Why it Matters
Approximately 5% of commercial construction projects are audited. This means the majority of projects operate with unchecked vulnerabilities, leaving owners exposed to overcharging, overspending, and costly errors.
Construction projects are inherently complex, with numerous stakeholders, intricate contracts, and substantial budgets. There are countless opportunities for mistakes to occur. Invoices may include hidden markups, miscalculated costs, duplicate charges, or unauthorized expenses. Without oversight, these errors often roll downhill—straight to the owner’s bottom line.
Unchecked processes in the areas of contracts, negotiating, budgets and auditing can lead to financial losses, strained relationships, and project delays. Our services protect your project, streamline operations, and deliver the accountability needed for project success. It’s not just about identifying errors—it’s about preventing them from happening in the first place. We are in the business of protecting your commercial construction project.
C&M can help protect you from:
- Lack of Oversight: Construction projects often involve multiple stakeholders, complex contracts, and layers of subcontractors, creating numerous opportunities for overbilling, errors, and financial mismanagement.
- Frequent Disputes: Misunderstandings about costs, change orders, and contract terms often lead to disputes, which can result in financial losses for owners and strained relationships among parties.
- Hidden Costs and Errors: Without proper audits and financial controls, projects are susceptible to hidden markups, duplicate charges, inflated overhead, costs billed on estimates vs actuals, and unauthorized expenses, which can escalate project costs significantly.
- Lack of Transparency: Many project owners lack visibility into how funds are being used, making it challenging to ensure fairness and financial integrity.
Why perform a construction audit?
The main purpose for any construction audit is to ensure all costs are fair, accurate and within the guidelines of the contract between the General Contractor and the Owner.
What does an audit achieve?
An audit will help the owner control costs, reduce risk and identify process improvements. Additionally, fiscal accountability to shareholders, employees, and the project team is achieved.
How is an audit completed?
We have established relationships with most large, and many smaller, general contractors in the metropolitan area. Throughout the audit process we work very hard at preserving these relationships and serve as a liaison between the contractor, owner and all parties involved on the project.
Why hire an outside consultant?
An outside consultant will be objective in approaching both outside vendors and inside company employees. Additionally, hiring an outside consultant saves your company money. You don’t have the overhead and salary costs to carry an employee all year long, rather only for the period of the project.
A Construction Auditor also knows where contractors have hidden profit centers and have a good knowledge of the construction process.
What Types of Audits can C&M Perform?
- Monthly or prospective
- Quarterly or milestones
- Post project or retrospective
What are the Components of a Sound Construction Audit?
- Precontract review
- General conditions
- Supervisory staff hourly rates
- Trade labor rates, including fringe benefits, taxes, insurances, overhead and profit.
- Contractor-owned equipment charges
- Third party rental equipment charges
- Job purchased equipment
- Insurance and bonds
- Bidding strategy, including recommendations on bid breakdowns, unit rates, labor rates, mark-ups, etc
- Subcontracts review
- Verify receipt of lien waivers
- Self-performed labor records, productivity and charges
- Material purchases and discounts
- Small tools and consumables
- Mark-ups
- Allowances
- Schedule of values
- Payment applications
- Invoice review
- Subcontractor payment applications
- Tax rates and exemptions
- Change order pricing