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									Contributed June 8, 2001 by "Sivanesan Sivakaruniam" <siva@kepland.com.sg> RISK-BASED AUDIT PROGRAMME
Company Property Department Activity S/N
.

: : : :

-Projects Progress Reporting and Cost Control/Extension of Time

Ref

Date Issued/Updated Nov 99

Page 1 AWP

AUDIT RISK/AUDIT OBJECTIVE(S)

AUDIT STEP(S) Risk

1 AUDIT RISK: Project delay could lead to liquidated damages or fine or licences being revoked

H M L

Significance

H M L

1.1

Actual progress is properly monitored against plan to pre-empt unwarranted delay.

1.1.1 Enquire management on the types of charts and reports used to monitor progress of development. 1.1.2 Obtain the progress report (e.g. master programme, and periodic site and management meeting minutes) and ensure that progress of development is adequately tracked and timely reported. 1.1.3 Through discussions and sighting documented evidence, establish that current or potential delays of the development are explained for and actions for rectification have been/will be taken.

2

AUDIT RISK : Cost overrun due to poor cost management

Risk Significance

H M L H M L

2.1 Actual costs are properly monitored against budgeted costs.

2.1.1 Review the current financial status reports and ensure that project costs committed to-date are properly and periodically tracked against budgeted costs. 2.1.2 By reviewing the circulation list of the financial status reports, ensure that costs overruns are adequately reported and necessary actions taken.

PROJCOST.APG.-NOV99

Contributed June 8, 2001 by "Sivanesan Sivakaruniam" <siva@kepland.com.sg> RISK-BASED AUDIT PROGRAMME
Company Property Department Activity S/N
.

: : : :

-Projects Progress Reporting and Cost Control/Extension of Time

Ref

Date Issued/Updated Nov 99

Page 2 AWP

AUDIT RISK/AUDIT OBJECTIVE(S)

AUDIT STEP(S)

3 AUDIT RISK: Anticipated cost overrun are not timely reported and provided for.

Risk

H M L

Significance

H M L

3.1 Anticipated cost overrun are timely reported and provided for

3.1.1 Through discussion with project management and review of site and management meeting minutes, ensure that anticipated additional costs, if significant, are adequately provided for and reflected in the current financial status reports.

4 AUDIT RISK: Extension of time requested by the contractor is not properly approved.

Risk

H M L

Significance

H M L

4.1 Extension of time is properly approved.

4.1.1 From 1.1.3, trace to Architect’s Instruction to ensure that the delay has been approved by the Architect (relating to extension of time proposed by the Owner as well as those proposed by the Architect). Where Owner proposes extension of time, trace to correspondence from Owner stating the reason for the extension sought. 4.1.2 Where extension of time is required for turnkey (i.e. consultants are not independent from the main contractor) projects, ensure that the approval is obtained from the Owners in accordance with Authority Limits. 4.1.3 Where extension of time was caused by variation orders, ensure that reasonable time is granted based on the extensiveness of the variation works carried out.

PROJCOST.APG.-NOV99

Contributed June 8, 2001 by "Sivanesan Sivakaruniam" <siva@kepland.com.sg> RISK-BASED AUDIT PROGRAMME
Company Property Department Activity S/N
.

: : : :

-Projects Progress Reporting and Cost Control/Extension of Time

Ref

Date Issued/Updated Nov 99

Page 3 AWP

AUDIT RISK/AUDIT OBJECTIVE(S)

AUDIT STEP(S)

5 AUDIT RISK: (i) Non-valid claims by contractors for extension of time (EOT) are allowed (ii) liquidated damages are not sought in accordance with the terms of the Contract.

Risk

H M L

Significance

H M L

5.1 Claims for EOT by contractors for extension of time are valid.

5.1.1 Review contractors’ claims for EOT to ensure that they pertain to valid causes specifically allowed for under the terms of the Contract and agreed by the Quantity Surveyor prior to recommending to Owners for approval. 5.1.2 Where claim for EOT was rejected, assess the need to impose LD.

5.2 Liquidated damages are sought from the Contractor in accordance with the terms in the Contract.

5.1.3 Test-check computations of the LD imposed to determine that this has been in accordance with the terms of the Contract.

PROJCOST.APG.-NOV99


								
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