PORTFOLIO OF SERVICES
HOME| PORFOLIO OF SERVICES |RISK MANAGEMENT
POLICY AND PROCEDURE DEVELOPMENT PRE AUDIT FUNCTION MANAGEMENT FIXED ASSET MANAGEMENT

Construction Project Audit



Risk Combat Strategy for Engineering, Construction & Contracting (ECC)

How do I get the most from ECC Projects?
Is there fraud in my Company?
Is there an efficiency problem in my department?
Do we lack the necessary productivity?
Could there be duplicate payments?
Why is there continuing cash crunch in-spite of multiple injections?
Are we effectively negotiating with subcontractors and suppliers?
Can Corporate costs be reduced?
How can Operational overheads be controlled?
How do you drive your business through pandemic times
How do you cope with business slow down
How can I tackle operational friction
Can I manage my finance project wise?
IS inventory controls adequate?
Is my business strategy aligned to my Finance Status?
Is my Time Management system adequate?
Am I achieving adequate productivity in projects?
Is my subcontractors cost productivity and constraint based (Cost and date targets)

Gain your assurance on your organisations effectiveness in fighting these concerns through Provex Consult

Strategic Risks Perspectives in ECC Industry
Risk I : Fraud :5-7% of Project Cost

Research by the Association of Certified Fraud Examiners in the Construction Industry has proven the following facts:
  • High Fraud susceptible industry

  • High value of frauds

  • Multiple Fraud Scheme Potential

  • Total of 144 instances in various fraud schemes

  • Medium loss of 200,000 USD per instance


    • Risk II : Productivity : 15 to 20% of labor Cost

    Risk III : Inefficient Cost Control: 3-4% of Material cost wasted at site

    Risk IV : Procurement Efficiency of Materials: 3-5% of Material Cost

    Risk V : Project Planning inefficiencies 2-3% of Project Cost

    Risk VI: Project Management 5% of the Non-material cost of the project

    Risk VII : Financial Planning: 2-3% of the Project Cost

    Risk VIII : Sub-contracting : 3-4% of the Sub-contracted values

    Risk IX : Estimation Errors: 1-2% of the project Cost

    Risk X : Lack of Oversight for Variation work: 2-3% of the Project Cost

    Risk XI : Mistakes – Duplicate billings – 0.25-0.50% of Project Cost.

    Based on a assumption of cost components as below

    Labor : 20-25% of Project Cost
    SC labor : 15-20% of Project Cost
    SC L+M : 25-30% of Project Cost
    Materials : 35-45% of Project Cost
    Overheads : 5-10% of Project Cost

    Maximum Risk value in the construction Industry can fall between 18-24% of the Project Cost which results in Cost escalation from Optimal value achievable