Manage project cost

This unit describes the performance outcomes, skills and knowledge required to identify, analyse and refine project costs to produce a budget, and to use this budget as the principal mechanism to control project cost.


This unit applies to those responsible for managing and leading a project in an organisation, business or as a consultant.

The project manager operates according to assigned authority levels, and is responsible for own performance and the performance of others.

The project manager may undertake the work in the context of an organisational program and/or portfolio of projects.

This unit has generic application for projects in a range of industries, organisations and contexts.

In the context of this unit a project is defined as involving:

a comprehensive, detailed and integrated project management plan

a formal communications plan

a dedicated and project-based budget

formal and planned engagement with a wide range of stakeholders

a documented risk, issues and change-management methodology

a quality plan with assurance and control processes

a project team-based environment.


Not applicable.

Elements and Performance Criteria

1. Determine project costs

1.1 Determine resource requirements for individual tasks identified in the work breakdown structure, with input from stakeholders and guidance from others

1.2 Estimate project costs to enable project budget to be prepared within agreed tolerances

1.3 Develop a project budget

1.4 Develop a cost-management plan, within delegated authority, to ensure clarity of understanding and ongoing management of project finances

2. Monitor and control project costs

2.1 Implement agreed financial-management processes and procedures to monitor actual expenditure against budget

2.2 Select and use cost-analysis methods and tools to identify cost variations and evaluate alternative actions

2.3 Implement and monitor agreed actions to maintain financial objectives

2.4 Provide accurate and timely financial reports

3. Complete cost-management processes

3.1 Conduct appropriate activities to signify financial completion

3.2 Review project outcomes using available records to determine the effectiveness of project cost management

3.3 Review cost-management issues and document improvements

Required Skills

Required skills

analytical skills to evaluate processes and recommend improvements

numeracy and budgeting skills to monitor expenditure and manage project costs

technology skills to use software for recording expenditure and reporting on the project budget and costs.

Required knowledge

budgeting processes, tools and techniques

methods and tools for costing and cost analysis.

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the following is essential:

applying budgetary processes, tools and techniques relevant to the project context

monitoring project costs across the project life for a project of sufficient complexity to demonstrate the full range of performance requirements

preparing a budget for a project.

Context of and specific resources for assessment

Assessment must ensure:

access to workplace documentation, including budgets and other financial documents

consideration of feedback from project stakeholders on how costs were managed.

Method of assessment

A range of assessment methods should be used to assess practical skill and knowledge. The following examples are appropriate for this unit:

direct questioning combined with review of portfolios of evidence and third-party workplace reports of on-the-job performance by the candidate

oral or written questioning to assess knowledge of strategies for managing project costs and their application in different situations

analysis of responses addressing case studies and scenarios that present issues and problems in project cost management

review of developed and implemented cost-management plan

review of documentation about project outcomes, cost-management issues and identified improvements.

Guidance information for assessment

Holistic assessment with other units relevant to the industry sector, workplace and job role is recommended.

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Resource requirements may include:



fees and charges

human resources



statutory costs.

Others may include:

program manager

project specialists

relevant project authority

subject matter experts

team members.

Project costs are estimated considering:

contingencies to allow for identified risks and uncertainty

degree of accuracy required (tolerance levels)

information available at the time

organisational requirements, for example overhead and profit margin

work breakdown structure.

Delegated authority means that activities will:

be conducted routinely or as changing circumstances dictate

be done independently within broad guidance

involve consultation with other project members, teams and internal stakeholders

involve taking a lead role in a team where required

involve the selection, use and supervision of appropriate cost-management methods, tools and techniques

take into account internal organisational change and external environmental change.

Financial-management processes and procedures may include:

approval processes

communication and reporting processes

financial authorisations and delegations

invoice procedures

organisational chart of accounts links.

Financial completion may include:

allocations and distributions

final payments

financial reports

organisational project accounting procedures

project accounts finalisation

variations statement.

Review may include evaluations of:

agreed major milestones, for example phases and subcontracts

change of key personnel


delivery of major deliverables

finalisation of project and other agreed milestones


Records may include:

budgets, commitment and expenditure

cash flows

cost-management lessons learned

cost-management plans

invoice and payment summaries

lists of potential costs

project and/or organisational files and records


recommended and approved courses of action

reports to relevant stakeholders.


Management and Leadership – Project Management

Employability Skills

This unit contains employability skills.

Licensing Information

No licensing, legislative, regulatory or certification requirements apply to this unit at the time of endorsement.