Strategic Financial Management · Investment Decisions, Project Planning and Control

Project Monitoring, Control and Post-Completion Audit

Updated 11 October 2026 · Fact-checked

Project monitoring tracks actual progress, cost and quality against the plan. Control takes corrective action when they differ. PERT/CPM schedules activities and finds the critical path. A post-completion audit reviews a finished project against its appraisal to find overruns, check forecasts and improve future decisions. Solve by comparing plan and actual, then explaining causes and actions.

Understand Project Monitoring, Control and Post-Audit

A project does not end when the capital budget is approved. Money is spent over months or years, and things drift. Project monitoring means measuring actual progress, cost, time and quality against the plan. Project control means acting on the gap: speeding up, re-planning, cutting scope or finding extra funds.

Two gaps matter most. A time overrun is completion later than scheduled. A cost overrun is final cost above the approved estimate. They are linked. Delay raises interest during construction, overheads and price escalation. Delay also postpones cash inflows, which lowers NPV. Common causes are poor planning, delays in land, clearances or equipment, design changes, weak contractors and inflation.

PERT (Programme Evaluation and Review Technique) and CPM (Critical Path Method) are network techniques. You draw activities as a network, find the longest path (the critical path) and the project duration. Activities on it have zero slack: any delay there delays the whole project. PERT uses three time estimates per activity, so it suits uncertain work. CPM uses one time estimate and a cost-time trade-off, so it suits routine work. CPM also supports crashing: paying more to shorten critical activities.

A post-completion audit (post-audit) is a review after the project is running. It compares actual cost, time, cash flows and returns with the appraisal. Its objectives are to check the accuracy of forecasts, find reasons for variances, fix accountability, improve future appraisal and decide whether to continue, expand or abandon the project. It should be blameless in tone, or managers will pad estimates.

Key rules to remember

PERT expected time: te = (to + 4tm + tp) ÷ 6; to = optimistic, tm = most likely, tp = pessimistic time.
Activity variance and standard deviation: σ² = [(tp − to) ÷ 6]²; σ = (tp − to) ÷ 6; Project variance is the sum of variances of critical-path activities only.
Project standard deviation: σ(project) = √Σσ² of critical activities; Assumes activities are independent.
Probability of completion by a date: Z = (Due date − Expected project time) ÷ σ(project); Read probability from the normal table.
Slack / float: Slack = LST − EST = LFT − EFT; Critical activities have zero slack.
Cost overrun: Cost overrun % = (Actual cost − Budgeted cost) ÷ Budgeted cost × 100; Time overrun is computed the same way on durations.
Crash cost per period: (Crash cost − Normal cost) ÷ (Normal time − Crash time); Crash the cheapest critical activity first.

How to solve Project Monitoring, Control and Post-Audit questions

Use this method for numerical and descriptive questions on project control.

1Read what is asked: critical path, probability, crashing, overrun analysis or post-audit.
2List activities with predecessors and times. For PERT, compute te for each activity first.
3Draw the network. Do a forward pass for earliest times and a backward pass for latest times.
4Find slack. The path of zero-slack activities is critical; its total is the project time.
5For probability, add variances of critical activities only, take the square root, compute Z and read the table.
6For overruns, compute actual minus budget in rupees and percent, then give causes.
7State the control action or recommendation clearly, with its cost and time effect.
8For post-audit answers, cover objectives, comparison with appraisal, causes of variance and lessons.

Quickest way: Critical path first, then one number

When to use it: Use for network problems in the 14-mark questions when time is short.

Compute te for every activity and write it on the diagram.
Trace every path from start to end and add times. The longest is critical.
Sum variances only along that path.
Compute Z once and state the probability.
For crashing, rank critical activities by cost per period and shorten the cheapest one step at a time, rechecking that another path has not become critical.

Common mistakes in Project Monitoring, Control and Post-Audit

Adding variances of all activities for project standard deviation.
Students forget only the critical path decides project duration.
Fix: Add variances of critical activities only, then take the square root.
Taking the square root of each variance and adding them.
Confusion between σ and σ².
Fix: Add variances first, then take one square root.
Using the average of three estimates as te.
Ignoring the weight of 4 on the most likely time.
Fix: Use (to + 4tm + tp) ÷ 6.
Crashing a non-critical activity.
Choosing the lowest crash cost without checking the path.
Fix: Crash only critical activities, and recheck the critical path after each step.
Writing post-audit as fault-finding only.
Students treat it as a punishment tool.
Fix: State objectives: forecast accuracy, learning, accountability, and decisions on the project and future appraisals.
Giving overrun numbers without causes or actions.
Focus on arithmetic only.
Fix: After the figure, add two or three causes and a control action.

Worked examples

Example 1

A project has one critical path of three activities with (to, tm, tp) in weeks: A (2, 5, 8), B (4, 6, 14), C (3, 4, 5). Find the expected project time and the probability of completion within 19 weeks. Take P(Z ≤ 1.52) = 0.9357 (assuming the other paths are not critical).

Show the solution

te(A) = (2 + 20 + 8) ÷ 6 = 5 weeks.
te(B) = (4 + 24 + 14) ÷ 6 = 7 weeks.
te(C) = (3 + 16 + 5) ÷ 6 = 4 weeks.
Expected project time = 5 + 7 + 4 = 16 weeks.
σ(A) = (8 − 2) ÷ 6 = 1, so variance 1.
σ(B) = (14 − 4) ÷ 6 = 1.667, so variance 2.778.
σ(C) = (5 − 3) ÷ 6 = 0.333, so variance 0.111.
Total variance = 1 + 2.778 + 0.111 = 3.889; σ = 1.972.
Z = (19 − 16) ÷ 1.972 = 1.52.
From the normal table, P(Z ≤ 1.52) = 0.9357.

Answer: Expected time is 16 weeks. The probability of completing within 19 weeks is about 93.6%.

Example 2

A plant was approved at ₹40 crore with completion in 18 months. It was completed at ₹46 crore in 24 months. Calculate cost and time overrun, and list the key points of a post-completion audit.

Show the solution

Cost overrun = 46 − 40 = ₹6 crore.
Cost overrun % = 6 ÷ 40 × 100 = 15%.
Time overrun = 24 − 18 = 6 months.
Time overrun % = 6 ÷ 18 × 100 = 33.33%.
Audit compares actual cost, schedule and cash flows with the appraisal.
It finds causes such as delayed clearances, escalation, design changes and contractor delays.
It checks whether delayed inflows and extra interest reduce NPV below the approved estimate.
It fixes accountability and recommends better planning, contingencies and monitoring for future projects.

Answer: Cost overrun is ₹6 crore (15%) and time overrun is 6 months (33.33%). The post-audit should explain the causes, test forecast accuracy, assess the effect on returns and record lessons.

Exam tips

In PERT questions, show te and variance for each activity in a small table. Marks are given for method.
Always state the critical path explicitly before computing probability.
In theory questions, define the term, give objectives or causes in bullets, then add one practical point.
Link delay to NPV: later inflows and extra interest cost reduce value.
Show the Z value and the table figure you used, since tables are not always supplied.

Practice questions from Investment Decisions, Project Planning and Control

Project Monitoring, Control and Post-Audit in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Project Monitoring, Control and Post-Audit: frequently asked questions

What is a post-completion audit of a project?

It is a review after a project is operating that compares actual cost, time and returns with the original appraisal. Its purpose is to find variances, test forecast quality, fix accountability and improve future capital decisions.

What is the difference between PERT and CPM?

PERT uses three time estimates and treats duration as uncertain, so it gives probabilities. CPM uses a single time estimate and focuses on the time-cost trade-off and crashing.

What causes cost and time overruns?

Common causes are poor estimation, delayed approvals or land, design changes, weak contractor performance and inflation. Time delays also add interest during construction and overheads, which raises cost.

Why does only the critical path matter in PERT probability?

Project duration is set by the longest path. A delay on a non-critical activity within its slack does not change the end date, so only critical activities add to project variance.