Project Finance (Control & Reporting) Level 1 Flashcards
What are the techniques?
What is the difference between cost control and cost reporting?
Cost control is the management of the delivery of a project within the approved budget.
Cost reporting is a tool used to control costs, through keeping the client informed of the likely outturn cost of a project
As a QS what should you be doing for your client?
I should provide my client with critical insights into the financial aspects of a construction project, to enable their effective decision-making and enable me to control costs within their budget.
How would the number of changes affect the frequency of reporting?
The volume of change would mean cost reporting would be carried out at shorter intervals, however if this means reporting would be more frequent than that set out in my appointment, I would always advise the client and seek instruction.
Would it not be better to prevent /manage changes rather than just report on them?
Yes, as a quantity surveyor, I always consider each cost report in the context of the brief and provide possible courses of action to address any cost deviation away from said brief.
How do you compile a risk register?
All members of the project team come together and brainstorm as many elements of project risk as possible.
One party will collate the risks identified and add them to the register.
How do you quantify risks in the risk register?
There are various methods for quantifying risk; two examples would be the simple method of assessment or the probabilistic method.
What are the key components of a cost/value reconcilation?
The cost and the value.
The cost relates to the costs incurred to complete the works, value relates to assessing the value of work complete.
What is the importance of having a project cash flow forecast?
- allows the client to gain an understanding of their financial commitment over the duration of the project and when money is likely to be spent
- can be used to estimate when external funding may be required
- acts as a check against valuations and can give early indication of financial difficulties
What information would you provide in your cost report?
- construction costs
- professional fees
- statutory fees and charges
- third-party costs
- direct works
- land costs
- agency costs
- finance costs
- legal fees
How would you define contingency?
An allowance set aside or a plan as a precaution against future need
What do you understand to be the difference between prime cost and provisional sums?
- Prime cost sums are quantities of work whose extent is known but specification is to be determined.
- Provisional sums are quantities of work whom neither extent or specification is known
What current challenges is Covid/Brexit bringing to Project Finance?
