Difference between project appraisal and project evaluation?

Answer 1

The primary goal of a project evaluation (appraisal) is to offer information on the outcomes and to improve the quality and efficiency of project management. The goal of the mid-term review is to assess the first results and give recommendations for adjustments that will help the project meet its goals.

Answer 2

Differentiate Between Project Appraisal and Evaluation:

• An appraisal requires both an analysis of the property’s highest and best use, as well as a summary of the logic and rationale behind that analysis within the report. There is no such requirement in an evaluation.

• An appraisal requires an analysis of reasonable exposure time, as well as its statement within the report, but not in an evaluation.

• Currently, an appraisal can present in only one of two formats, an Appraisal Report, or a Restricted Appraisal Report. An evaluation has no such requirement.

• USPAP requires an appraisal to be credible. The IGs require an evaluation to be reliable. However, the IGs do not define reliable, which USPAP defines as credible as worthy of belief. The two terms are not synonymous.

Who is qualified to perform evaluation? Section VI of the IGs carries the title “Selection of Appraisers or Persons Who Perform Evaluations.” According to the qualifications listed as necessary for persons to do appraisals or evaluations under the IGs, the work performed must be periodically reviewed by the client institution. The person selected must also:

• Possesses the requisite education, expertise, and experience to competently complete the assignment.

• Be capable of rendering an unbiased opinion.

• Be independent and have no direct, indirect, or prospective interest, financial or otherwise, in the property or transaction.

• Hold the appropriate state certifications or license at the time of the assignment, if they are an appraiser. Persons who perform evaluations should possess the appropriate appraisal or collateral valuation education, expertise, and experience relevant to the type of property being valued.

Since federal banking regulators do not consider evaluations to be appraisals, there is the question of who will enforce evaluations as state appraisal boards enforce USPAP Standards. Putting this question to those who are in the positions to know revealed that nobody has an answer to that question.

Therefore, appraisers should have the opportunity to choose to perform or not perform evaluations, just as they are free to perform, or not perform, any of the [various] types of appraisal services. One of the differences right now between an appraisal and an evaluation is an appraiser does not have the freedom to perform evaluations despite the fact that those less qualified to do so now provide those services. How much sense does that make?

Answer 3

Diffence between project appraisal and project monitoring