A Study of Financial Management Obstacles in Construction Projects

Abstract

This research aimed to study the causes of financial management obstacles in construction projects. Risk management tools were applied to find and classify the types of issues; including risk factors affecting financial management in construction projects of the owners’ agencies, construction contracting agencies, and construction consulting agencies. The methodology started by collecting the data of obstacles and risk factors affecting financial management based on the review of related literatures. Then, the factors affecting financial management in construction projects were analyzed to provide a guideline to interview experts with experience in construction management in several public and private agencies. After that, value at risk (VaR) was calculated, along with the designed table of the effects of risks and a chance of probability for the effects on financial management, based on the primary data of the interview. Further analysis was conducted by creating a fault tree diagram to find the causes and relationship of those causes leading to the situation of risks more comprehensively and clearly. The findings from the research is delayed approvals, lack of knowledgeable personnel in auditing work, project personnel unable to recognize financial information such as budgets, costs or profits due to the company's policy, disorders in internal communication within the organization and the construction project  is unable to know the current expenses and  to follow up the project budget. The knowledge obtained from the data analysis may be applied as a guideline on management and solution to reduce financial management obstacles in construction projects in the future.