PROJECT FUNDS MANAGEMENT FOR OPTIMAL COST CONTROL

Abstract

Various options are available for funding of projects, depending on the financial antecedents of the project promoter. Most states and the Federal Government of Nigeria depend on monthly allocations from the Federation Account as the major source of project funds. In a few instances, bulk funds may be available from financiers such as multilateral development agencies, the banks or the stock market. This paper examines the effect of adopting particular funding arrangements on the final cost of projects. It recommends that project-executing departments should do more financial analysis before committing their organisations to a particular mode of funding. Advance payment should be given but these must be tied to aspects of the project so that the client can benefit optimally from the funding arrangement. Contractors also need to seriously consider how their funds are applied so that they can increase their profitability.