The primary objective of the Group’s project systems and controls is to deliver business objectives and customer requirements in an efficient and consistent manner. These systems and controls are in place to minimise the risk of errors and omissions on projects, and to maximise the delivery of the required technical quality to customers and the required profitability to the Group.
Controls are in place to ensure that the right people review and approve bids, projects and purchases and that appropriate and focused reporting provides managers with the right information to make informed decisions. The system provides common processes to deliver maximum efficiency.
While significant responsibility for commercial issues is delegated to the businesses, there are consistent controls in place to ensure the Group is able to assess and manage overall business risk. This is set out in the commercial and risk standard.
Our business management systems include policies, standards, processes, procedures, guidance, plans and other tools such as pro forma documents specific to the needs of the business. They are implemented to support the management and the control of risks and to ensure activities are effectively controlled.
The Group authority matrix summarises the authority of employees at each level of the organisation to commit the Group to transactional expenditure and commercial liabilities in the course of their duties. It has been designed to allow the Group to operate flexibly and efficiently. Controls are in place to ensure the Group authority matrix and procedures around its operation and management are adhered to.
A service delivery process has been adopted to enable us to realise value from opportunities for customers, the Group and partners while always adhering to the Group’s Code of Conduct. The commercial framework and the associated service delivery process is applied over the full life cycle of a project, from the receipt of a project or services lead, through bidding, to project delivery and project closure. This process overlays requirements and responsibilities on our managers to ensure a consistent, controlled approach to the control, evaluation and monitoring of bids and projects.
Each bid and each project has a project manager and a project director appointed to it. These individuals are responsible for ensuring the project is carried out in accordance with the Group’s business management system. Controls exist to identify individuals who are suitable for these roles.
Commercial standards, procedures and guidance notes have been developed to help bid and project managers and directors understand specific commercial issues and legal issues associated with international trading in the bidding process and also during the delivery of projects. While the Group commercial standards and procedures are mandatory, guidance notes are advisory and provide the background to specific commercial and legal issues. The guidance notes are reviewed annually to ensure they are up to date and relevant.
An annual risk review of all parts of the Group is undertaken with the assistance of the Group’s insurance brokers. This review is based on interviews with key management and assists in determining the risk profile of the Group. These results are shared with the Group Risk Committee and the Board. Risk registers are produced throughout the Group in accordance with the risk management policy, including project and business risk registers, which feed into the Group risk register, which is split into strategic and operational risks. Project risk registers form an integral part of the business management system and service delivery process while the Group risk register is reviewed by the Group Risk Committee and the Board.
Project summary reports are one page summaries of the financial status of projects at a point in time. The project manager, project director and lead engineer are required to approve the report on a monthly basis.
Project audits are carried out by the internal audit function. The activities of this function are described in more detail below.