The focus of this course is to prepare auditors and project managers to comprehensively address the factors required for a successful project, identify fundamental risk, and assist in the development of effective controls to help the project succeed. Attendees will learn essential fundamentals of construction management, to prepare a comprehensive risk assessment and effective audit testing steps to identify errors and emerging issues.

• Understand key terms and make the auditor feel more comfortable in "talking the talk" with the contractor and vendors. This includes understanding the flow of a construction project
• Implement effective governance over project management, understanding common frauds, fraud prevention and fraud detection
• Understand construction risks and how to manage them
• Ensure effective change management over change orders, contingencies and claims
• Learn strategies for identifying and recovering overpayments

Internal Auditors, Senior Auditors, Finance Personnel, Financial & Operational Auditors, Information Technology Personnel, External Auditors with two or more years of audit experience; Quality Assurance personnel; Data Security specialists, Audit Directors & Managers, Operations Managers & Risk Officers, Construction Professionals& Accountants, Construction Contract Administrators & Consultants

This interactive Training will be highly interactive, with opportunities to advance your opinions and ideas and will include:
• Lectures
• Workshop & Work Presentation
• Case Studies and  Exercise
• Videos and General Discussions

Key Construction Terms

• The (owner) defined
• The contractor monthly payment application defined
• The Schedule of Values defined

Design: The Architect Role and the Architect Agreement

• The design planning process: CDs
• SDs and DDs
• Main components of an architectural agreement
• Contract administration services
• Reasonable compensation/reimbursable expenses for the architect
• Contract exhibits: hourly rate schedule
• Project team list, interior design
• Design risk and the fast-track process
• Value engineering defined and when VE begins
• Auditing the architect monthly invoice

Construction Contract Documents

• Understanding key terms and conditions in the construction agreement
• Specifications: quantity and quality of materials Key terms and conditions in the General
• Supplementary or Special Conditions agreements
• The project manual
• Exhibits to the agreements
• Including hourly labor rates and unit prices

Types of Construction Contracts and Associated Risks

• How the owner and the contractor negotiate construction cost risk
• Lump sum (or fixed cost) defined; associated risks for the owner and contractor
• Guaranteed maximum price defined; associated risks for the owner and contractor
• Time and material defined; associated risks for the owner and contractor
• Cost-plus defined; associated risks for the owner and contractor
• Unit price defined; associated risks for the owner and contractor
• Design/build defined; associated risks for the owner and contractor

The Bidding and Award Process

• Request for proposal v. negotiated or sole sourced contracts
• Bid analysis and lowest bid syndrome
• Taking alternates and allowances into consideration
• Bid rigging and what to look for

Controlling the Construction Process

• Typical construction organization charts
• The estimating takeoff
• Scheduling/key milestones and final completion
• Detailed v. high level monthly reporting
• Key components of a superior monthly financial report
• Key indicators that may signify potential field issues or cost overruns
• Other field reports and CIP accounting reports
• Request for Information (RFI) Log and the Architect responsiveness

Change Management

• Change order defined
• Why change orders occur and why they are risky business
• Change order acronyms
• Change order reporting and how to ensure that management knows what is going on
• Controlling and testing change orders
• Change order risk thresholds and when auditors should take note
• Other contract changes: addendums, modifications
• Amendments and work, authorizations

The Payment Process

• Reviewing the contractors monthly payment application
• Retention, percentage of completion and lien releases
• Schedule of values and the 17 CSI divisions
• Checking for mathematical accuracy

Other Construction Risks

• Market risks
• Insurance risks
• Surety and bond risks
• Financial risks

The Closeout Process

• Punch list
• Warranties/guarantees
• Final lien releases
• The need for as built drawings
• A closeout checklist

Claims       

• Types of contractor claims
• Types of owner claims

Types of Construction Audits

• When to kick start an audit
• Control and financial reviews
• Change management (change order) review
• Forensic reviews other audits

A RECTUS attendance certificate will be awarded to all participants who complete at least 80% of the total course duration.