Audit Programme of Contruction

|V. Construction | | | | | | | | | |Objectives: | | | | | | | | | |Tendering exercise is effective performed; | | | | | | | | | |Variation works are properly authorized; | | | | | | | | | |Payments for construction works are properly supported, verified and | | | | |authorized. | | | | |Audit Tests: | | | | | | | | | |Tendering for consultancy contracts | | | | | | | | | |Obtain all consultancy agreements and perform the following: | | | | | | | | | |Review proposals submitted by consultants; | | | | |Review price comparison analysis is prepared and approved by the | | || |management; | | | | |Terms in the consultancy agreement are reasonable, in particular on the | | | | |reimbursement of sundry expense; | | | | |

Ensure the consultancy agreement is duly signed by the management. | | | | |Tendering for engineering works | | | | | | | | | |Obtain recent tender cases and perform the following: | | | | | | | | | |Tenderers list is approved by the director; | | | | |“Bill of quantity” is signed by Architect, QS and the director; | | | | |The tender opening record is properly prepared: | | | | |- witnessed by AGM and consultants | | | | |- tenderers agree to those on the tenderers list in (a) above | | | | |Tender Report is prepared by QS; | | | | |Tender with lowest price is awarded and approved by the director; | | | | |Compare budgeted price and the awarded price, any significant variation is | | | | |properly explained; | | | | |

Contract is signed by the AGMs and the following important terms are | | | ||included therein: | | | | |handling of retention money | | | | |penalty for delay of project completion date | | | | |establishment of defect liability period | | | | |requirement of surety bond/guarantee | | | | |Variation works | | | | | | | | | |Select formal instructions issued to the contractor for the Architectural | | | | |Alteration Work and check if: | | | | | | | | | |It is supported by comments from the Architect | | | | |It is approved by the management in accordance with the approval authority | | | | |defined in the staff manual | | | | |Final account is properly prepared to incorporate the changes. | | | | |Payments | | | | | | | | | |

1. Obtain latest trial balance and identify accounts capturing construction| | | | |costs (including consultancy fee) | | | | |2. Print detailed transactions from the accounts identified above and | | | | |select material payments and check if: | | | | | | | | | |a. It is supported by work acceptance report certified by the Architect. | | | | |b. The amount agrees to the payment method in the contract. | | | | |c. Payment is properly approved in accordance with the approval authority | | | | |defined in the staff manual. | | | | |3. Ensure payments for construction cost are monitored by the performance | | | | |of cashflow budgeting. | | | |