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Managing project costs

Learn about the importance of monitoring and controlling costs; find guidance and resources to manage project costs; understand responsibilities when managing public funds, to help ensure projects achieves a value for money outcome.

Effective cost management aims to ensure value for money is achieved and projects are delivered within their approved budget.

The approved project budget would have been established at the project definition, funding and approvals phase. Guidance on developing a project budget, as outlined within the cost plan, is available.

After the project has received approval and funding, you should assess the difference, if any, between the approved budget and that documented in the business case. You should continue to assess any changes to the project budget throughout the project lifecycle, including as the estimated project costs become more certain when, for example, a contract is signed with the contractor.

Throughout the project, you should establish cost management processes to understand the project costs and provide an early warning of potential financial problems, these may include:

  • cost control activities
  • value engineering, and
  • cost reporting and record keeping.

The works contract will outline specific contractual obligations and rights in relation to the process for contractor payments. Guidance on key contractual obligations and rights in the delivery phase is available.