Principles for financial management

The regions have adopted five key principles for the financial management of large construction projects.

Based on recommendations from a report prepared by KPMG, the regions have adopted five key principles for the financial management of large construction projects. The report will serve as a source of inspiration for regions when they define principles for financial management.

 

The five key principles for financial management are:

 

1. Strategic decisions and project monitoring
The political leadership (the Regional Council or working committee if responsibility has been delegated to such) lay down the strategic decisions for each project, including its budget, vision, strategic objectives and success criteria. The political leadership continually monitors the project and ensures through management manuals that the project's budget and progress are systematically followed up.

 

2. Management manuals
A management manual will be written for each major construction project, describing how the key components of the construction project will be organised and managed, including regular financial follow-up and reporting. The management manual defines the monitoring responsibility for the political leadership and provides guidelines for how and when reports should be submitted to the political leadership. The management manual has to be approved by the Regional Council.

 

3. Robust and authorised project organisation
A robust project organisation authorised to make decisions will be established which can match the external cooperation partners in all phases of the construction project, for example in connection with entering into contracts and ongoing project follow up. The organisation may be established locally as an independent project unit, or as part of the existing construction administration. Some of its tasks may also be assigned to external suppliers.

 

4. Systematic and clear risk management
Prior to the commencement of each major construction project a clear risk policy will be formulated, with content based on politically adopted objectives and policies, including how key control parameters such as time, quality and finances will be prioritised. The risk policy will form a key part of the management manual, and there will be a close relationship between the risk assessment and the follow-up procedures implemented.

 

5. Independent monitoring
Independent monitoring will be established for each major construction project. This task will be carried out independent of the project organisation and may be assigned to another administrative unit or an external company.