BEYOND THE DRUM-BEAT

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On a major infrastructure programme, the small things deferred to the final account have a habit of returning with interest. This is how the drift happens, and why the monthly assurance cycle is where you stop it.

Every commercial manager on a large infrastructure programme knows the feeling. An application for payment lands, month end is bearing down, and something in the numbers does not sit right. The certificate still has to go out, so a judgement is made, the Project Manager is advised, and the thought quietly forms: we will sort it out at the final account.

That phrase deserves scrutiny, because it does more damage than almost anything else in programme delivery. It is the first turn of what I call the contractor merry-go-round, and once you are on it, getting off is harder than you would think.

How the drift compounds

It starts small: a bit of cost coded against the wrong line, a quantity that looks off. Not worth stopping the machine for. Waved through as interim, month one becomes month two, then month three, each carrying its own unresolved queries forward. Ten or fifteen projects, each interpreting the same NEC4 contract slightly differently, feeding data through an ERP system built to run a business rather than account for a project. Individually trivial. Collectively, the picture being certified is a little bit wrong in a dozen small ways, every month.

By month six of a twenty four month contract, the discrepancies have layered on top of one another and the forensic trail needed to challenge them does not exist in any usable form. The interim positions quietly become permanent. What was called temporary was, all along, the final answer.

Why scale makes it worse

On a short scheme, this might be survivable. On a modern major programme running five to ten years, the same monthly drift compounds into a number that lands in a board paper. Public sector scrutiny of cost forecasting has sharpened considerably, and “we will know at the final account” does not survive a modern governance process. Reporting green because the sampled data said green, only to find the picture is red three quarters of the way through, leaves no room to act.

That dynamic pushes good professionals toward optimism bias, adjusting their own judgement to fit numbers they do not fully believe. It is a miserable way to work, and it is entirely avoidable.

The final account was never a safety net. It is simply where the bill for months of deferral comes due.

The drum-beat is the point

The only mechanism that breaks the cycle is refusing to let the first turn happen: assuring the quality and accuracy of cost data every month, so nothing is carried forward unexamined. Done by hand across a dozen projects, with data arriving in different shapes from different systems, this is close to impossible, which is precisely why so many good teams fall back on an eighty twenty sample and a sniff test. Done digitally, with every line of cost data assured every month rather than a sample extrapolated, it becomes achievable.

That is the real distinction: sampling this month's data against assuring one hundred per cent of cumulative data at every assessment. The old way is fine on a good month and dangerous on a bad one. Assuring all of it, every line, every month, is what closes the gap, and what genuinely underpins reasonable procedures to prevent fraud.

None of this requires a cultural revolution. It requires a decision, taken every month, that “we will sort it out at the final account” is not an acceptable answer. By the time the merry-go-round reaches the final account, it has already taken its fare, and it is not inclined to give it back.

Dr Martin Perks FRICS MICW MAC

Director, Black Pear Advisory Ltd

Worcester, UK  |  +44 7771 865271