Our construction costs audit team knows the entitlement and construction process. The team, which is comprised of accountants and project managers, has extensive experience in the contract buy-out process, change order analyses, the review of contractor payment requisitions, and the determining of appropriate general condition costs.

Our services complement our client’s team by augmenting the systems of checks and balances to:

• Verify that stated monies (direct and indirect costs) were, in fact,
  invested in the project during the entitlement, and pre-construction,
  and construction phases;
• Reconcile costs to the contract documents;
• Identify inappropriate costs invoiced to the project; and
• Identify accounting errors of duplicative or over payments.

Often, the GC’s or CM’s contract administrators are not informed in regard to the specific terms of the contract that pertain to the permitted reimbursable costs, shared buy-out savings, and allowances. As a result, accounting errors are sometimes made that can result in overcharges to the owner or joint venture partner.

If entering an investor/developer joint venture agreement, there may be questions or discrepancies regarding monies that were actually invested by one of the parties. Furthermore, a construction cost audit often alerts an investor to change orders that may significantly impact the project’s quality or ongoing operational expenses. IVI’s auditing services will set the record straight.

Many clients use monthly construction cost auditing services throughout the construction phase as a management tool. Our monthly reports keep clients proficiently informed as to charge-backs; change orders funding, scope changes, and implementation of subcontractor proposed alternates before such issues surface at the end of the project. Once participants know that every direct and indirect cost is examined, there is a tendency to allocate costs more carefully to the project.

Typical Overcharges Identified by IVI:

• Allowances not adjusted to actual cost
• Excessive payroll burden charges
• Unapproved, less costly material/equipment substitutions unilaterally implemented by the contractor without a credit adjustment to the owner
• Home office or another project’s payroll costs charged as a job cost
• Cumulative or excessive equipment rental rates that exceed the fair market value of the equipment
• Re-work and repair costs included as a reimbursable job cost
• Excessive general condition costs for field office equipment, computers, and copies when less costly or used equipment would have sufficed
• Undistributed subcontract savings that were to be shared between the owner and contractor
• Duplicate and/or erroneous charges by the contractor
• Back charges or credits not returned to the owner for work required, but not performed by the subcontractor
• Duplicative or erroneous allocations of indirect costs
• Credits for insurance coverage and performance bonds not purchased by the contractor or subcontractor.