project budget and risk management us 120375: …

Portfolio of Evidence: Project Management NQF 4: SAQA ID 5008 US 120375

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Project Management - NQF 4 - PM – POE 8 - US 120375 Issue 3 – 01-01-2021

PROJECT BUDGET AND RISK MANAGEMENT

US 120375: PARTICIPATE IN THE ESTIMATION AND PREPARATION OF COST BUDGET FOR A PROJECT OR SUB PROJECT AND MONITOR AND CONTROL ACTUAL

COST AGAINST BUDGET; NQF LEVEL 4, 6 CREDITS

Learner Name: Learner ID #: Learner Student Number:

Formative Assessment

INSTRUCTIONS TO THE LEARNER

You must complete the classroom activities whilst facilitation is taking place. The facilitator may stop at regular intervals to

give you time to complete the activities.

Please complete all work in blue or black pen. The assessor will not assess the evidence if completed in pencil.

You are not allowed to copy from another learner. Any plagiarism committed will be viewed in a serious light and disciplinary

action may be taken against you. Your work must be authentic i.e. your own work. Group work is allowed in certain activities but

your answers must be your own original work after discussions in the group.

You must sign the declaration contained in the assessment preparation and planning document declaring that all work is

your own. If you so not sign this declaration, the assessor will not proceed with assessment and your results will be delayed.

Please do not use any correction fluid i.e. tippex. Rather cross your work out and write next to your mistakes.

The proficiency level required for each unit standard in the cluster is 50% per specific outcome per unit standard. If you are

deemed Not Yet Competent in a unit standard, you will only be required to redo (remediate) those sections in that unit

standard.

Any remediation must be submitted within 30 working days after you received feedback

If you have achieved any unit standards in this skills programme via another provider, please neatly draw a line through the

section and indicate that a certified certificate has been submitted and is included in your administration section.

Answer all questions


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DECLARATION OF AUTHENTICITY

I, ______________________________________ (full name)

___________________________ (ID number) declare that the contents of this portfolio is my own

evidence and that everything was compiled and completed by me.

Learner signature: ___________________________________________________

Date: _____________________________________________________________

Class Activities

During and after the initial training the learner will be required to complete a number of activities. These activities will be both individual and group activities (class activities formative activities). The activities are numbered and are to be included in the learner’s portfolio of evidence. These activities will measure the progress of the learner through the programme. For authenticity reasons these activities must be handwritten.

Class Activity 1: Identify elements and resources to be costed

Complete the following in small groups / individually as per the instructions from your facilitator:

120375.1 120375 EEK1 120375 EEK3 120375 EEK4 120375 EEK5

1. Revision: Briefly explain the following important concepts in your own words and give examples from one of your projects to illustrate the concept

Project scope statement

Project stakeholders


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Resources

Work packages

Change management

Work breakdown structure (draw a simple diagram)

2. Discuss each method of estimating project costs in terms of when you would normally use it, and the type of information you would need to collect or the resources you would use to collect the information

Method When I would use it Information requirements

Analogous Estimating

Parametric Estimating

Vendor Bid Analysis


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3. Which of the following expenses/payments are fixed costs (F) and which are variable costs (V)? Add others that are specific to your project:

Expenses F/V Rent

Salaries: staff

Telephones

Petrol

Refreshments

Water and electricity

Cleaning materials

Bank charges

Advertising and promotions

Internet

Insurance

Interest on loans

Stationery, postage and printing

Repairs

Depreciation on capital goods

Loan repayments

Income tax

UIF (Unemployment Insurance Fund)

VAT (Value Added Tax)

4. Define “fixed cost” and give examples from your project:

5. Define “variable cost” and give examples from your project:


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6. Explain how fixed and variable costs impact on project costs. Give specific examples of each:

7. Review: Give examples of how fixed and variable costs impacted your first project:


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8. Define “direct cost”:

9. Define “indirect cost”:

10. Explain how direct and indirect costs impact on project costs. Give specific examples of each:


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11. Review: Give examples of how direct and indirect costs impacted your first project:

Place any extra evidence after this page, clearly marked for easy reference.

Class Activity 2: Participate in the preparation and production of a cost budget


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1.1 Budget exercise: Draw up a simple expenses budget for the three-month period from 1 September 20XX to 30 November 20XX. You may work on the assumption that all the costs have gone up by 10% across the board due to higher inflation and increases in the prime lending rate.

XYZ Project

Income and Expenditure for the period 1 September 20XX to 31 August 20XX

R

Income

Disbursement 1,500,000

Less: Purchases 700,000

Balance 800,000

Less: Expenditure

Accounting Fees 1,200

Cleaning Materials 5,000

Computer Expenses 20,000

Motor & Travel 50,000

Rental of Factory Premises 200,000


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Stationery & Office Expenses 20,000

Staff Refreshments 10,000

Salaries 400,000

Staff Training 1,000

UIF 4,000

Workman’s Compensation 4,000

Total expenses 715,200

Balance 84,800

Expense item September October November Total

Accounting Fees

Cleaning Materials

Computer Expenses

Motor & Travel

Rental of Factory Premises

Stationery & Office Expenses

Staff Refreshments

Salaries

Staff Training

Total expenses

1.2 Discuss the following in your groups: Why is this method of budgeting not recommended? What will/ do you do differently when drawing up a budget for your project?

Key points of discussion:


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1.3 Your tired old main bedroom and its en-suite bathroom are in serious need of a makeover. You have a budget of R15 000.

Write down:

a) The problem statement for this project, which will include the background to the project, the various stakeholders and how they will be involved in the project and who the users of the finished project will be and what their needs are.


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b) The vision of the solution: a vision statement describing the goal and finished product, a list of features that will be included and a list of those features that will not be included or will be eliminated.

c) Draw the floor plan of the bedroom with its en-suite bathroom, showing doors, windows and

placement of furniture and sanitary ware.


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2 Draw up the work breakdown structure (WBS) for your renovations project. You will have to brainstorm a list of tasks, an estimate for each task, and a list of assumptions for that task. Come up with estimates for each task (a ballpark figure). It should take about an hour for the team to come up with the assumptions and estimates for the 10 to 20 tasks in the WBS. The total time for creating the WBS and then doing the estimate will typically be about two hours. That should be sufficient for a basic estimate for a typical five-person project. Use the space below for the brainstorming and assumptions.

Draw the WBS here: decompose it to work package level at least- (you might decide to tackle the bedroom and bathroom as two separate, but concurrent projects)


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3 List the financial, technical, material and human resources you need to perform the renovations project:

Financial Technical Material Human

4 Budget: Write down the main budget items and what they will cost:

Budget item Cost

Total

5 Complete the following cost budget for 15 items you will need during the renovations project:


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Item Quantity Unit cost (R) Total cost (R)

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

Total

6 Keep track of your spending: you have bought the sanitary ware, cement, paint, tiles and other fittings and have employed a plumber, painter and tiler. Estimate what you will have left after 3 days:

CASH BUDGET FOR 3 DAYS

Beginning cash balance R15 000

Deduct:

Estimated payments to suppliers R

Estimated cash expenses R

Total deductions R

Estimated ending cash balance

7 Estimate the time required to complete the project. Be specific:


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8 If you employ extra workers, what will the impact be on time and cost? Be specific:

9 In which ways can you save costs in order to make your cash go further?


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10 What risks can you foresee to project success and, conversely, the risks associated with not doing the project or some aspect of the project?

Place any extra evidence after this page, clearly marked for easy reference.


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Class Activity 3: Contribute to the monitoring and controlling of cost budget performance


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1. We are tracking the performance of three of the tasks on your project:

Task one involves 40 labour hours per week at an average loaded labour rate of R20 per hour per person. There are 5 people working on task one. Due to the nationwide transport strike, they are performing at 100%, 100%, 80%, 60% and 30% of their capacity respectively.

Task two involves 100 hours per week of labour at R250 per hour for one consultant working at 100% of her capacity.

Task three involves three people each working 60 hours per week at 100% capacity and respectively earning R50, R80 and R100 per hour.

Calculate:

a) Planned value (PV) for each task individually and for the combined tasks

PV= man hours x labour rate in hours


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b) Earned value (EV) for each task individually and for the combined tasks

EV= man hours x labour rate in hours x % of work completed

c) Actual cost (AC) for each task individually and for the combined tasks


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d) Cost variance (CV) for each task individually and for the combined tasks

CV= EV-AC

e) Schedule variance (SV) for each task individually and for the combined tasks

SV= EV-PV


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f) Cost performance index (CPI) for each task individually and for the combined tasks


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2 Draw conclusions as to the state of your project and make suggestions as to where you can improve efficiencies.


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Reflection

Individually complete the following: 120375

The purpose of reflection is for you to consider what you have learnt and how you will use it in the future. Answer the following questions as honestly as you can:

1. After the training programme, I can now (tick):

Investigate various aspects of costs and revenue including marginal costs, marginal revenue and optimisation of profit

Use mathematics to debate aspects of the national and global economy, including tax, productivity and the equitable distribution of resources

Identify elements and resources to be costed through interpreting the project scope statement, work breakdown structure and other project data.

Participate in the preparation and production of a cost budget.

Contribute to the monitoring and controlling of cost budget performance by maintaining records and communicating.

2. How would you apply what you have learnt during this skills programme in the workplace?

3. What was the most significant thing you have learnt in this programme?

4. What do you think you still need to learn more about? (Action Plan)

5. What did you enjoy most about the training?

6. If there was something about the training that you could change, what would it be?


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Facilitator Observation Checklist

The facilitator needs to provide feedback on the participation of each learner in the class:

120375

The purpose of the facilitator observation checklist is to provide the learner with feedback about his/her participation during the formative class activities and also to highlight the observed strengths and perceived weaknesses that the learner displayed during the workshop and/or learning programme.

The facilitator is required to complete the Facilitator Observation checklist for each learner in his/her Learner Workbook. The learner needs to sign-off the document to confirm that he/she has received the observation feedback.

Learner Name Facilitator Name Date

Class Activity Group /

Individual Completed

Participation Comments on perceived strengths and weaknesses of the learner

1. Identify elements and resources to be costed

2. Participate in the preparation and production of a cost budget

3. Contribute to the monitoring and controlling of cost budget performance

4. Reflection Individual

Has the learner sufficiently demonstrated application of the following CCFO’s during the facilitated session?

CCFO1:

Identify and solve problems:

pertaining to cost budgets and their balancing

pertaining to contributing to the management of risks and risk assessment

CCFO2:

Work effectively with others as a member of a team, group or organisation:

when monitoring cost budgets to ensure compliance

CCFO3:

Organise and manage him/herself and his/her activities responsibly and effectively:

in order to have the required risk information available as and when required

CCFO4:

Collect, analyse, organise and critically evaluate information:

to plan and make provision for monitoring budgets and other financial situations

pertaining to the estimating, preparing and monitoring cost budgets

required to correctly assess negative and positive


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events on project objectives

pertaining to the management of risk on a project within own field of expertise

Yes / No Yes / No Yes / No Yes / No

CCFO5:

Communicate effectively:

regarding elements of the cost budget

when contributing to the management of risk

CCFO6:

Use science and technology effectively and critically:

to estimate, prepare and correct cost budgets for a project

when assessing and controlling project risks

CCFO7:

Demonstrate an understanding of the world as a set of related systems:

where the accurate estimation and preparation of cost budgets impacts on the financial success of a project

understanding the impact of risk on the overall success of a project

CCFO8:

Use mathematics to critically analyse, describe and represent situations and to solve problems related to the life or work situations of the adult with increasing responsibilities

Yes / No Yes / No Yes / No Yes / No

Statement by the facilitator:

The learner has demonstrated sufficient knowledge and skill during class to proceed with the summative assessment (circle)

Yes No

Additional comments: (optional)

Learner Signature Facilitator Signature

During and after the initial training the learner will be required to complete a number of class activities. These activities will be both individual and group activities (class activities - formative). The activities are numbered and are to be included in the learner’s portfolio of evidence. These activities will measure the progress of the learner through the programme. For authenticity reasons these activities must be hand written


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Summative Assessment “Summative Assessment is assessment for making a judgement about achievement. This is carried out when a learner is ready to be assessed at the end of a programme of learning”

(SAQA: Criteria and Guidelines for Assessment Policy Document, pg 26)

Please complete the following summative assessment activities and submit as part of your Portfolio of Evidence:

Knowledge Questions

Practical Activities

Witness Testimony

Logbook

The learner needs to individually complete the summative assessment activities. The summative assessment is conducted by means of a knowledge questionnaire and various integrated assessment activities. The learner needs to follow the summative assessment activity instructions to create the evidence required for the portfolio of evidence.

Note: The Critical Cross Field Outcomes are referenced in the following manner: CCFO1- Identify and solve problems in which responses demonstrate that responsible decisions using critical

and creative thinking have been made

CCFO2- Work effectively with others as a member of a team, group, organisation, community

CCFO3- Organise and manage oneself and one's activities responsibly and effectively

CCFO4- Collect, analyse, organise and critically evaluate information

CCFO5- Communicate effectively using visual, mathematical and/or language skills in the modes of oral and/or

written presentation

CCFO6- Use science and technology effectively and critically, showing responsibility towards the environment

and health of others

CCFO7- Demonstrate an understanding of the world as a set of related systems by recognising that problem-

solving contexts do not exist in isolation

CCFO8- Be culturally sensitive across a range of social contexts so that all actions and decisions made are

acceptable to all stakeholders with broad cultural backgrounds


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Knowledge Questions Please answer the following knowledge questions related to the unit standard embedded knowledge and assessment criteria and place it in your portfolio of evidence. Remember to number the answers according to the question numbers, should you need to attach a document.

You have to complete this Knowledge Questionnaire individually based on the theory that you covered in your Learner Guide and the formative assessments you completed in your Learner Workbook.

Knowledge Questions Individually complete the following:

Unit Standard Reference

1. Explain the following methods of costing an element of work 120375 EEK1

Analogous Estimating

Resource Cost Rates

Bottom-up Estimating

Parametric Estimating


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(4)

2. Explain the role of the WBS in preparing project budgets 120375 EEK2

(4)

3. Describe the 3 critical steps in monitoring and controlling project budgets

120375 EEK3

Review actual performance

React to the variance


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Revise the budget

(3)

4. Explain fixed and variable costs and give an example of each 120375 EEK4

(4)

5. Explain percentages and compound interest in terms of a project budget 120375 EEK5

(4)


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6. Explain the use of spreadsheets in project budgeting 120375 EEK6

(5)

7. Explain the implication of a cost variance (CV) of

R3 660 – R3 900= - R240 for a project. 120375 EEK7

(2)


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Practical Activities

Individually complete the following activities to show your ability to integrate and apply your knowledge and skills in the workplace.

Practical Activity 1: Participate in Project Budget and Risk Management

Individually complete the following:

120375. Related EEKs

CCFO1-8

You need to show that you can

Participate in the estimation and preparation of cost budget for a project or sub project and monitor and control actual cost against budget

Contribute to the management of project risk within own field of expertise

Complete the following in your workplace:

1. Produce a cost budget:

a. Create and submit the cost budget for a specific project

b. Include the Scope statement and WBS of your project. Ensure that the WBS is decomposed to the task level.

c. Clearly mark the following on the evidence that you submit:

Written scope statement

WBS that is decomposed to task level

Cost types are listed

Unit costs are indicated

Resource requirements are indicated

The cost budget figures balance

Financial and/or project management authorities have signed off the cost budget

2. Monitor and control the budget:

a. Communicate the cost budget in a manner that ensures all relevant parties are clear on its contents. Include the slides you use as evidence. Your facilitator/coach/supervisor/manager must sign that you have presented to him/her.

b. Identify deviations of actual against budgeted costs and communicate them to a higher authority (e.g. your supervisor). Submit the report/ e-mail in which you have reported the deviations, signed off by a higher authority.

c. Identify opportunities for corrective action or improvement and communicate them to relevant individuals/teams (e.g. your supervisor and project team members). They must verify that they have seen your presentation by signing off the hard copy.


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Practical Activity Checklist

Please tick that you have submitted the following evidence as per the instructions above:

Learner Name

Date

Practical Activity 1

Submitted

Yes/No

Name of my document / Comments

Produce a cost budget

a. Create and submit the cost budget for a specific project

b. Include the Scope statement and WBS of your project. Ensure that the WBS is decomposed to the task level.

c. Clearly mark the following on the evidence that you submit:

Written scope statement

WBS that is decomposed to task level

Cost types are listed

Unit costs are indicated

Resource requirements are indicated

The cost budget figures balance

Financial and/or project management authorities have signed off the cost budget

Monitor and control the budget

a. Communicate the cost budget in a manner that ensures all relevant parties are clear on its contents. Include the slides you use as evidence. Your facilitator/coach/supervisor/manager must sign that you have presented to him/her.

b. Identify deviations of actual against budgeted costs and communicate them to a higher authority (e.g. your supervisor). Submit the report/ e-mail in which you have reported the deviations, signed off by a higher authority.

c. Identify opportunities for corrective action or improvement and communicate them to relevant individuals/teams (e.g. your supervisor and project team members). They must verify that they have seen your presentation by signing off on the hard copy.

Learner Signature


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Witness Testimony

In the workplace or in simulated classroom activities, you need to show your ability to integrate what you have learnt. This can be measured with the Specific Outcomes and the Critical Cross Field Outcomes of the Unit Standard.

Request your facilitator / supervisor (or workplace mentor) to complete the following form to show that you are able to integrate your learning into everyday workplace application. It is necessary that the facilitator / supervisor also provides a short comment on the form:

Learner Name Date

Did the Learner: Yes No

1. Identify elements and resources to be costed through interpreting the project scope statement, work breakdown structure and other project data?

2. Participate in the preparation and production of a cost budget?

3. Contribute to the monitoring and controlling of cost budget performance by maintaining records and communicating?

4. Identify and recognise potential risks that could affect project performance?

5. Contribute to the assessment of the impact and likelihood of identified risks?

6. Contribute to the development of risk management statements and plans?

7. Monitor and control the project risks?

8. Identify and solve problems in which responses demonstrate that responsible decisions using critical and creative thinking have been made?

9. Work effectively with others when monitoring cost budgets to ensure compliance?

10. Organise and manage oneself and one's activities responsibly and effectively?

11. Collect, analyse, organise and critically evaluate information?

12. Communicate effectively using visual, mathematical and/or language skills in the modes of oral and/or written presentation?

13. Use science and technology effectively and critically, showing responsibility towards the environment and health of others?

14. Demonstrate the world as a set of related systems where the accurate estimation and preparation of cost budgets impacts on the financial success of a project?

15. Be culturally sensitive across a range of social contexts so that all actions and decisions made are acceptable to all stakeholders with broad cultural backgrounds?

Comments about how the learner applied the knowledge and skills in this programme:

Learner Signature

Date

Facilitator Name:

Facilitator Signature

Date


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PRACTICAL / WORKPLACE LOGBOOK

Complete this individually in your classroom / workplace. This logbook has been included to record all the time spent on learning and preparation for the assessment and other activities related to this programme:

Time spent in class (training)

Time spent completing an activity should be signed off by a facilitator / supervisor, mentor or witness where possible.

Time spent applying the new knowledge and skills

The logbook should show that the learner has spent at least 60 hours in acquiring the required knowledge and skills of this programme:

o Identify elements and resources to be costed through interpreting the project scope statement, work breakdown structure and other project data.

o Participate in the preparation and production of a cost budget.

o Contribute to the monitoring and controlling of cost budget performance by maintaining records and communicating.

Learner Name:

Learner ID#:

Course ID: FETC Project Management NQF 4: SAQA ID 50080

Unit Standard ID US 120375: Participate in the estimation and preparation of cost budget for a project or sub project and monitor and control actual cost against budget; NQF Level 4, 6 Credits

SAQA ID Number 120375 Credits 6 Notional Hours 60 Hours

Practical / Workplace Activities Start Date

End Date

Total No of Hours

Sign Off by Facilitator / Supervisor / Manager / Mentor / Witness

Name & Surname

Relationship to Learner

Signature

Participate in the estimation and preparation of cost budget for a project or sub project and monitor and control actual cost against budget

60 Hours


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Activities Completed:

Classroom Training

Draw up a WBS for your project

List the resources required for your project

Research the costs per unit for each resource listed

Draw up a cost budget in a format agreed with your supervisor

Submit your cost budget to your supervisor for discussion and approval

Communicate the cost budget to relevant parties

Update the cost budget to reflect actual costs

Any other activities:


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FEEDBACK SECTION

Comments from Facilitator:

Comments from Student:


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Assessment Activities Checklist The learner needs to complete all the required activities that are guided by the Specific Outcomes and Assessment criteria of the Unit Standard(s) in this programme:

Programme LP4: Project Budget and Risk Management

Unit Standards US 120375: Participate in the estimation and preparation of cost budget for a project or sub project and monitor and control actual cost against budget; NQF Level 4, 6 Credits

Once you have completed all the assessment activities, request your supervisor to check that you have completed all the required activities and that they have all been placed in your Portfolio of Evidence, in the following order:

Did the learner provide the required evidence:

Reference: Comments / Feedback Yes No

Formative – Class Activities

Class Activity 1

120375.1 120375 EEK1 120375 EEK3 120375 EEK4 120375 EEK5

Class Activity 2

120375.2 120375 EEK2 120375 EEK6 120375 EEK7

Class Activity 3 120375.3

120375 EEK3

Reflection 120375

Facilitator Observation Checklist

120375

Summative - Knowledge Questions

Question 1 120375 EEK1





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Did the learner provide the required evidence:

Reference: Comments / Feedback Yes No




Summative – Practical Activities

Practical Activity

120375. Related EEKs

CCFO1-8

As per the Practical Activity 1 Checklist:

Summative – Witness Testimony

Witness Testimony 120375

Summative – Logbook

Logbook 120375

Learner Name:

Learner Signature

Date

Facilitator Name:

Facilitator Signature

Date


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FOR STUDENT This is to verify that the above work is my own / authentic. Learner Name: ______________________________________________ Learner Student No:___________________ Learner Signature: ________________________ Date: _____________________________ FOR FACILITATOR File Checked:

This is to verify that the learner has completed all the above and is awaiting final assessment / moderation. Facilitator Name:__________________________ Facilitator Signature________________________ Date:______________________________

Date Facilitator Signature

project budget and risk management us 120375: …

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