Decisions are prudent if made in a reasonable manner in light of conditions and circumstances which were known or reasonably should have been known when the decision was made.
Prudent decisions are those made in the light of this definition, a definition developed by Pegasus-Global over years of testimony, research, and real-time experience. It is a difficult concept to quantify without a proven framework from which to define your activities. How do you convince a prospective client, investor, or oversight entity that your company has been operating prudently? What are your present internal guidelines for making prudent decisions?
Pegasus-Global's experience with megaprojects and engineering, construction, and operations as it relates to performance of prudence and performance/management review/audits is extensive and spans more than 30 years. Pegasus-Global will provide an analysis of your prudence processes and determine whether or not your decision-making processes will stand the test of the inquiry and discovery processes that invariably occur in megaprojects.
Audits are conducted for many purposes, ranging from providing "reasonable assurance" of accounting practices and financial reporting to project management performance and construction execution, including quality of welds and potential risks. Thus, not all audits focus on decision-making and may focus on other aspects that do not relate directly to prudency. Audits are merely one of a selection of sources of information that an owner should and does take into account in making decisions.
Pegasus-Global conducts all of its audit services in accordance with Generally Accepted Government Auditing Standards (GAGAS) (the Yellow Book Guidelines), examining the economy, efficiency, and effectiveness of the policies, management, fiscal affairs, and operations of state and local governments, as well as state agencies, regulated utilities, and private companies.
With respect to the utility industry, while the current State regulatory environment is similar to that experienced previously by utilities constructing power plants, the fact is that since the 1980s, commissions have continued to apply the prudence standard to not only nuclear plants, but also to many other capital expenditures which utilities wish to include in their rate base. Pegasus-Global personnel involved in those early nuclear prudence audits have continued to work with utilities and commissions through to present day, which provides Pegasus-Global and our clients with the depth and continuity of experience unequaled in the construction industry today. As a pioneer in prudence auditing, Dr. Patricia D. Galloway has led the utility industry in defining prudence audits since 1982, which is one of the many reasons that Pegasus-Global is recognized as a global industry leader in benchmarking measures required to successfully present and defend the prudency of decisions undertaken by its clients.
With respect to the infrastructure industry, governments and government agencies are having to construct major megaprojects with tighter budgets to ensure tax dollars are expended efficiently to deliver projects within the proposed budget and schedule. Performance audits are becoming a critical necessity to evaluate the project's management structure, personnel, execution plans, policies, procedures, risks, and financial viability. Pegasus-Global has been conducting performance audits on major capital programs throughout the world to provide government and government agencies with the necessary recommendations to enhance the probability of project delivery success.