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A large university in Massachusetts faced a continual need to expand and renovate buildings on its campus. Due to the extensive construction needs of the university, the CFO wanted internal audit coverage to supervise the costs of construction projects. The university was in the process of constructing three buildings, including a $115 million life sciences and engineering facility and needed construction cost review expertise to supplement and enhance the university’s existing internal audit resources.
CBIZ provided construction cost review services for the construction of the life sciences and engineering building and helped the university build a construction audit program.
We provided formal and on-the-job training for the university’s internal audit resources in conjunction with performing construction cost reviews on each of the three ongoing construction projects. Our team examined labor, equipment and insurance rates as well as related party and subcontractor costs. We identified insurance, vendor, and change order overbillings and reconciled labor costs to the agreed-upon rates. As we worked through the reviews, we turned over more of the process to the university’s internal audit department and provided oversight of their work to develop internal construction cost review expertise.
Between adjustments to the costs already incurred and the estimated costs of what would have been incurred had the project not been audited, the university saved more than $800,000 on its life science and engineering facility project. Additionally, internal audit resources became more independent in their construction cost review services, which will help the university save money on future construction projects.
It Pays to Take a Closer Look at Costs
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