How do you oversee program finances?

1 Define the program budget

The first step to oversee program finances is to define the program budget, which is the estimated amount of money that is allocated for the program. The program budget should be based on the program scope, schedule, resources, risks, and quality requirements. You should also consider the funding sources, the funding cycles, and the funding constraints of your program. The program budget should be realistic, accurate, and transparent, and it should be approved by the program sponsor and the senior management. You should also document the budget assumptions, the budget baseline, and the budget contingency.

2 Track the program costs

The second step to oversee program finances is to track the program costs, which are the actual expenses that are incurred for the program. The program costs should be monitored and measured regularly, and compared with the program budget. You should use appropriate tools and techniques, such as cost accounting, variance analysis, earned value management, and forecasting, to track the program costs. You should also identify and analyze the cost drivers, the cost trends, and the cost risks of your program. You should also update the program budget and the program forecast as needed, based on the actual costs and the changes in the program scope.

3 Report the program financial performance

The third step to oversee program finances is to report the program financial performance, which is the degree to which the program is meeting its financial objectives and delivering its expected benefits. The program financial performance should be communicated and reported to the relevant stakeholders, such as the program sponsor, the senior management, the project managers, the team members, and the customers. You should use appropriate formats and methods, such as dashboards, charts, graphs, tables, and narratives, to report the program financial performance. You should also highlight the financial achievements, the financial issues, and the financial recommendations of your program.

4 Manage the program financial risks

The fourth step to oversee program finances is to manage the program financial risks, which are the uncertain events or conditions that may affect the program budget or the program benefits. The program financial risks should be identified, assessed, prioritized, and mitigated throughout the program lifecycle. You should use appropriate tools and techniques, such as risk registers, risk matrices, risk response plans, and risk audits, to manage the program financial risks. You should also monitor and control the program financial risks, and report any changes or deviations to the relevant stakeholders.

5 Optimize the program financial resources

The fifth step to oversee program finances is to optimize the program financial resources, which are the assets or inputs that are used for the program. The program financial resources include the human resources, the material resources, the equipment resources, and the information resources. You should optimize the program financial resources by ensuring that they are allocated, utilized, and controlled efficiently and effectively. You should also leverage the program financial resources by maximizing their value, minimizing their waste, and enhancing their synergy.

6 Align the program finances with the program strategy

The sixth and final step to oversee program finances is to align the program finances with the program strategy, which is the overall direction and purpose of the program. The program finances should support and enable the program strategy, and not hinder or contradict it. You should align the program finances with the program strategy by ensuring that they are consistent, coherent, and compatible with the program vision, the program goals, the program objectives, and the program benefits. You should also review and adjust the program finances as needed, based on the changes in the program strategy or the program environment.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?