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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






McGovern & Greene LLP
Chicago Office: 200 W. Jackson Blvd. Suite 2325 Chicago IL 60606 — PH: 312.692.1000
Las Vegas Office: 2831 St. Rose Parkway Suite 285 Henderson NV 89052 — PH: 702.818.1168
Naperville Office: 190 E. 5th Ave.Suite 23 Naperville IL 60563 — PH: 312.692.1000
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