Case Study

Case Study: Capital Projects Contract Audit

Client Challenge
Our client, a premier healthcare institution, hired a general contractor to construct a research building and outpatient facility. Cost increases and schedule delays prompted management to take a closer look at the construction contracts.

POWERFUL INSIGHTS
Protiviti's experienced professionals determined that a targeted audit would be most effective for the client's needs.

The audit focused on payment applications associated with the construction contracts between the owner and the contractors for a $25M research building addition and a $100M outpatient facility.

PROVEN DELIVERY
Protiviti's professionals identified more than $4M in contract exceptions.

Based on the audit, our client received a detailed report of the exceptions, which included:

  • $2.6M in partially unsupported documentation from the contractors
  • $1.3M in incorrect subcontract amounts charged by the contractors
  • $190,000 in incorrect labor rates and hours charged by the contractors
  • $130,000 in miscellaneous exceptions charged by the contractors
  • $100,000 in incorrect materials and amounts charged by the contractors

How We Help Companies Succeed Recent national surveys by the Construction Management Association of America indicate that 40 percent to 50 percent of major construction projects run longer than planned and incur significant cost overruns.

Protiviti's team of construction project specialists has assisted clients with improving control over their projects, creating more reliable project timelines and reducing their exposure to cost overruns.

About Protiviti
Protiviti is a global business consulting and internal audit firm composed of experts specializing in risk, advisory and transaction services. The firm helps solve problems in finance and transactions, operations, technology, litigation, governance, risk, and compliance. Protiviti's highly trained, results-oriented professionals provide a unique perspective on a wide range of critical business issues for clients in the Americas, Asia-Pacific, Europe and the Middle East.

Protiviti has more than 60 locations worldwide and is a wholly owned subsidiary of Robert Half International Inc. Founded in 1948, Robert Half International is a member of the S&P 500 index.

SOURCE: Protiviti Inc.