The Project Financial Control and Reporting competence tests whether you can control costs once a project is on site
This weeks article looks again at the APC Project Financial Control and Reporting competence (T067), this time with example questions around cost reporting. This is a core competence for the Quantity Surveying and Construction Pathway, which must be achieved to level three.
As defined within the RICS Competency Guide, this competency covers ‘the effective cost control of construction projects during the construction phase. Candidates should be aware of the principles of controlling and reporting costs on any construction project. They should have a detailed understanding of the control and reporting processes used on their projects. The competency requirements for a candidate’s chosen faculty are outlined with the Pathway Guide which puts each of the competencies into context, and provides a faculty-based explanation of each level.
Question What measures can be taken to effectively control costs during the construction phase of a project?
Answer The candidate may outline some of the following measures:
? Proactive risk and contingency management
? Implementing a robust change control process
? Management of provisional sums within budget
? Regular cost reporting which is also forward looking
? Rolling final account with closure process for financial impact of change
Question What information would you include within the cost report for a project procured under a single stage traditional procurement route?
Answer This will be based upon the candidate’s experience, the type of project and the requirements of the client, but typically the cost report will include the following information:
? Executive summary, which may include:
Current budget and forecast
Level of cost ‘certainty’, i.e. agreement of provisional sums
Total commitment and expenditure to date
Final account progress
Cash flow position
Progress in the period and current financial position
Major risks or causes for concern
Next steps and recommendations
? Analysis of contingency and risk status
? Register of approved changes/ instructions and pending changes
? Summary of provisional sums and progress against these
? Value engineering or opportunities register
? Risk register
? Cash flow forecast
Question Your final assessment record states that you established the cost reporting protocol on project X. What approach did you take to this?
Answer Again, the candidate’s answer will be dependant upon their own experience, the type of client and project, as well as their role within the team. Whilst the candidate may have standard cost report formats within their organisation, they would be expected to agree the cost reporting protocol with the client and/or project manager at the start of the commission, including:
? Content and format of report
? Timing and frequency of issue
? Interfaces with other parties, such as the contractor and client’s finance team
? Any additional requirements of stakeholders, such as funders
? Distribution list and means of issue
? Method of pesentation of report
By Dean Mills, director, Turner & Townsend Cost Management
APC Trainer's advice is intended as guidance only and should not replace your own study