Advanced financial management revision question and answer

Advanced Financial Management Block Revision Mock Exams

(a) Discuss the main phases/stages of projects development in public sector.

(b) Outline the major causes of public projects failure.
ANSWER
Main phases/stages of projects and causes of project failure

Stages
1. Planning
2. Analysis
3. Selection
4) Implementation
5) Review

Planning
Concerned with articulation of broad investment strategy, also generation and preliminary screening of projects proposals.

Analysis
This involves a detailed analysis, evaluation of marketing technical financial, economic and ecological aspects of the projects.

Selection
This follows and offer overlaps analysis. It addresses the question of worthlessness of the project based on various project criteria.

Implementation
This involves setting up of the facilities and translating the proposals into concrete projects.

Review
Involves evaluation of the project performance to determine whether any corrective action are required. Review should be done periodical to confirm actual and projected performance.

Causes of Project Failure

Project failure implies the failure of the project to meet its objective with a reasonable cost and time.

Main causes includes:
1. Failure to use the available project control techniques
2. Unclear objectives or plans
3. Poor project management (mis management)
4. Unclear responsibilities due to external interference e.g political
5. Sub-contractor may fail
6. Labour problems e.g strike, go-slows, labour turnovers.
7. Lack of adequate information flow due to a poor management information system.
8. Poor resources used in the project e.g poor material, labour, poor equipment.
9. Cost escalations making the project not achievable within budgeted levels.

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