6.2 Recasting the data

Collected data or budgeted data should be recast before they are compared. The significant time gap and a host of factors, which were not considered at the budgeting stage, would warrant the recasting of data. For example, inflation should be adjusted before comparison is made. Sales mix difference due to external factors also should be taken into account. In the absence of adjustment for those "external" factors, the quality of audit would suffer. Inflation adjustment is subsequently into results.

### 6.3 Comparison of projected financial parameters with actual

This is the next important step in the post completion audit procedure. There are four techniques available for the comparison of actual with the projected financial parameters. The comparison is the starting point from which the real audit begins. Only comparable data is compared. Adjustments are first done for inflation and external factors before comparison is carried out under any method. Methods

Economic Aspects of Building Energy Audit DOI: http://dx.doi.org/10.5772/intechopen.85490

7. Inventory energy use—prepare a list of all energy consuming loads in the audit area, and quantify their consumption and demand characteristics; 8. Identify energy management opportunities—including operational and

9. Assess the benefits—quantify the level of energy and cost savings, along

10. Report for action—report the audit findings and communicate as required

Each step involves a number of tasks that are described in the following sections. As suggested by the flow chart, several of the steps may result in the identification

Patel [4] did an extensive investigation on this subject matter. Patel [4] work noted that the auditor of the completed project has to be very careful in carrying out the audit. He must follow some procedure so that full justice is done to the work.

The starting point for collecting post audit information is the project completion report. Energy audit generally compares the projected data with the accounting data collected through the regular MIS. The MIS needs to be geared up so that the projected cash flow from the original capital budget can be compared with the actual cash flows realized during the period elapsed before the energy audit of the project has started. Another point that needs to be kept in mind is that the auditor needs to collect total cost figures. Incremental cash flow figures are readily available for green-filled projects but it is not so easy for the projects in an existing plant. The data in the latter case need to be appropriately dealt with to arrive at the incremen-

Collected data or budgeted data should be recast before they are compared. The

This is the next important step in the post completion audit procedure. There are four techniques available for the comparison of actual with the projected financial parameters. The comparison is the starting point from which the real audit begins. Only comparable data is compared. Adjustments are first done for inflation and external factors before comparison is carried out under any method. Methods

budgeting stage, would warrant the recasting of data. For example, inflation should be adjusted before comparison is made. Sales mix difference due to external factors also should be taken into account. In the absence of adjustment for those "external" factors, the quality of audit would suffer. Inflation adjustment is subsequently into

significant time gap and a host of factors, which were not considered at the

6.3 Comparison of projected financial parameters with actual

Some points related to the energy audit procedure are described below.

technological measures to reduce energy waste.

with any co-benefits.

Zero and Net Zero Energy

for implementation.

6. Economics of building energy audit

6.1 Collection of appropriate information

tal cost figures due to [4].

6.2 Recasting the data

results.

140

of potential EMOs.

described later on are not mutually exclusive. More than one method may be applied for comparison if there is such a requirement. A broad level ROI or NPV comparison can be done initially, followed by detailed cost variance or cash flow variance analysis. Comparison is a step-by-step approach so that causes are identified systematically with minimum cost, time and energy [4].

$$\begin{aligned}ROI &= \frac{Net\text{ income}}{\text{Cost of Investment}} \\\\ &= \frac{\text{Investment gain}}{\text{Investment base}} \\\\ &= \frac{\text{Gain from investment -- cost of investment}}{\text{Cost of Investment}} \\\\ &= \frac{\text{Return(Benefit)}}{\text{Investment (cost)}} \end{aligned}$$

Investment cost ð Þ

#### 6.4 Establish the possible causes of variance

Once the variance figures are calculated, if they are significant, the possible causes for the same are explored. An auditor goes by exceptions from there he tries to reach the root causes of deviations. This process of investigation can be effective only if an auditor possesses skills of inquisitiveness and skills of persuasion and negotiation [4]. A summary report of the energy audit findings should also be prepared.

#### 6.5 Final recommendations

Once the causes are ascertained, the post completion auditor can give his recommendations based on which the manager may take decisions for cash flow forecasting to reinvest or abandon the ongoing project. Hopefully, after the post completion audit, the cash flow prediction and project evaluation become more accurate [4].

#### 7. Building energy audit economic techniques

There are three techniques of building energy audit economics, namely


#### 7.1 Cost variance analysis

In this method, only the project cost (actual and estimated) is studied and the revenue aspect is not included in the audit. This approach is adopted when the energy audit is conducted during the execution or just after the completion of the project.

CV [Earned Value (EV) Actual Cost (AC)] EV = % of worth completed x Budgeted cost AC = what has been spent on the project
