Part 2: Types Of Capital Project Audits

Introduction

Our first article in this series discussed the reasons and benefits of performing project audits. This follow-up article discusses the types of audits and ties back to the first article's specific reasons for each audit.

There are several types of audits: audits performed at project initiation to set labor and equipment rates for ease of billing, interim audits, final audits, claim or request for equitable adjustment (REA) audits, and specialty audits. Each audit type, as well as the main issues it addresses, is discussed below.

Plan Phase

Pre-Construction Audits:

• Rate Audits: Labor, equipment, and overhead rate audits are conducted to verify the accuracy of costs for establishing cost-based rates in time and material (T&M), guaranteed maximum price (GMP), and lump sum contracts, especially for change orders.
  • Labor audits check base wages, benefits, and taxes.