Construction financial and technical audit

Construction audit is an independent examination of engineering and financial and economic components of construction, aimed at obtaining an objective picture and identifying current project indicators.

During the audit, a holistic systematic study of the value of the object is carried out and the parameters of pricing and the formation of the value of the object are analyzed at each stage of construction, finishing and repair works.

The technical side includes checking the quality and scope of work performed, examining project documentation and monitoring compliance with current legislation, and the financial side allows you to compare completed construction and installation work with the design and estimate documentation and the project budget.

When is an independent construction financial and technical audit conducted?

An independent financial and technical construction audit is needed:

  1. when purchasing an investment and construction project at the construction stage and conducting a high-quality, comprehensive analysis of the work performed and work to be carried out to make a decision on the acquisition of an asset.
  2. as a dispute resolution mechanism: an investor-co-investor, a developer-general contractor, a developer-bank, and so on.
  3. when the investor checks his project, reducing risks and increasing the efficiency of implementation
  4. as a means of supervision of the bank for the development of allocated credit funds.
  5. as a way for an investor to ensure maximum transparency and manageability of the construction process

What is included in the construction financial and technical audit?

Construction financial and technical audit includes:

  • Analysis of title documents;
  • Analysis of the composition of the initial permissive documentation, the availability of necessary permits and approvals
  • Analysis of design and working documentation for completeness, applied solutions. Verification of the compliance of IRD documentation, examination conclusion and design solutions.
  • Analysis of contracts concluded with contractors and the fulfillment of their contractual obligations;
  • Analysis and examination of design and estimate documentation;
  • Examination of the volume of work performed. Comparison with performance data from the contractor. Analysis of the scope of work required to complete the construction.
  • Analysis of the correctness and quality of the organization of the construction industry: the presence and maintenance of work logs, assessment of the actions of building control and field supervision, compliance with safety procedures, etc .;
  • Analysis of the quality of work performed. Evaluation of the organization of the quality control system at the facility and its work;
  • Verification of compliance of the applied materials and equipment with design solutions;
  • Analysis of compliance with construction deadlines, project implementation schedule, identification of deviations and their causes.
  • Audit of cost, comparison of values ​​of actually performed works, presented for acceptance and accepted, paid works. Estimate the cost required to complete the construction. Identification of misuse of funds.
  • Verifying the correct use of financial resources - monitoring completed, accepted and paid amounts of work. Control of non-exceedance of the cost of used materials and equipment of average market indicators.

What is the result of a construction financial and technical audit?

The result of a construction financial and technical audit is an independent expert opinion in the form of a Report outlining the information received, with calculations of substantiating materials, recommendations on the measures necessary to eliminate the identified deficiencies and management factors influencing the successful implementation of the investment project.

Documents required for the financial audit of construction

  1. full package of permitting, title and project documentation;
  2. approved construction estimates;
  3. executive technical materials (work logs, acts of carrying out hidden work and testing of engineering networks and communications, geodesic schemes);
  4. reporting documents confirming the cost and volume of work performed and materials: certificates of the cost of work and costs, acts of acceptance of work performed, logbooks of work performed;
  5. contract, supply of equipment and materials.

The Garant Expert company has the necessary resources and offers a flexible pricing policy, as well as an individual approach to the provision of services: the cost, turnaround time and volume of the services provided are determined according to the instructions of the customer.

Construction financial and technical audit

During the implementation of the investment and construction project, the construction phase is the most capital-intensive. It is at this stage that the greatest likelihood of financial loss arises. The reasons for this may be completely different: poor quality of work, non-compliance with the established construction deadlines, lack of initial permits, inappropriate spending of money and so on.

Financial losses for the Investor represent a serious threat to the implementation of projects, especially under the condition of attracting credit funds of the bank.

Moreover, at a certain stage, it may turn out that the investment project requires additional funding or may be under threat of suspension due to administrative sanctions due to a timelessly not received building permit.

Increasing the project budget, postponing the completion of construction, the possibility of administrative risks, including stopping construction, are serious factors for lending to investment projects.

Therefore, both during the preparation of the loan agreement and directly during the construction of the facility, the Bank needs comprehensive information about the investment project. Best of all, if such information comes from an independent expert organization.

Often the only source of objective information on the basis of which you can assess the progress of the project, and therefore minimize the risks, is a construction audit. Conducting construction financial and technical audit can be trusted only to specialized expert organizations that have experienced specialists in their staff.

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