CVEN9702 Chap.8 Monitoring, Reporting and Earned Value
Monitoring, Reporting and Earned Value
Project control compares observed performance with the authorised plan and uses the difference to decide corrective action. Earned value puts planned work, completed work and actual cost on a common budget basis. Schedule variance compares earned value with planned value; cost variance compares earned value with actual cost. Credible results depend on a maintained baseline and defensible progress evidence.
What this chapter covers
- 01
Set a clear status date and preserve the authorised baseline
- 02
Calculate planned value from time-phased budgeted work
- 03
Calculate earned value from verified completion
- 04
Separate actual cost from the value of progress
- 05
Interpret schedule and cost variances independently
- 06
Turn variance into cause, action, ownership and forecast
Worked example · free
Status a project with earned value
- +1PV is 0.60 times 100,000, giving 60,000 dollars.
- +1EV is 0.50 times 100,000, giving 50,000 dollars; AC is 55,000 dollars.
- +1SV is EV minus PV, or negative 10,000 dollars, indicating behind schedule.
- +1CV is EV minus AC, or negative 5,000 dollars, indicating over budget for work achieved.
- +1SPI is 50,000 divided by 60,000, or 0.833.
- +1CPI is 50,000 divided by 55,000, or 0.909.
Key terms
- Status date
- The reporting cut-off at which planned work, completed work and actual cost are measured.
- Planned value
- The authorised budget assigned to work scheduled for completion by the status date.
- Earned value
- The authorised budget value of work actually completed by the status date.
- Actual cost
- The cost recorded for the work performed by the status date.
- Performance index
- A ratio comparing earned value with planned value or actual cost, where one is the neutral benchmark.
Monitoring, Reporting and Earned Value FAQ
Why is actual cost not a progress measure?
Spending records what the project paid, not how much accepted work it produced. A project can spend quickly and achieve little. Earned value converts verified completion into the baseline budget so cost and progress can be compared fairly.
Can a project be behind schedule and under budget?
Yes. If earned value is below planned value but above actual cost, schedule variance is negative while cost variance is positive. The project has completed less than planned but spent efficiently on the work actually achieved.
What should a variance report include?
Include the status date, baseline comparison, affected activities or milestones, verified cause, forecast consequence, corrective action, owner and decision date. A number without cause and action is monitoring, not complete control.
Does schedule variance measure days late?
No. Earned-value schedule variance uses budget units. Use the current network and milestone forecast to determine calendar delay while retaining SV and SPI as progress indicators.
Exam move
Use one consistent colour or column for planned value, earned value and actual cost in every practice table. Write the two variance formulas before inserting numbers, then interpret the sign in a sentence. Create examples for all four combinations: ahead and under budget, ahead and over budget, behind and under budget, behind and over budget. This prevents one favourable measure from contaminating the other conclusion.
Practise progress measurement with discrete milestones and installed quantities rather than unsupported percentages. After each calculation, name a plausible cause and the evidence needed to confirm it, then propose an accountable corrective action and update to forecast. Review historical terminology such as BCWS, BCWP and ACWP alongside modern PV, EV and AC so older course papers remain readable.
Keep monetary variances in currency and indices unitless, and check that CPI and SPI around one match the direction described in your prose. Build a status pack from a small work breakdown structure. Time-phase each control account to form planned value, then define an objective earning rule before progress is reported.
Use weighted milestones for design or procurement and installed quantities for repetitive construction; avoid allowing subjective percentages to create earned value without evidence. At the status date, freeze the data date, reconcile invoices and accruals, and map actual cost to the same scope used for earned value. Calculate SV, CV, SPI and CPI, but do not treat a favourable index as a diagnosis.
Drill into the activities and cost accounts that created the variance. Separate one-off causes from trends, and distinguish schedule status from the network forecast because monetary schedule variance does not directly state days late. Build an estimate at completion under at least two assumptions: remaining work performs to budget, or current cost efficiency continues. State which assumption is credible and why.
Connect each corrective action to an owner, due date and expected effect on forecast completion or cost. Reconcile current forecast changes with approved baseline change control. Finish the report with data limitations and leading indicators such as unresolved approvals, productivity drift or near-critical float consumption, so management receives evidence for the next decision rather than only a backward-looking scorecard.
