Contracts and Commercial Consulting

Construction Activity Audit Program

A comprehensive audit program offered by McGovern & Greene LLP was prepared for use with typical lump sum and GMP (Guaranteed Maximum Price) contracts with prime contractors and subcontractors. Procedures related to verifying a contractor’s “cost of work” (such as direct labor, material purchases and rental charges) are normally applied to cost-reimbursement type contracts.

Our professionals will apply specific task-oriented audit tests tailored to selected transactions subject to review.

Audit Program Outline:

·        Bid Review

·        Contract Review

·        Risk Assessment

·        Control Systems Review and Recommendations

·        Contractor Billing Tests – Progress Billings

- Labor

- Materials

- Equipment (owned and rented)

- Subcontractor charges

- Permits and licenses

- Miscellaneous charges (small tools and consumables)

- Overhead charges

- Contractor fee

- Retainage calculation

- Performance bond and insurance

- Home office charges

- Physical inspection and review of engineering inspection reports

- Travel

·        Change Orders Pricing Review

- Labor and labor burden

- Labor productivity factors

- Material quantity and pricing

- Indirect cost application

- Subcontractor “buy-outs” verification

·        Delay and Disruption Claims Examinations

·        Control Systems Verification

·        Financial Review

- Control schedules

- Receivables

- Payables

- Construction in Progress

For more information on Contracts and Commercial Consulting Services,
please contact Jim McGovern.