If you’re one of the millions of small business owners in the United States, sooner or later you’re going to need to understand what a construction audit is, simply because it’s almost impossible to run certain types of small businesses without at least one. A construction audit is something that can be difficult for people to get on board with, considering how much it can cost and how time-consuming it can be. But it’s incredibly necessary whenever any construction project is being handled, and it’s something that both the construction company itself and those with a stake in the construction project need to consider for a number of different reasons. At its most basic, a construction audit report is a review of the different aspects involved in a construction project. It ensures that the construction company is performing the necessary tasks appropriately, and in keeping with the contract that was signed. Construction auditing is vital when ensuring that companies and stakeholders not only get what they need out of the construction projects they order but also that they don’t over-spend as well. However, construction auditing can be much more complex than you may initially think it is. Let’s look into the different aspects of construction that an audit should cover, as well as what you should expect out of the process.
What Kinds Of Issues Do Construction Audit Reports Cover?
What makes a construction audit report useful, exactly? There are actually a number of components that play into these reports. Perhaps the main reason why stakeholders and companies invest in these reports is that they aid in the recovery of costs. A lot of money goes into a typical construction project, and not all of it is initially put forth by those commissioning the project. In some cases, a construction company may cover the costs itself before payment is made, under the impression that those costs will be covered, and then some, following an audit. It can actually be surprisingly easy for construction costs to run out of control as well. Construction projects in particular can be rather expensive, in part due to the fact that, while predictions can be made regarding pricing and costs, construction projects can sometimes spiral out of control. A construction company may begin a renovation with one figure in mind, only to discover that water damage needs to be repaired halfway through the project itself. Higher costs than those initially quoted can, of course, lead to disputes wherein payment can be delayed for quite a long time, leading to losses for the construction company as well as, potentially, legal issues for those that commissioned the project. Ultimately, a construction audit report can not only prevent a construction company from over-spending; it can also keep both parties honest and ensure that everyone pays for what they are responsible for.
These reports can also ensure that the construction project stays on schedule, rather than veering off course as is unfortunately all too common in some cases. A construction auditor actually can visit the project as it is occurring, and can take note of what is happening and whether or not it’s all happening according to schedule. Auditors are able to assess the process, and can actually advise the project stakeholders and the construction company alike. Many construction companies actually bill their clients based on a project’s completion level. With the help of a construction audit report, construction companies can actually be made aware of when it’s time for them to bill their clients.
Construction companies and their clients can easily conflict about whether or not they’ve gone off course, and for that matter whether or not certain additions or detours are necessary. A construction company may advise their client that they need to do additional work in order to make a project the best that it can be, but this doesn’t mean that the client always has to heed their advice. If a construction company advises their client to move forward with a certain type of roof installation and the client refuses that option, the construction company would be breaking their agreement if they move forward. Essentially, a construction auditor can ensure that project managers are doing what was asked of them, no more or no less. It essentially cuts down on conflict and ensures that the controls of the project are being followed as was initially advised.
On a very basic level, a construction audit report also ensures that construction projects move forward as safely as possible. A construction auditor is essentially meant to survey the project and to ensure that all procedures are being followed correctly. This means that they can also ensure that all safety procedures are being followed as well. The last thing a construction company or for that matter a project stakeholder wants is for someone to get injured on the job. A workplace injury is more than just a tragic accident. It can also lead to both the construction company and those that commissioned the project being held responsible for the injury, legally and financially. An injury on a construction site could actually lead to lives being changed. A person could be not only hurt but left permanently unable to function at the jobs that they’re most skilled at. Workers can employ personal injury lawyers in order to pursue a case; and keep in mind that sometimes, these cases can be fraudulent. A worker may have caused their injuries independently, and then gone on to blame their employers. An auditor can confirm how an injury happened and why it happened, which would ultimately lead to a company avoiding financial and legal responsibility. But again, what’s most important in terms of safety is avoiding injuries altogether, and making sure that everyone is working as safely as possible. Workers must have a safe environment, and in some cases, the only way that this can be done is through the interference of an auditor.
How Does A Construction Audit Report Work?
So, it’s clear that there are many benefits to having construction audit reports conducted. The question for many remains how a construction audit report is conducted in the first place. The fact is that many worry about these reports because they feel that the auditors may interfere too much. However, there are actually practices that auditors must follow, which will keep them from interfering in a project overly much, whether that project involves roofing services or construction from the ground up. Auditors don’t simply walk around and take notes on the construction site. They also look at documentation and files to ensure that all is being recorded correctly.
Usually, the priorities of a construction auditor will include identifying areas of increased risk around the project first and foremost, as this will be key to ensuring the safety of everyone involved. This will involve surveying the project in person, and sometimes periodically returning to the same areas. They will also look over billing, and ensure that funds are being used by all in the manner to which everyone agreed. This may lead to the auditor reporting where costs could be saved, and whether or not the construction company is avoiding savings in order to make a bill higher than it needs to be. Furthermore, their report will include areas in which processes can be improved upon. Essentially, the auditors will be identifying where efficiency could be improved, and therefore cut down on the amount of time being spent on the project unnecessarily.
But an auditor’s duties aren’t limited to that initial construction auditor report. After the initial report is made during the project, along with the suggestions regarding how to improve efficiency, safety, and other issues, the auditor can return to the project. This will allow them to check up on the construction company, and make sure that they’re working as needed. They can help the construction company resolve any outstanding issues, and ultimately create a much stronger and more complete project in general. They can also assist in the overall closing of the project. The great thing about this is that neither party can contest whether or not a project was closed out on time, and whether or not it was closed in accordance to both the construction company and the stakeholders. This is why a lot of people ultimately choose to keep a construction auditor available throughout the project, rather than relegating their duties to the beginning. Much can change throughout a construction project, and an auditor is only able to work on what they have access to.
Who Should Commission A Construction Audit Report?
Construction audit reports are useful in a number of different projects. Essentially any construction project could benefit from a construction auditor, even those that seem fairly straightforward, like commercial plumbing projects. But the question can be, depending on the types of projects involved, whether those that commissioned the project or the construction companies themselves should handle the audit. There are a number of benefits to both, and in some cases, both sides may prefer to have their own audits conducted. A construction company may appreciate having a construction audit on its side, to ensure that it is properly paid for all services rendered. Those that commissioned the construction project, on the other hand, may appreciate knowing that everything is being done as they requested. If the project that you commissioned involves construction hauling, which could present a number of different risks for employees, you’ll feel better knowing that everyone is conducting themselves as necessary. But of course, whether or not both companies commission construction audit reports or not, it’s important to understand that the report should be done by a third party.
Fortunately, there are companies that provide construction audit services. Construction audit services, when given by a third party, are less prone to the risk of bias that can be inherent when a construction company or project stakeholder conducts an audit internally. Furthermore, construction consultants offering these services can provide them at any point in the process, even within the early design process. This is why some construction companies actually keep these types of consultants on hand. This way, they can refer back to them whenever they’re working on a project, and therefore can ensure that they are keeping their records accurate. The fact is that working with a construction consultant doesn’t have to be overly dissimilar from working with an accounting firm, simply keeping records accurate. When choosing a construction consultant to work with, people on either side of the business, working with a construction company or as the company itself, need to prioritize choosing someone with experience. They also need to work off of the reviews given by others within the industry and ensure that the person they’re working with has a good opinion of others within the industry. This kind of research can ultimately keep you from working with an auditor that is less than thorough. The last thing that you want is a biased auditor or one that doesn’t keep the proper records.
Construction auditors do important work. No matter what type of construction work is being done, whether it involves plumbing or an asbestos removal service, an audit is necessary. It will ensure that all parties are being honest and that everyone is paying what they must (and no more than that); it also ensures that the construction company is paid what they are owed and that all employees are being kept as safe as possible. Audits can be irritating to some, and certainly can slow the construction process momentarily, but only if it needs to be slowed because processes are not being followed correctly. Construction issues must be taken seriously. It’s all too easy for people to be cheated out of work, or for that matter for them to be hurt during the process of a construction project. Nothing should be left to chance.