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

© 2010 McGovern & Greene LLP