What is Construction Audit?
Construction projects are often complex and expensive, and a financial audit can help to ensure that they are managed effectively and efficiently. A construction financial audit is a review of all the financial aspects of a construction project. A construction financial audit safeguards project finances, ensures efficiency, and prevents errors and fraud by identifying and fixing mistakes and omissions, helping projects stay on budget and schedule.
As parts of our construction audit services, Property & Building Assessment is offering you help with creating pre-construction cost audit reports and progress claim assessments. We would be happy to discuss your needs and provide you with a quote.
What is Included in Construction Auditing Services?
Construction auditors typically offer the following types of services:
- Reviewing construction contracts
- Analyzing project costs
- Monitoring progress claims
- Identifying and mitigating risks
- Conducting financial assessments
Construction audit services help by ensuring contract compliance, controlling costs, verifying payment accuracy, managing risks, and conducting financial assessments to protect stakeholders' investments and project efficiency.
Preconstruction Cost Audit Reports
Preconstruction cost audit reports are a valuable tool for making sure that construction projects in Australia, Sydney are completed on time and within budget. The report helps to assess the financial viability of a project and identify any potential finance risks or areas where project costs could be saved. It usually includes a project's budget overview, project's schedule, scope, an evaluation of its risks, the identification of potential cost savings, and recommendations for project's risk mitigation.
Financiers can rely on Property & Building Assessments to deliver comprehensive preconstruction reports which include:
- Review of the proposed construction contract, conditions, and security
- Assessment of documentation adequacy
- Evaluation of Builder and Project Consultants' capability
- Suitability of contract for pre-sale/pre-leasing contracts
- Reviewing of the development program
- Analysis of development cashflow forecasts
- Independent estimate of construction costs
- Review of allowances for various costs
- Consideration of site-specific conditions affecting costs
- Commenting on the status of authority approvals and attached conditions
- Commenting on the degree of completion of design documentation
- Preparing a schedule of Project Consultants and providing copies of professional indemnity insurance
- Evaluation of project insurances
- Highlight any specific project risk
The City of Sydney requires that construction projects exceeding $10 million must undergo the preparation of a preconstruction cost audit report.
Progress Claim Assessments
A progress claim assessment involves reviewing the contractor's work schedule and progress, assessing incurred costs, and calculating the owed payment to the contractor based on the completed work. This can help to ensure that the project is completed smoothly and that everyone involved in the project is paid fairly. Progress Claim Reports are generally prepared addressing the following:
- Assessment of the progress claim submitted by the Contractor
- Certification of the value of work complete, including fixed materials on-site
- Review and update the forecast development and construction costs
- Certification of the cost to complete
- Comparison between actual expenditure to date and anticipated cashflow
- Comment upon the progress of the works and provide an independent assessment of the likely project completion date
- Summary of status of variations and claims
- Verify that claims from Sub-Contractors and Suppliers have been paid in accordance with their contracts
- Advise on the ongoing status of approvals and permits
- Obtain certification from Design Consultants that the works are proceeding in accordance with the relevant documentation and approvals
- Confirm status of project insurances.
- Advise on issues of risk
- Attend additional meetings and site inspections as necessary for the above.
How Can Construction Financial Audit Help Your Project?
A study conducted by the Australian Institute of Quantity Surveyors discovered that construction financial audits can save an average of 5% of the total project costs.
Financial auditing will facilitate managing your construction project from a financial point of view. The quantity surveyor will help you verify the cost for your specific project to keep track of the project expenses. Finally, you'll understand what you are spending so that you can stay within your construction budget. A Quantity surveyor can, if needed, work with other members on your project, such as project managers, to assess any risks beforehand so that you can take care of them instantly. Construction audit can also help in fraud prevention, reducing the risk of disputes, improving communication between all stakeholders and enabling stakeholders to monitor their investment expenditures.
Do You Need Construction Audit Services for Your Project?
If you have a big construction project coming up, then you should probably hire an auditor to help you get your project on track. An auditor can analyse the project's finances from different angles, and therefore, help avoid frauds and overcharges. Moreover, an auditor can help you meet your project goals and reduce costs.
How to Find The Right Construction Auditor for Your Project?
To find the right construction auditor for your project, seek recommendations and research potential auditors. Consider your specific needs and obtain multiple quotes for price and services from different quantity surveyors in your area. Ensure the auditor is qualified and registered, and secure a written agreement from them defining the scope of work, fees, and timeline.
Why Work With Property & Building Assessments?
With more than 20 years of relevant industry experience, PBAQs is a construction auditing company with numerous construction projects under our belt. Our experts will be happy to help you with auditing your construction projects. Contact us to discuss your business needs, and we will be happy to help you with the construction audit.
Where to Find Us?
You can find us at 29 Kiora Road, Miranda NSW 2228. Feel free to contact us today at (02) 9522 6407 or send us a message using the form below.