Audit & Consultancy
Our Results: Construction Audit
Auspicium has successfully served clients across a range of industries and sectors. Our clients include healthcare, education, pharmaceutical, mining, corporate relocations and retail.
Higher Education & Healthcare
Need: A major university was doing multiple construction projects a year. The university has a campus size of 203 acres in the heart of an urban center. They had an average capital project spend of over $85 million, plus donor received funds. They have a portfolio of construction projects that vary but include: hospital, sporting stadiums, social buildings, library, and advanced chemical and biological labs.
A small audit group, they recognized a need to audit these projects. Lacking the experience, they wanted to find an economical way to enhance the skills of their team. Rather then sending a few away on training they called in Auspicium to assess their capital improvement processes and train them at the same team.
Auspicium worked side by side with one of their auditors to learn and evaluate the internal processes around capital improvements. Auspicium then created a custom training program for them, delivering the training to them and helped them finish a process improvements audit. The client was so happy that they rehired Auspicium a few months later as they performed their first construction audit. The audit was conducted by University audit staff but reviewed by Auspicium. The result of the audit was numerous process improvements, identification of control weaknesses and potential recoveries for the university. They have plans for more construction audits in the future.
And this is what they had to say……
"We were interested in raising the level of our expertise and audit services to add greater value to the University. We had incurred millions of dollars in new construction and renovation projects over a decade, however, none of these projects had been audited. I reviewed the Institute of Internal Auditors' Construction Audit Guide, written by Denise Cicchella, and thought it was an excellent resource. After reading it, I felt my team was ready to audit, but knowing that was somewhat overly ambitious, I decided to train my staff on construction auditing using the expert, Denise Cicchella, the author of the book. Denise and I had several discussions over the scope of the training and the development of a risk assessment designed specifically for construction projects.
Denise worked tirelessly with my staff, met with our design and construction services team, and together, she and my staff developed an extraordinary construction risk assessment and audit program. Denise then developed a 2-day customized training for my staff covering construction processes, rules, risks, and how to audit all of it. She then walked the team through the new construction risk assessment and audit program all while making the training fun, exciting, and enjoyable. It was by far the absolute best work I've seen in many years. In my 23 years in auditing, I've never worked with anyone who is so knowledgeable, but so incredibly fun at the same time. Denise is flexible, easy to work with, and she has the utmost level of integrity. I would strongly recommend Auspicium to anyone!!!"
Pharmaceuticals
Need: A major international pharmaceutical company had spent $18+ million in tenant improvements to relocate their corporate headquarters. The construction was directed by the landlord but managed internally by the organization’s newly appointed project manager. With similar moves being planned for other sites, audit was asked to look at the overall project. Audit did not have the skill set needed to perform the audit,so Auspicium was called in to assist on the audit and train the staff at the same time. Auspicium created a custom course for them and delivered training to them for the first two days of the assignment. After a review of the contract it was discovered that the audit rights were limited. Auspicium helped them design an audit program based on the information available.
The scope was to conduct a financial and operational review of the business processes surrounding the construction. The review covered the contract management and financial controls processes including project planning, and competitive bidding for the tenant up-fit project to ensure that business and financial risks were properly mitigated and transactions were entered into in accordance with Company policies. The construction project management and project close out review was to determine whether the project had been managed using construction industry best practices.
Significant Results
- Recovery of 4%
- Employee and management awareness of construction risk
- Construction Contracting process was improved
- Vendor Management practices were strengthened to ensure cost containment.
- Standards established for future construction projects
- Strengthened skills of internal audit
