CONTROL ACCOUNT: EVMS

When Earned Value Management Systems (EVMSs) are implemented, an important WBS element referred to as a Control Account (CA) is identified. The WBS is a key component of EVMSs; in fact, the system cannot be implemented without a WBS. Further discussion about this subject is included in Chapters 7 and 8. Control accounts are frequently established at the level above work packages, where specific organizational entities can be identified as responsible for the work to be performed.

EVMSs define the CA as the management control point at which budgets (resource plans) and actual costs are accumulated and compared to earned value for management control. A CA is a natural point for planning and control because it represents the work assigned to one responsible organizational element on one WBS element.

The organizational breakdown structure (OBS) reflects the way the project is functionally organized. To assign work responsibility to appropriate organizational elements, the WBS and the organizational structure must be interrelated with each other; that is, organizational responsibility must be established for identified units of work. The assignment of lower-level work segments to responsible lower-level managers provides a key control point for management purposes and cost collection. This is the CA. As we see in Chapter 8, in large construction projects each subcontractor is often identified as a CA and each control account contains many work packages.

The CA is the main action point for planning and controlling effort. All aspects of the system come together at this point, including budgets (resource allocations), schedules, work assignments, cost collection, progress assessment, progress payments, problem identification, estimates at completion, and corrective actions. The proper levels for CAs are not just an arbitrary determination based on an across-the-board single level of the WBS, but should be located at levels consistent with the project’s method of management and natural structure.

The effort within a CA is distributed into work packages, sometimes called planning packages. Planning packages are used for far-term efforts where it may be premature to identify specific work packages but it is necessary to account for all the funds available for baseline planning purposes. Eventually, all work in planning packages will be planned and scheduled to the appropriate level of detail in work packages and identified in the WBS before work commences.