Change control and variations

Approve or reject

The project team will be required to approve or reject each change formally logged within the process. If a change is rejected, there may be a requirement for the team to review an alternative proposal, rework the design or change the method of working.

If a change is approved, then the funding of the change will need to be considered. This usually follows three main routes:

• fund the change from contingency (see Risk and opportunity below);
• fund the change by budget transfers from within the project; or
• fund the change from a third party.

Risk and opportunity

Within any project, the team will be required to review the initial risks and opportunities during the early stages of development. Once these have been identified and approved by the client, an assessment of the contingency levels can be made. On agreement of the contingency amount for the project, this can be included as a fund for potential changes from within the cost report.

There needs to be a clear understanding within the project team as to how the contingency fund will be affected by any changes raised. A mechanism needs to be defined that allows funds to be allocated for scope change or even growth (inflation), as the project proceeds.

Cost reconciliation statement

The cost reconciliation statement should be sufficiently detailed to explain all significant movements of money during the course of the contract, including the funding source for changes. The software solution chosen to manage change will influence the way the budgets are maintained. All records should be saved electronically, in order to establish an audit trail for change.

Reporting change

The reporting of change will most likely be on a weekly and or monthly basis.– see also Purpose of financial reporting. The procedure should describe the change report format required. It is recommended that the report provides information on the following:

• the number of changes raised in the month;
• the value of changes raised in the month;
• the funding sources for the change;
• the type of change (scope, legislation, and so on);
• cumulative changes raised;
• the cumulative value of changes;
• the amount of changes awaiting approval; and
• the time taken to approve a change.