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Post completion audit aims to evaluate the efficiency and effectiveness of the capital budgeting decision that the management has implemented It compares between the planned and the actual outcome costs and the use of resources results and benefits It contains all assumptions that were made during the decision-making period It is one of the ongoing continuous processes through which the organisation learns and improves Recent research suggests that capital budgeting involves far more than a simple concern with appropriate methods of appraisal As Neale interlinked successful operation of the key phases of a sequential system as depicted below 5 It highlights the key questions examined at different stages of the investment decision and control process 1 Determination of the budget How much is available to spend 2 Search What project ideas have emerged What costs and benefits will they generate 3 Evaluation What is the value of the projected costs and benefits What is the target rate of return Does the projects internal rate of return exceed this Or does it have a positive net present value How risky is the project 4 Monitoring During implementation - Is the project on schedule - Will costs exceed the budget Ongoing - Is the project performing to budget - If not why not 5 Post completion auditing Is the project performing to initial expectations How justified were these expectations What lessons can we draw to assist future appraisals Source 5 According to Neale the final phase of the process is the post-completion audit of the project and it involves examination of the projects progress in its implementation phase and in-depth analysis of the realised costs and benefits to date and the likely future prospects of a project as compared to initial expectations The post completion audit is a positive and forward looking tool The decision to carry out
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