Construction Audit Seminar - Virtual - November 2022
This interactive virtual seminar will be offered in four sessions. Attendees will learn "how-to" effectively establish and implement audit coverage to achieve "risk-based" cost avoidance and/or cost recovery results.
Earn 16 NASBA-Approved CPE credits.
"The material and teaching technique left me feeling well equipped
to perform an effective construction audit."
Recent EACA Attendee
Program Schedule
Part 1: Wednesday - November 30, 2022 - 4 hours - 4 CPE
Part 2: Thursday - December 1, 2022 - 4 hours - 4 CPE
Part 3: Wednesday – December 7, 2022 – 4 hours – 4 CPE
Part 4: Thursday – December 8, 2022 – 4 hours – 4 CPE
Who Can Benefit From This Learning Experience
Owner organization representatives who are involved with auditing or administering construction activity including:
- Owner's construction audit representatives (internal audit and/or external consultants)
- Owner's construction management executives, project managers, contract administrators, construction contract accountants, procurement representatives and/or legal representatives
Types of Contracts Covered
The course will emphasize effective construction audit strategies and construction cost control techniques for projects involving the use of the following types of construction contracts:
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Cost plus FEE - Construction Manager at Risk- Guaranteed Maximum Price (GMP) contracts
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Cost plus FEE - Design-Build GMP contracts
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Cost plus FEE contracts with General Contractors (with or without a GMP)
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Cost Plus FEE contracts with major subcontractors/trade subcontracts (with or without a GMP)
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Lump sum and/or Unit price trade subcontracts or prime construction contracts
Learning Objectives
Owner's representatives (procurement, legal, project management, auditors and others) will learn specific "how to" techniques for conducting effective audits of their organization's construction activity, such as:
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Issues to consider to help your organization avoid making costly mistakes when entering into construction contract agreements
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Key steps to ensuring the best value is received when the CM/GC contracts with subcontractors
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Critical process to ensure subcontractor change orders are fairly priced
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Process to control costs related to materials purchased by the Contractor
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How to structure your contract to ensure you do not overpay for contractor owned equipment
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Possible overcharges for third party equipment to watch out for
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How to avoid making excessive payments for subguard and/or contractor controlled insurance programs
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Methods to effectively minimize the loopholes in contracts that create opportunity for contractors to realize excessive hidden profits
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Management/construction audit partnering strategies to ensure construction cost controls are working as anticipated to benefit the project
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Owner's Project Managers will learn specific key control points that will increase their ability to manage the costs of their construction projects
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Owner's Project Managers will learn how to effectively partner their construction auditors to more effectively control the costs of their construction projects
Learn The Pros and Cons of
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Lump sum pre-construction services versus cost reimbursable pre-construction services
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Pre-established labor billing rates versus reimbursement of actual wages and verifiable labor burden
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Lump sum general conditions versus cost reimbursable general conditions
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Lump sum self-performed contractor work versus cost plus fee with GMP for self-performed contractor work
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Converting GMP contracts to lump sum contracts
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Supported payment applications versus percentage of completion payment applications
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Pre-agreed labor burden percentages versus reimbursement for actual defined labor burden costs
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Bonding both the prime contractor and the subcontractors
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Subcontractor default insurance (subguard) versus conventional performance and payment bonds
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Savings Sharing clauses versus no savings sharing clauses
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Worker's Compensation and General Liability Insurance - Conventional insurance versus Contractor
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Controlled Insurance Programs (CCIP)
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Worker's Compensation and General Liability Insurance - Conventional insurance versus Owner Controlled Insurance Programs (OCIP)
Benchmarking Topics
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Typical contractor fees for cost plus fee with GMP construction manager/general contractor projects of various sizes
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Whether or not to reimburse for general liability insurance or have it covered by Fee
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Typical charges for general liability insurance
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Typical charges for Subcontractor Default Insurance (subguard)
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Typical charges for Contractor Controlled Insurance Programs (CCIP)
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Typical charges for worker's compensation when the contractor is self-insured and/or uses high deductibles
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Change order markup percentages allowed on subcontractor self-performed work and work performed by sub-subcontractors
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Actual wire and conduit costs versus public "book prices"
Course Outline
Introduction to Effective Auditing of Construction Activity
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Audit objectives related to controlling construction costs
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Project team roles and responsibilities
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Delivery systems - fast track, design build, conventional
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Contract procurement methods, types, and phases
Cost Plus and Time and Material Contracts - Typical Overcharges
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Design contract billings for time and reimbursables
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Billings for personal computer and/or mainframe computer time
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Construction contractor and/or construction manager billings for labor and labor burden
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Billings for contractor-owned equipment, third-party equipment rental, expendable tools, equipment and
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consumables, and material used during construction
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Transactions dealing with subcontractors
Auditing Construction Change Orders
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Typical overcharges in lump sum change orders
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Electrical change order - discussion exercise
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Change order labor and labor burden pricing
Auditing Lump Sum or Unit Price Contracts
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Quality and scope of work overcharges
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Substitution of materials or methods
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Not performing required services
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Not installing proper quantities
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Special types of lump sum contract overcharge situations
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Adjusting allowances
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Required bonds and insurance
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Improper charges for sales tax
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Special unit price overcharge situations
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Excessive quantities billed
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Improper measurement method used
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Inaccurate measurements
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Billings for excessive quantities actually performed
Program Fee
REGULAR SEMINAR REGISTRATION Fee = $1,195
Program fee includes instruction and all program materials.
Program Schedule
All sessions will be held via Zoom from 10:00 am to 2:00 pm Central Time (from Dallas, Texas):
Part 1: Wednesday – November 30, 2022 – 4 hours – 4 CPE
Part 2: Thursday – December 1, 2022 – 4 hours – 4 CPE
Part 3: Wednesday – December 7, 2022 – 4 hours – 4 CPE
Part 4: Thursday – December 8, 2022 – 4 hours – 4 CPE
CPE
All participants are eligible to receive up to 16 Continuing Education Credits (CPE’s) to fulfill professional accreditation requirements. Participants will receive 1 CPE credit for every 50 minutes in attendance. Field of Study: Auditing. Course Level: Basic. Group-Internet, lecture-style seminar; no prerequisites or advanced preparation required.
Instructor
Rich Townsend is a principal of the consulting firm R. L. Townsend & Associates, LLC, which provides construction audit and construction cost control consulting services to Owners.
Since 1985, Mr. Townsend has been the instructor for the seminar entitled "Controlling Construction Costs" and "Effective Auditing of Construction Activity." He has also instructed in-house seminars related to construction contract audit and construction cost control for a wide variety of organizations and industries throughout the United States and Canada.
Prior to starting his consulting firm, Rich spent 13 years with the auditing department of a major retail corporation. During his internal auditing career (1971-1984), he served in several staff and audit management positions with a specialization in audits of construction contract activity.
Mr. Townsend is a Certified Internal Auditor (CIA), a Certified Public Accountant (CPA), and Certified Construction Auditor (CCA). He currently serves on the advisory board for The National Association of Construction Auditors.
He is a graduate of Waynesburg College (Waynesburg, Pennsylvania) where he obtained a Bachelor of Science Degree with a major in accounting.
Reviews from Seminar Participants
The seminar was great! I would definitely attend again and recommend this to others. Well organized and presented!
I really enjoyed and got value from the mini-team project to discuss and find cost recovery items.
I was super impressed with the materials presented, the handbook is amazing and I learned quite a bit. Thank you!
Awesome sessions! I’ll be back!
Thank you! I found the in-person seminar engaging and pertinent to the work I do in construction auditing.
Great content!
This seminar has really helped kick-start my thinking about aspects of construction auditing to be attentive to. Additionally, I’ve been in many conferences/seminars like this over the years and yours was the most engaging and interesting.
Very relevant – making me think about how to change my audit approach to be more effective.
Thanks for your great insights and for the construction education!
Opened my mind to new thoughts in construction auditing.
Very informative with great interaction for real world applications and discussions.
