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‡ Ali Zain-ul-Abideen
‡ M.Israr Khan Niazi
‡ Farhat Abbas
‡ Junaid Iqbal
‡ Rizwan Mansoor
‘  
 ‘ 

roject Evaluation is a step-by-step process of

collecting, recording and organizing information
about project results, including short-term outputs
(immediate results of activities, or project
deliverables), and immediate and longer-term
project outcomes (changes in behavior, practice or
policy resulting from the project).
 roject valuation yths
‡ Useless activity that generates lots of boring data
with useless conclusions.

‡ Highly unique and complex process that occurs at

a certain time in a certain way, and almost always
includes the use of outside experts
 roject ypes
‡ -

 „ he project is completed on time and
on budget, with all features and functions originally
specified.
‡ 
„ he project is completed and
operational, but over-budget, over the time estimate,
and with fewer features and functions than initially
specified.
‡  „ he project is cancelled before completion
or never implemented."
   easons ëor roject uccess
1.Executive support
2. End-user involvement
3. Experienced project manager
4. Clear business objectives
5. Minimized scope
6. Standard infrastructure
7. Firm basic requirements
8. Formal methodology
9. Reliable estimates
10. Skilled staff
 op  easons ëor rojects ëail
1. Inadequately trained and/or inexperienced project
managers
2. Failure to set and manage expectations
3. oor leadership at any and all levels
4. Failure to adequately identify, document and track
requirements
5. oor plans and planning processes
6. oor effort estimation
7. Cultural and ethical misalignment
8. Misalignment between the project team and the business
or other.
9. Inadequate or misused methods
10. Inadequate communication, including progress
tracking and reporting
 urposes
In short, project evaluation aims at analyzing
research and development projects, or activities or
ideas, for any or all of the following purposes„

‡ Getting an overall understanding of the project.

‡ Making priorities among a set of projects.

‡ aking a decision about whether or not to proceed

with a project.
 urposes
‡ Monitoring projects, e.g. by following up the
parameters analyzed when the project was
selected.

‡ erminating projects and evaluating the results

obtained.
 †hy 2 
 
2 mportant
Evaluating project results is helpful in providing
answers to key questions like„

‡ What progress has been made?

‡ Were the desired outcomes achieved? Why?

‡ Are there ways that project activities can be refined

to achieve better outcomes?

‡ Do the project results justify the project inputs?

 ypes of valuation
‡ ]   22
V Ex-ante evaluation
V Ex-ost evaluation
‡ ]    22  


V External evaluation
V Internal evaluation or self-assessment
‡ ]   

 
V Formative
V Summative
 ]ased on iming
‡ 
 
2
V A term that refers to future events, such as future
returns or prospects of a company.
V Using ex-ante analysis helps to give an idea of
future movements in price or the future impact
of a newly implemented policy
V Conducted before the implementation of a
project as part of the planning
V Also referred to as appraisal or quality at entry
 ]ased on iming
‡    
2
V Conducted after the project is completed.
V It is based on analysis of past performance.
V Used to assess sustainability of project effects,
impacts.
V Identifies factors of success to inform other
projects.
 ]ased on osition of valuator
‡  
 
2
V Initiated and controlled by the supporter as part
of contractual agreement
V Conducted by independent people V who are not
involved in implementation
V ften guided by project staff
 ]ased on osition of valuator
‡

 
    
V Internally guided reflective processes
V Initiated and controlled by the group for its own
learning and improvement.
V Need to clarify ownership of information
before the review starts
 ]ased on urpose
ë
2
2
2
‡ Formative Evaluation - his evaluation takes place


2the project to guide future development.

‡ Summative Evaluation V his evaluation takes place


 2of a project to appraise its
success.
 ypical nputs 
 valuation
ypical inputs

echnological
‡ he technical activities which will have to be
undertaken, maturity of technology, company's
technological position.

Internal
‡ otential technical success, familiarity with the area
of the project, role of individuals and of different
functions within the organization
 ypical nputs 
 valuation
Financial
‡ Expected benefit, likely cost, both of project and resulting
actions

Market
‡ Size and attractiveness of the market, competitive position

Business
‡ Clarification of objectives, fit with company's strategy,
level of top-management support, key success factors
 ethods of valuations
he Methods/criteria more often used for evaluating
a project are„-
‡ Simple Rate of return (SRR)
‡ ayback eriod (B)
‡ Benefit Cost Ratio (BCR)
‡ Net resent Value (NV) or Net resent Worth
(NW)
‡ Internal Rate of Return (IRR).
 imple ate of eturn
‡ he SRR is a commonly used criterion of project
evaluation. It basically expresses the average net
profits (Net Cash Flows) generated each year by
an investment as a percentage of investment over
the investment¶s expected life
SRR = Y/I
Where
‡ Y = the average annual net profit (after allowing
depreciation) from the investment
‡ I = the initial investment
 ay ]ack eriod (B)
‡ he ay back period is the length of time required
for an investment to pay itself out.

]enefit ost atio (BCR)

‡ It is the ratio of present worth of benefit stream to
present worth of cost stream

BCR = Sum of the present worth of benefit

Sum of the present worth of cost
 ˜et resent
alue (NV)
‡ Net resent Value is computed by finding the
difference between the present worth of benefit
stream less the present worth of cost stream.

‡ NV = resent Worth of Benefit Stream V resent

Worth of Cost Stream.
 nternal ate of eturn (IRR)
‡ Internal Rate of Return (IRR) is that discount rate
which just makes the net present value (NV) of
the cash flow equal zero.

‡ It represents the average earning power of the

money used in the project over the project life. It
is also sometimes called yield of the investment.
 roject udit
‡ 
2 systematic, independent and documented
process for obtaining audit evidence and evaluating
it objectively to determine the extent to which
audit criteria are fulfilled.

‡ 
2 
2
2„ set of policies, procedures or
requirements used as a reference.

‡ 
2 2„ records, statements of fact or
other information, relevant to the audit criteria and
which are verifiable (can be quantitative or
qualitative)
‡ 
2 ë22„ result of the evaluation of the
collected audit evidence against audit criteria

‡ 
2 
2„ outcome of an audit, reached
by the audit team after consideration of the audit
objectives and all audit findings.

‡ 
2„ organization being audited.

‡ 
2
„ person with the competence to conduct
an audit.

‡ 
2 „ one or more auditors conducting an
audit (one being appointed as audit team leader).
‡ 2  
„ person who provides specific
knowledge or expertise with respect to the subject to be
audited.

‡ 
2

„ set of one or more audits planned for a
specific time frame and directed toward a specific
purpose.

‡ 
2 „ description of the on-site activities and
arrangements for an audit.

‡ 
2„ extent and boundaries of an audit
(typically includes a description of physical locations,
organizational units, activities and processes, as well as
the time period covered)
‡ „ demonstrated capability to apply
knowledge and skills
 ypes of udit

‡ Management Audit

‡ Internal Audit

‡ External Audit

‡ Financial Audit

‡ Non-financial Audit
 roject udit
‡ he project audit is a thorough examination of the
management of a project, its methodology and
procedures, its records, its properties, its budgets
and expenditures and its degree of completion.

‡ he primary purpose of a project audit is to find the

reasons for uncomfortable symptom in the project,
and answer questions posed by the sponsor or senior
manager
 he roject udit

‡ 2 
   
 
2
V 1. Current status of the project
V 2. Future status
V 3. Status of crucial tasks
V 4. Risk assessment
V 5. Information pertinent to other projects
V 6. Limitations of the audit
 Ô   

‡ ime and money are two of the most common limits on

depth of investigation and level of detail presented in the
audit report.

‡ Accumulation, storage, and maintenance of auditable data

are important cost elements.

‡ wo often overlooked costs are the self protective activity

of team members during an audit, and the potential for
project morale to suffer as a result of a negative audit
 Ô   

‡ here are three distinct and easily recognized levels of

project auditing„
V c
 
2 - normally most constrained by time and
resources and is usually a brief review of the project
touching lightly on the six parts of an audit

V 2  
2 - usually conducted when a follow-up to
the general audit is required

V 2 
2 - generally carried out by a qualified
technician under the direct guidance of the project
auditor
   
‡ he first audits are usually done early in the
project¶s life.

‡ Early audits are often focused on the technical

issues in order to make sure that key technical
problems have been solved.

‡ Audits done later in the life cycle of a project are of

less immediate value to the project, but are more
valuable to the parent organization
   

‡ As the project develops, technical issues are less likely to be

matters of concern.

‡ Conformity to the schedule and budget become the primary

interests.

‡ Management issues are major matters of interest for audits

made late in the project¶s life

‡ ost-project audits are often a legal necessity because the

client specified such an audit in the contract
 ]  
† Ô ‘  

‡ Identify problems earlier

‡ Clarify performance/cost/schedule relationships
‡ Improve project performance
‡ Identify future opportunities
‡ Evaluate performance of project team
‡ Reduce costs
‡ Inform client of project status/prospects
‡ Reconfirm feasibility of/commitment to project
 ajor asks of a roject udit

1. Evaluate if the project delivered the expected

benefits to all stakeholders.
Was the project managed well?
Was the customer satisfied?
2. Assess what was done wrong and what
contributed to successes.
3. Identify changes to improve the delivery of future
projects.
 roject udit omponents
‡ Review of why the project was selected.
‡ Reassessment of the project¶s role in the
organization¶s priorities.
‡ Check on the organizational culture to ensure it
facilitates the type of project being implemented.
‡ Assessment of how well the project team is
functioning well and if its is appropriately staffed.
‡ Check on external factors that might change where
the project is heading or its importance.
‡ Review of all factors relevant to the project and to
managing future projects.
 ypes of roject udits

‡

 
 
2
V Allow for corrective changes if conditions have
changed and for concentration on project
progress and performance.
‡  
 
2
V ake a broader and longer-term view of the
project¶s role in the organization and emphasize
improving the management
 he udit rocess

‡ Initiation

‡ Enquiry and reporting

‡ Final audit report contents

 he roject udit ife- ycle

Like the project itself, the audit has a life cycle

‡ 2  2  
V 1. 

22222
‡ Focus and scope of audit; assess
methodologies, team members required

V 2]  2222

‡ Determine the standards against which
performance will be measured
 he roject udit ife- ycle

V 3.   2 

2 
‡ Gathering/organizing pertinent data
‡ Focus on what¶s necessary

V 4.   2
‡ he judgment phase
‡ Comparison of actual to standard
 he roject udit ife- ycle

V 5. 
2


2
‡ resent findings to M first
‡ hen, prepare final report

V 6. 
2 
22
‡ Review of audit process
‡ Disbanding of team
 esponsibilities of roject uditor/valuator
‡ First and foremost the auditor should ³tell the
truth´

‡ he auditor must approach the audit in an objective

and ethical manner

‡ Must assume responsibility for what is included

and excluded from consideration in the report

‡ he auditor/evaluator must maintain political and

technical independence during the audit and treat
all materials as confidential
 esponsibilities of roject uditor/valuator

‡  



2
V Assemble a small team of experienced experts
V Familiarize the team with the requirements of
the project
V Audit the project on site
esponsibilities of roject uditor/valuator

‡  



2
V roduce a written report according to a pre-
specified format
V Distribute the report to the project manager and
project team for their response
V Follow up to see if the recommendations have
been implemented
 ssentials of an udit/valuation
For an audit/evaluation to be conducted with skill
and precision, and to be generally accepted by
senior management, the client and the project team,
several conditions must be met„
V he audit team must be properly selected

V All records and files must be accessible

V Free contact with project members must be

preserved
 eferences
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