monthly cost reports?
Stakeholders receive current expenditure data.
Enables timely decision-making.
Monitors budget performance.
Identifies variances.
Implements corrective measures for project success.
Why might highlighting changes from previous cost reports be important? (Hubs)
Highlights cost changes and reasons.
Provides client confidence in cost adjustments.
Explains trajectory changes.
Aids in trajectory control strategies.
How was the L&E claim ‘factored into’ the final account sum? (BM)
EoT approved: 5-week extension.
Contractor’s 5% overhead rate used.
Weekly cost derived: £1.8k.
Total: Circa £9.5k.
Although stating to the contractor and the client that actual costs can be used to determine costs, they both agreed to accept this figure.
How did you advise during these regular meetings? (Hubs)
Presented AFA document.
Highlights:
Increase from previous catchup.
Budget comparison.
Remaining contingency.
Large item costs.
Anticipated impacts.
Decision on variations.
Prioritization for budget adherence.
Did you help the client recognise the ‘priorities’? (Hubs)
Yes:
Works exceeding budget evident.
Decision:
Prioritize residential communal areas.
Omit management areas.
Patch repairs in corridors.
How might the contractor take advantage? (MTC)
Error in variation rates possible.
AFA accuracy compromised.
Misleading impression of lower costs.
Client risk paying more.
