THE ROLE OF CONSTRUCTION AUDIT AND AUDITOR IN MANAGEMENT OF CONSTRUCTION PROJECT

РОЛЬ СТРОИТЕЛЬНОГО АУДИТА И АУДИТОРА В МЕНЕДЖМЕНТЕ СТРОИТЕЛЬНОГО ПРОЦЕССА

Кузьмина Татьяна Юрьевна

студент, Институт экономики, управления и информационных систем в строительстве и недвижимости, Национальный Исследовательский Университет Московский Государственный Строительный Университет,

РФ, г. Москва

Мигунова Наталия Алексеевна

студент, Институт экономики, управления и информационных систем в строительстве и недвижимости, Национальный Исследовательский Университет Московский Государственный Строительный Университет,

РФ, г. Москва

Юдина Ирина Ивановна

научный руководитель, преподаватель, кафедра «Иностранные Языки и Профессиональная Коммуникация», Национальный Исследовательский Университет Московский Государственный Строительный Университет,

РФ, г. Москва

ABSTRACT

This article is devoted to the problem of the influence of construction audit on the promotion of a construction project. It is considered that if it is available, the irrational use of the customer's finances is minimized, all areas of the project are controlled from start to finish and the construction project is moving forward exactly on schedule.

The aim of the study was to get acquainted with the profession of a construction auditor, to define its functions and tasks in a construction project, to find out the benefits of auditor's work in the construction project (make sure that it is necessary in the team) and the auditor's influence on the implementation of the work plan.

АННОТАЦИЯ

Данная статья посвящена проблеме влияния строительного аудита в менеджменте на продвижение строительного проекта. Считается, что при его наличии минимизируется нерациональное использование финансов заказчика, контролируются все сферы проекта от начала до конца, строительный проект продвигается вперед точно по графику.

Целью исследования было ознакомиться с профессией «Строительный аудитор», определить его функции и задачи в строительном проекте, выяснить пользу работы аудитора в строительном проекте (убедиться в его необходимости в коллективе) и его влияние на выполнения плана.

Keywords: construction auditor, construction project, project management, financial documents, audit report, the financial audit, the technical audit, budget estimate, financial indicators, project documentation.

Ключевые слова: строительный аудитор, строительный проект, управление проектом, финансовая документация, аудиторский отчет, финансовый аудит, технический аудит, бюджетная смета, финансовые показатели, проектная документация.

The construction industry is one of the key factors of economic activity. Construction has had an impact on society during many centuries. The development of the construction industry has led to the formation of vital building structures such as railways, bridges, airports and seaports, thereby providing increased opportunities for internal and external economic growth.

Let's start studying this problem by analyzing what a construction project is and what role the construction auditor plays in a construction project.

A construction project is a set of measures for any complex structure. The first stage in the construction of any construction object is the development of the project. To make the construction legal, it is necessary to obtain various permits from the relevant authorities, providing a project plan, and then according to it you can calculate an estimate, monitor and conduct the construction process.

At the initial stages, it is necessary to collect project documentation, which is a set of graphic and text materials that contain a whole list of architectural, urban planning, structural, technological and engineering solutions used for the implementation of a construction object as well as working documentation, including different sections, which determines the list of specialists involved in the development of materials. At the subsequent stages of construction, an examination of the developed documentation is carried out, and then the process of construction process begins. At the time of completion of construction, the object is transferred to the customer for use as intended.

The main purpose of the construction project is to provide the possibility of direct construction. The project plan and its documentation are absolutely necessary during the entire existence of the object. Moreover, the operation for a long time involves changes and reconstruction of the structure. The construction project plan is the main source of initial data; any changes should be reflected in it. Thus, accuracy in documents throughout the entire lifecycle is important.

And this is possible if there is a control at any stage of the project. Therefore, when planning design, construction, reconstruction, major repairs or other types of work, the customer has a certain budget, he wants to minimize costs while maintaining proper quality. But at the same time, there is a chance of not exceeding expectations and costs, constantly investing money, or even stopping work due to lack of funding. The reason explaining the cases is the lack of control over the choice of design solutions.

One of the main objectives of this audit is to confirm the volume of additional work performed. Here is an example: /a fairly common situation in construction, when additional work is added to the current contract and the volumes stipulated in it. At this stage, disagreements arise between the contractor and the customer. And the contractor is forced to prove the validity and expediency of additional work. / Or the customer may doubt the quality of the work that the contractor claims, which will cause questions, therefore it is only possible to determine the state of the building and avoid legal proceedings with the help of specialists.

The current legislation of the Russian Federation does not define the concept of "construction audit". However, in the construction field, this concept is used quite often. Now construction audit has become very popular, as there are many cases when the cost of the project becomes higher than the planned budget, so it is worth using the services of construction auditor at the planning stage to maximize the contribution and supervision of third parties, especially for large investments in construction or a new type of project.

Let's move on to the consideration of the concept of construction audit.

Construction audit as a comprehensive study of the project is an assessment of the economic indicators of the work performed, design, regulatory, technical and executive documentation for the object and analysis of the total cost of construction. In addition to our example, the auditor resolves conflicts and disputes that arise at various stages of a construction project. Investors, technical customer, lender bank, management company, contractor can also use the services of a construction auditor. Here are the most common goals when you need to conduct an audit:

• to analyze the composition of the initial permits and design estimates, their compliance with the terms of reference and regulations, sufficiency for construction or other work

• to estimate the budget for the upcoming design and construction

• to analyze the quality of the work performed and the erected object, identify shortcomings and deviations from the project and estimates

• to assess the timing of the project and the adherence to project deadlines

• to calculate and assess the risks of the customer or investors, to prepare recommendations for their elimination or minimization.

The audit plan depends on the type of audit and the objectives defined in the terms of reference for the project. Thus, the financial auditor analyzes the design and working documentation, estimates and calculations, the amount of work actually performed, the target expenditure of funds while the technical auditor conducts construction quality control, deadlines and volumes of work performed, comparing them with the design and working documentation, and current construction supervision.

Audit is classified as external and internal. The main difference is that the internal audit is conducted by the company's employees themselves while the external audit is performed independently of the company's management.

A construction audit procedure includes four stages. The first one is the analysis of technical specifications and source documents, audit objectives, construction stage. The very first stage is the initial face-to-face meeting of the customer, the contractor and the auditor / audit team, where the auditor collects general information about the inspected object under review, determines its place in the regional construction market, organizational structure, and economic relations.

The second stage is to study and evaluate the project, executive and financial documentation. All the main economic and technical indicators of the construction and the future of the object are contained in the documents. During the construction audit, the following is studied:

• design documentation, validity and expediency of the selected solutions, materials and structures

• estimates and calculations, specifications for building materials, justification of the wage fund, other types of expenses

• project management of construction, working and executive documentation;

• contracts with the contractor and subcontractors, suppliers, manufacturers of structures and building materials

• financial documents for payment of construction work, purchase and supply of materials, delivery and use of equipment, and remuneration of employees

• expert opinion on the project, construction permit.

The documentation contains information about the main economic and technical indicators of construction: what characteristics and parameters should the object meet, in what terms and stages should the construction be carried out, what standard costs were provided for by the project as well as the budget of the customer.

The third stage is the inspection of the object, checking the stages and quality of the work performed. You can conduct a technical audit immediately before the start or after the start of construction work at the stage of putting the object into operation. For this purpose, specialized specialists in the field of construction can be involved. Surveys are carried out in the following areas:

• compliance of the volume of work performed with the reporting documents, the original and the executive documentation

• compliance of the object and works with the project requirements

• compliance of construction and installation works with contractors' contracts

• assessment of the quality of work and materials used, their compliance with specifications

• actual stage of readiness of the object

• volume of completed and uncompleted work, their cost indicators

• reasons for deviation from the project, inadequate quality of work and the object

• analysis of the proper completion of financial statements and financial documents.

The fourth and the last stage is preparation of an expert opinion or report.

Specialists need to check all the documents and examine the object in order to issue audit reports that include an assessment of project, production, financial and other activities, the reliability of reports and financial documents, and the identification of violations and deviations from the project.

The content of reports indicates suggestions and recommendations in each section of the report. It compares financial and economic indicators, the actual and declared scope of work, the possibility of implementing the project on time. It identifies the reliability and correctness of pricing, estimates and calculations, it establishes the compliance of materials with regulatory requirements, it assesses risks, recommendations for their minimization, it calculates the cost of eliminating inconsistencies and violations, such as the facts of theft, subscripts, corrections to reports and financial documents, misuse of funds, etc. The final document is handed to the customer with all additional materials.

The findings of the research are the following:

- The importance of the role of the audit can be proved using ordinary cases, simulated situations occurring on a day-to-day basis, for example: a decorative element such as a glass wall may be too costly if the increased risk of installation errors and structural support problems are fully taken into account. In this case, all outcomes of events are considered, and if there is a possibility of losing time, finances or the product itself and uncertainty in making a decision, the auditor helps to prevent a loss of the provided budget and suggests finding a way out how to use the finances rationally. Another example: an examination of the materials may reveal that a cheaper type of wood was used for the manufacture of beams than indicated in the contract. Here, the audit by the auditor helps to identify a number of violations, namely: dishonest team employees, that is, theft of funds, and their unwillingness to comply with the project plan

- The introduction of the auditor's services helps to strengthen control over the project, reduce errors and risks, and improve the interaction of the project team. The desired goal of all human activity is the successful achievement of the intended goal, which in turn brings satisfaction to all members of the team involved in the creation of the construction project

- There is no guarantee that there will be no obstacles, mistakes, or failures on the way from the goal to the result. The idea of using these mistakes for promotion or development is the birth of a culture of continuous improvement. The auditor is a direct mediator of this culture. That is why his participation is an integral part in the management of the construction project. Despite the fact that the profession a "construction auditor" is absent in Russian legislation, it is an important link in the construction industry and requires huge efforts. Thanks to this profession, the labor market has become more saturated with specialists who consider many aspects of this activity.

References:

1. Survey of LTD “Smart way”. Construction audit. Moscow city.2020 [Electronic resources] – Access Mode.- URL: https://smway.ru/stroitelnyj-audit/  ( date of treatment: 01.02.21)
2. Ashley Adams-Mott. Construction Auditor Procedures. 17.12.2018[Electronic resources] – Access Mode.- URL: https://smallbusiness.chron.com/construction-audit-procedures-67910.html ( date of treatment: 01.02.21);
3. Valerie Bolden-Barrett. Project Management Techniques in Planning & Controlling Construction Projects. [Electronic resources] – Access Mode.- URL:https://smallbusiness.chron.com/project-management-techniques-planning-controlling-construction-projects-72532.html ( date of treatment: 05.02.21)
4. Valentin Zarepin. What is project documentation in construction. [Electronic resources] - Access Mode.- URL: https://kakpostroitdomic.ru/proektnaya-dokumentaciya/proektnaya-dokumentaciya.html  ( date of treatment: 04.02.21)