1.

Overview:

This report provides a comprehensive overview of the Agenagn Housing Project, focusing on key aspect
of cost/budget management. The report aims to articulate the project's objectives, outline the purpose
of the cost management plan, and highlight the significance of effective cost management in ensuring
project success.

The project brief for the Agenagn Housing Project entails the development of a property rental and
selling platform that connects renters and sellers directly with tenants and buyers in Addis Ababa,
Ethiopia. The project has financed by Al-Mel Trading PLC in 2021. The key objectives of the project are to
provide a commission-free brokerage service, streamline the process of property transactions, and
improve access to affordable housing. By leveraging technology and establishing strategic partnerships,
the project aims to create a more efficient and transparent real estate market, benefitting both property
owners and potential tenants/buyers.

1.1 Purpose

Cost management is a critical aspect of the project, ensuring that financial resources are effectively
allocated and utilized. The purpose of the cost management plan is to establish a framework for
estimating, monitoring, and controlling project costs throughout its lifecycle. By developing a
comprehensive plan, the project team can effectively track expenses, identify cost-saving opportunities,
and make informed decisions regarding resource allocation. The cost management plan also serves as a
reference point for stakeholders, providing transparency and accountability in financial matters.

Furthermore, the cost management plan helps in evaluating the financial viability of the project,
ensuring that it remains within budgetary constraints. By considering various cost components such as
personnel, infrastructure, software development, marketing, training, and miscellaneous expenses, the
plan provides a holistic view of the project's financial requirements. The inclusion of a contingency
budget acknowledges the need to accommodate unforeseen expenses and mitigates the risk of cost
overruns.

Effective cost management is crucial for project success as it directly impacts the project's financial
health, resource allocation, and overall sustainability. By adhering to the cost management plan, the
project team can maintain financial discipline, optimize resource utilization, and ensure that the project
remains financially viable. The plan also enables the team to make informed decisions regarding budget
allocation, prioritize activities, and adjust strategies as needed to achieve the project's objectives.

In conclusion, this report has provided an overview of the Agenagn Housing Project, highlighting its
objectives and the importance of effective cost management. The project aims to revolutionize the real
estate market in Addis Ababa by offering a commission-free brokerage service and improving access to
affordable housing. The cost management plan plays a crucial role in ensuring financial discipline,
resource optimization, and the overall success of the project. By adhering to the plan, the project team
can navigate financial challenges, monitor expenses, and make informed decisions to achieve the
desired outcomes.
1.2 Assumptions:

One assumption for the Agenagn Housing Project is the basis of accounting, which is accrual basis of
accounting record. The accrual basis of accounting recognizes revenue and expenses when they are
earned or incurred, regardless of when the cash is received or paid. This method provides a more
accurate reflection of the project's financial position and performance by matching revenues and
expenses in the appropriate accounting period.

1.3 Scope

The scope of the Agenagn Housing Project encompasses various aspects related to property rental and
selling, specifically within the city of Addis Ababa, Ethiopia. The project focuses on developing a digital
platform that facilitates direct transactions between property owners and potential tenants or buyers.
The scope includes the design and development of the online platform, the establishment of
partnerships with relevant stakeholders, the implementation of marketing and promotional strategies,
and the provision of customer support services.

Furthermore, the scope of the project encompasses the management of financial resources, personnel,
and technological infrastructure required for the successful operation of the platform. It also includes
the coordination of activities related to property listing, verification, documentation, and transaction
facilitation. However, it should be noted that property maintenance and other post-transaction services
are beyond the initial scope of this project.

Additionally, the scope of the project assumes the availability of necessary resources, such as skilled
personnel, technological infrastructure, and legal frameworks, to support the development and
operation of the digital platform. It also assumes a favorable regulatory environment that allows for the
efficient and secure processing of property transactions. Any limitations or constraints that may arise in
terms of resources, regulatory compliance, or market conditions will be addressed and managed within
the project's risk management framework. The scope of the project does not extend to physical
construction or property development activities. It primarily focuses on the digital platform and the
facilitation of property transactions. The project team will collaborate with property owners, tenants,
buyers, and other relevant stakeholders to ensure a seamless and user-friendly experience within the
defined scope.

The assumptions for the Agenagn Housing Project include the adoption of the accrual basis of
accounting, the scope encompassing property rental and selling in Addis Ababa, the availability of
necessary resources, and the exclusion of physical construction or property development activities.
These assumptions provide a foundation for planning, executing, and monitoring the project, while
allowing for flexibility in addressing any unforeseen challenges or changes that may arise during the
project lifecycle.
1.3.1 Project Cost Management

Cost Planning:

Cost planning is an essential aspect of the Agenagn Housing Project, aiming to establish a systematic
approach for estimating, allocating, and controlling costs throughout the project lifecycle. The primary
objective of cost planning is to develop a comprehensive budget that aligns with the project's objectives
and constraints. This involves identifying and quantifying all relevant costs associated with the
development and operation of the digital platform for property transactions.

To effectively plan costs, the project team conduct a thorough analysis of all project activities and
deliverables. This analysis will help in estimating the resources, materials, and labor required for each
task. The team will also consider any indirect costs, such as overhead expenses, administrative costs,
and contingencies. By breaking down the project into smaller components, the cost planning process
will enable a more accurate estimation of costs.

The Agenagn Housing Project encompasses the following project components:

a. Personnel

b. Infrastructure

c. Software Development

d. Marketing

e. Training

f. Insurance

g. Miscellaneous

Cost Management:

Cost management is the ongoing process of monitoring, controlling, and optimizing project costs to
ensure that they remain within the approved budget. It involves implementing strategies and techniques
to minimize cost overruns, maximize cost-effectiveness, and deliver value for money. It is evident that
there are significant shortcomings that have resulted in poor cost performance. This report aims to
highlight the key issues in the project.

Inappropriate Use of Company Income:

One of the major contributing factors to the poor cost performance in the Agenagn Housing Project is
the inappropriate use of company income for personal purposes. It has come to my attention that some
individuals involved in the project have been utilizing company funds for personal expenses, which has
led to a misallocation of financial resources.
Insufficient Cost Control Measures:

Another significant problem contributing to the poor cost performance is the lack of effective cost
control measures. The project team has not implemented adequate mechanisms to monitor and control
project expenditures. Without proper tracking and analysis of costs against the approved budget, it
becomes challenging to identify cost deviations and take timely corrective actions. This lack of cost
control measures has resulted in cost overruns and an overall disregard for financial discipline.

Inaccurate Cost Estimation:

Furthermore, the Agenagn Housing Project has suffered from inaccurate cost estimation practices. The
initial cost estimates provided for various project activities and deliverables were not based on reliable
data and industry benchmarks. This lack of accuracy in cost estimation has led to unrealistic budget
allocations and a subsequent mismatch between the allocated funds and the actual costs incurred. As a
result, the project has faced financial constraints and struggled to deliver value for money.

To illustrate the extent of the cost management issues in the Agenagn Housing Project, we have
prepared a cost report table that outlines the budgeted costs, actual costs, and variances for key project
components. The table below provides a snapshot of the cost performance for the first 6 months of the
project.

Project Component Budgeted Cost Actual Cost Variance

Personnel 1,440,000 1,440,000 0

Infrastructure 670,000 840,000 170,000

Software Development 560,000 560,000 0

Marketing 450,000 660,000 210,000

Training 50,000 110,000 60,000

Miscellaneous 30,000 88,000 58,000

Total 3,200,000 3,698,000 498,000

As evident from the cost report, there are significant variances between the budgeted and actual costs
for each project component. These variances indicate a lack of effective cost control and highlight the
need for immediate corrective measures. The project team should adopt more accurate and reliable
cost estimation techniques based on historical data
1.4 Roles and Responsibilities in the Project:

The specific roles and responsibilities may vary depending on the project's size, complexity, and
industry. Here are some common roles and their associated responsibilities:

 General Manager and deputy manager

-Represent the company at any legal situations.

-Follow each section of the organization performance.

- Handle all human resource related issues.

- Perform the work stated under finance and marketing section including the clerical works. If the
company able to hire officers appointed for both sections the Managers will continue follow up.

- They are responsible to make the operation run in the normal flow.

- Beside the marketing control the managers are responsible to handle data administration issues.

- Petty cash handling.

 Finance and accounts

-Invoice administration

-Petty cash replenishment

-Bank statement reconciliation

-Preparing monthly tax report related issues and report to the authority in person.

- Follow the registration fee payment from technical support professional listed in our platform.

- If the payment is not fulfilling, this section of the company is responsible to inform for operation
department for appropriate action.

 Marketing
 Social media marketing

Promote the idea of the company on social media and natural search engines like Google. Try to be
available where ever on social media users located in Addis Ababa.

*Facebook * Instagram

*Telegram * Messenger

 Formal advertisement
-Broadcasting promotion on the selected TV and radio channels

- Billboard

- Brochure and flyer

-Posting Ads.

 Operation (call center)

Property Sell and rent

-The call agent expected receive a call select the customer interest then register it in the developed
data management archive.

- The call agent also responsible to respond to the customer as per the request.

-Always the call agent expected to treat the customer politely no matter what.

- The minimum minute the call agent keeps the customer in line is two minute.

Other companies outsourced service

-Search service can be launched for some specific out bounded calls. The call agents are also segregated
to such duty.

- This work mainly proposed by Agenagn PLC handle their work like Tele marketing and information
related issues.

2. Cost Planning

Cost planning is an essential aspect of the Agenagn Housing Project, aiming to establish a systematic
approach for estimating, allocating, and controlling costs throughout the project lifecycle. The primary
objective of cost planning is to develop a comprehensive budget that aligns with the project's objectives
and constraints. This involves identifying and quantifying all relevant costs associated with the
development and operation of the digital platform for property transactions.

To effectively plan costs, the project team conducts a thorough analysis of all project activities and
deliverables. This analysis will help in estimating the resources, materials, and labor required for each
task. The team will also consider any indirect costs, such as overhead expenses, administrative costs,
and contingencies. By breaking down the project into smaller components, the cost planning process
will enable a more accurate estimation of costs.

Cost Baseline: The cost baseline refers to the approved budget for the Agenagn Housing Project, which
serves as the reference point for comparing and controlling project costs. It represents the estimated
costs for each project component, including personnel, infrastructure, software development,
marketing, training, and miscellaneous expenses. The cost baseline provides a benchmark against which
actual project expenditures are measured to determine if the project is on track financially.

3. Cost Management:

3.1 Expenditure Tracking:

Expenditure tracking is a critical component of effective cost management. It involves monitoring and
recording all project-related expenses to ensure accurate and up-to-date financial information. By
diligently tracking expenditures, project managers can identify potential cost overruns, assess the
utilization of resources, and make informed decisions regarding budget allocation. Agenenagn housing
uses excel for invoicing, time tracking, and budget controlling purpose.

3.2 Cost Control and Changes:

Cost control and changes play a vital role in managing project costs within the approved budget. This
involves closely monitoring project activities, identifying deviations from the baseline cost plan, and
implementing appropriate measures to control and mitigate these changes.

3.2.1 Reconciliation:

Reconciliation is an essential step in cost management, ensuring that financial records align with project
activities and actual expenditures. This process involves comparing the recorded expenses with
supporting documentation, such as invoices, receipts, and purchase orders, to ensure accuracy and
completeness. Agenagn Housing reconciliation mainly focus the collection from Ethio-Telecom short
code call income.

3.2.2 Cost Variance:

Cost variance analysis is a valuable tool for understanding the deviations between actual project costs
and the budgeted amounts.

Project Component Budgeted Cost Actual Cost Variance

Personnel 1,440,000 1,440,000 0

Infrastructure 670,000 840,000 170,000

Software Development 560,000 560,000 0

Marketing 450,000 660,000 210,000

Training 50,000 110,000 60,000

Miscellaneous 30,000 88,000 58,000

Total 3,200,000 3,698,000 498,000

3.3 Expenditure Reports and Metrics:

Expenditure reports and metrics provide valuable insights into project spending patterns and financial
performance. These reports summarize project expenses, budget utilization, and cost metrics in a clear
and concise manner. As we have checked the project cost management it is clear that Agenagn Housing
has never examine the cost in a proper manner due to lack of proper attention for the financial issues.
The management of the project mainly focused on the platform performance and the call center
operation.

3.4. Recommended Cost Management Practices

Recommended Cost Management Practices for the Agenagn Housing Project:

Create a detailed cost management plan that outlines the approach for estimating, monitoring, and
controlling costs throughout the project lifecycle. The plan should include strategies for cost estimation,
budget allocation, cost tracking, and variance analysis.

Use reliable data and industry benchmarks to estimate costs for each project component. Break down
the project into smaller tasks and analyze resource, material, and labor requirements for accurate cost
estimation. Consider indirect costs, overhead expenses, and contingencies to ensure a comprehensive
budget.

Establish effective mechanisms to monitor and control project expenditures. Regularly track expenses
against the approved budget and analyze cost deviations. Implement corrective actions promptly to
mitigate cost overruns. Ensure financial discipline and prevent inappropriate use of company income for
personal purposes.

Maintain a system for tracking and recording project-related expenses. Reconcile financial records with
supporting documentation, such as invoices and receipts, to ensure accuracy and completeness.
Regularly review and update expenditure records to provide an accurate financial picture.

Conduct regular cost variance analysis to understand the deviations between actual project costs and
the budgeted amounts. Identify the reasons behind cost variances and take appropriate actions to
address them. Use cost variance analysis as a tool for informed decision-making and continuous
improvement.

Generate Expenditure Reports and Metrics: Prepare regular expenditure reports that summarize project
expenses, budget utilization, and cost metrics. Use these reports to assess project spending patterns and
financial performance. Share the reports with stakeholders to provide transparency and accountability
in financial matters.
Continuously improve cost estimation techniques by incorporating lessons learned from previous
projects. Analyze historical data and industry trends to enhance the accuracy of future cost estimations.
Regularly update the cost management plan to reflect refined estimation techniques.

Establish a governance framework that ensures proper financial oversight and accountability. Clearly
define roles and responsibilities related to financial management. Implement effective financial controls
and internal auditing processes to prevent misuse of funds and ensure compliance with financial
regulations.

Foster open communication and collaboration among project team members, stakeholders, and
departments involved in financial management. Regularly review and discuss cost-related issues,
challenges, and opportunities. Encourage cross-functional collaboration to optimize resource allocation
and cost-effectiveness.

Regularly monitor and evaluate the effectiveness of cost management practices implemented in the
project. Identify areas for improvement and implement necessary changes to enhance cost control,
accuracy in estimation, and overall financial performance.

By implementing these recommended cost management practices, the Agenagn Housing Project can
effectively allocate and utilize financial resources, track and control project costs, and improve financial
performance. These practices will contribute to the project's success by ensuring financial discipline,
resource optimization, and the delivery of value for money.
 Formats

Source of finance report for the Agenagn Housing Project:

| Source of Finance | Amount (in USD) | Percentage (%) |

|-----------------------------------|-----------------------|----------------|

| Al-Mel Trading own equity | [Amount] | 60% |

| Harbu Microfinance institution | [Amount] | 40% |

|-----------------------------------|-----------------------|----------------|

| Total | [Total Project Cost] | 100% |

This table format provides a clear breakdown of the sources of finance and their respective percentages
for the Agenagn Housing Project.
Earned Value Status Report for Agenagn Housing Project

Project Budgeted Actual Earned Schedule Cost

Component Cost Cost Value Variance Variance

[Budgeted [Actual [Earned [Schedule [Cost

Staff Cost] Cost] Value] Variance] Variance]

[Budgeted [Actual [Earned [Schedule [Cost

Infrastructure Cost] Cost] Value] Variance] Variance]

Software [Budgeted [Actual [Earned [Schedule [Cost

Development Cost] Cost] Value] Variance] Variance]

[Budgeted [Actual [Earned [Schedule [Cost

Marketing Cost] Cost] Value] Variance] Variance]

[Budgeted [Actual [Earned [Schedule [Cost

Training Cost] Cost] Value] Variance] Variance]

[Budgeted [Actual [Earned [Schedule [Cost

Miscellaneous Cost] Cost] Value] Variance] Variance]

[Total [Total [Total [Total

Budgeted Actual Earned Schedule [Total Cost
Total Cost] Cost] Value] Variance] Variance]

Explanation of Terms:

 Budgeted Cost: The initially planned cost for each project component.

 Actual Cost: The actual cost incurred for each project component.

 Earned Value: The value of work completed or earned for each project component, based on
the project's progress.

 Schedule Variance: The difference between the Earned Value and the Planned Value, indicating
whether the project is ahead or behind schedule.

 Cost Variance: The difference between the Earned Value and the Actual Cost, indicating
whether the project is under or over budget.

 Total Budgeted Cost: The sum of all budgeted costs.

 Total Actual Cost: The sum of all actual costs.

  Total Earned Value: The sum of all earned values.

 Total Schedule Variance: The sum of all schedule variances.

 Total Cost Variance: The sum of all cost variances.

Project Cost Baseline for Agenagn Housing Project

Project Component Budgeted Cost

Personnel [Budgeted Cost]

Infrastructure [Budgeted Cost]

Software Development [Budgeted Cost]

Marketing [Budgeted Cost]

Training [Budgeted Cost]

Miscellaneous [Budgeted Cost]

Total [Total Budgeted Cost]

Explanation:

 Budgeted Cost: The initially planned cost for each project component.

 Total Budgeted Cost: The sum of all budgeted costs.