Cost Audits
A cost audit checks a project's claims and payments against its contract and records. We carry out independent cost audits for property owners, developers and contractors across New Zealand.
Overview
When you need a cost audit
A construction cost audit checks what has been claimed and paid on a project against the contract and the records. We carry out cost audits for owners, developers and contractors, either part way through a project or at close-out. This is part of our post-contract quantity surveying work, which covers the stage after the building contract is signed.
Our payment claims and variations work assesses claims during the project, and our financial reporting shows where the project stands now. A cost audit looks back over what has already happened.
You might need a cost audit when a claim doesn't line up with the records, or the final account doesn't match the payments. It also helps when you take over a project part way through and need a reliable opening position before you approve anything further.
What we handle
What a cost audit covers
A cost audit can look at any of these areas.
Claim and payment reconciliation
We compare what has been claimed with what has been paid, and check both against the contract.
Variation verification
A variation is a change to what the client requires after the contract is signed. We check how variations were instructed and valued under the contract.
Retention and final account review
We check the retention held and released under the contract, and we can also look at the final account.
Record review
We check the claims against the project records that are available.
In New Zealand
What the law says about auditing costs already paid
The Construction Contracts Act 2002 doesn't give a general right to audit construction costs already paid. Its retention money rules do give a narrower right to see records.
The party that retention money is held for can inspect the accounting and other records of that money at all reasonable times, without charge.
That right applies only to commercial construction contracts, where no party lives or intends to live in the building as their home. It is limited to the retention records.
Access to a contractor's other cost records can depend on the contract's terms, such as an audit clause. It can also depend on what the parties agree.
This is general information, not legal advice.
What you get
What the audit finds
You get our findings on where the figures line up with the documents and where they don't.
Advice only
Our findings are advice for you. They aren't a binding decision, and they aren't evidence prepared for a hearing.
Who this is for
A cost audit suits property owners and developers who are paying for the work.
It also suits contractors who want their own account checked before they submit it.
Cost audits sit alongside our disputes and final accounts work.
How it works
How a cost audit runs
- 01
Send the documents
Send us the contract, the claims and payments so far, and the project records you hold.
- 02
Where to look
We work out which parts to look at, based on what prompted the audit.
- 03
Work through it
We go through the figures, using the records you've sent.
- 04
Our findings
We tell you what we found.
Why AMS
What we bring to a cost audit
An independent view
We report what we find, whether or not it favours you, so you know where the figures stand.
Worked from the documents
The audit is done from the documents alone, so you don't need to arrange access to the site.
A basis for the next step
You can use the checked figures to inform a later payment or a negotiation.
Frequently asked questions
What if the project records are incomplete?
The audit can only go as far as the records allow, so any gaps limit what it can establish.
Can I hold off on a payment claim while a cost audit runs?
You can't hold off by leaving the claim unanswered, because an audit doesn't pause the Construction Contracts Act's timetable. A claim left without a payment schedule in time can become payable in full. Our payment claims page explains the deadlines.
Does the type of contract change what a cost audit can check?
Yes, because the type of contract sets how the contractor is paid. On a cost-reimbursable contract, the contractor is paid its actual costs. New Zealand Government Procurement guidance says those costs are usually worked out from the contractor's accounts and records. It says those records should be open to the client. An audit can use them to check whether the costs claimed are properly due under the contract. On a lump-sum contract, one price for all the works is agreed before the contract is awarded. That price can still change through variations and provisional sums. A provisional sum is an allowance for work that can't yet be defined well enough to price. An audit can check those changes against the contract.
How is a cost audit different from an audit of financial statements?
A cost audit looks at the claims and payments on one project. An audit of financial statements gives assurance on the statements as a whole.
Need a quantity surveyor for your next project?
Send through your plans or a short description of the project and we will come back to you.