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Management audit
The construction project management and control system is a strategic business development planning tool for construction company owners and managers. For investors, precise and up-to-date financial indicators are needed to assess risk. This includes information about the company as a whole, its divisions, areas of operation, and each construction project individually. In other words, to understand what is happening in the company at any given moment, specific figures are essential. The responsibility for reporting data to management typically falls to the technical director, if one is present, or the project manager of the specific site. However, not all the data needed for analysis is provided in an objective, structured, and timely manner.
Why does this happen?
In most companies, there is no operational accounting and preventive control system for project implementation. The evaluation of various resources – such as materials, finances, equipment, and labor costs – is carried out by different departments, including finance, legal, supply, and human resources, often using different accounting systems. In such a situation, all the data obtained through various methodologies must be aligned, analyzed, and the relationships between events established in order to make further management decisions. This process can take anywhere from several days to weeks. As a result, without objective information about the project’s status, company management essentially has no way to accurately assess risks or influence the project’s progress in a timely manner. This scenario can lead to inefficient project development, financial losses, penalties, and potential litigation with the client.
What does management audit include?
This service includes the development and implementation of a management and control system for construction projects based on objective facts and data on events in the project received from the BIS system. Such an approach allows the management to identify and eliminate the risks of project failure and financial losses in a timely manner.
Why is it necessary to conduct a management audit?
The introduction of a system and a systematic approach to the management and control of construction processes in the company not only reduces the risks of managerial errors on the part of the project management but also creates an environment in which the owner is not dependent on a particular employee.
Most often, construction company management faces the following problems and risks:
- The lack of complete and objective information about the status and details of the implementation of construction projects;
- Delayed receipt of information about the status of the project;
- Obtaining false information;
- Concealment of information by the project management;
- Ignoring or non-fulfillment of the terms of the concluded construction contract;
- Problems of cash flow or financing of a construction project;
- Passive management by the project management team;
- Insufficient control and management of concluded contracts and subcontracts;
- Disputes arising (or being ignored) among other participants in the construction process (the client, the designer, and the technical supervisor);
- Lack of systematic control over the construction budget;
- Conclusion of subcontracting agreements that exceed their contractual value;
- Corrupt actions on the part of the project management team.
The application of the BLV Advisory Group systematic approach allows the company owners to improve transparency of processes, obtain an independent opinion on the state of processes, and reduce the risk of existential errors.
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