What Is Construction Audit Program
The chief purpose of construction audit program is to evaluate the actual control of the head office over the built up of a project, determine how far the terms of the contract has been carried out, verify the payments made for the construction, quantify and identify the overcharges to the project and also determine that the property and assets have been componentized and classified properly. The following procedures are followed for the program.
In the beginning it compares the strategies and also regulations of the undertaking and then determines whether approval from the certified office has been acquired. Some sort of substantiation with the number of employees for that work and whether they have the proper facilities for the work is also performed.
A check is also carried out to review the correctness and timely submission of the monthly reconciliation reports of the earlier years and also determine if the reconciliation reports are correct and agrees with the cash that is available in the account. All the bank statements and balances are also verified.
It is also used to determine if the checks were issued correctly and with the prior approval of the competent authority. It also determines that all the payments are supported with appropriate invoices or documents and have been duly approved. The check amount tallies with the invoice and timely payment was made is also verified.
Substantiation of the payouts given to each of the building contractors is made simply by picking some transaction vouchers and by finding out if appropriate endorsement had been acquired before the payout was made.
The construction audit program should also verify whether the lowest bid was selected and if a general contractor was approved, it should also verify that the contractor had obtained at least 3 bids from different subcontractors and whether the subcontractors were approved by the concerned department.
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