Construction risk management: Higher education internal audit

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Construction risk management in higher education

Higher education internal audit back-to-basics video series

Nov. 8, 2024 · Authored by Robert J. Zellmer

Discover the essentials of construction risk management in higher education.

In this video, Baker Tilly’s construction project audit specialist provides an in-depth overview of key risks, planning approaches, testing and reporting strategies that guide successful capital projects for colleges and universities.

The video highlights the following:

Importance of construction audits: Construction audits are critical to identify and mitigate financial and operational risks associated with large capital projects on campus. Effective audits ensure accountability, transparency and contract compliance, which are vital to safeguarding institutional funds.
Capital project risks: Capital projects, particularly large-scale ones, come with inherent risks, such as cost overruns, scheduling delays and undelivered scope. The video underscores that these risks can stem from inadequate project controls, arithmetic and billing errors, lack of cost transparency and insufficient monitoring by project managers or contractors.
Audit engagement planning: Successful audits require thorough planning, which includes a risk assessment, contract review and clear communication with stakeholders. This ensures the audit is well-structured, adaptable and focused on the highest-risk areas.
Benefits of construction audits: Construction audits ultimately provide institutions with the tools to strengthen project controls, reduce costs, enhance contract provisions and increase oversight on high-risk projects. Regular audits help foster a more rigorous project management approach that aligns with institutional policies and protects resources.
Continuous improvement: Through identifying common errors and areas for improvement, construction audits offer insights that can be used to refine contract terms, improve documentation practices and reinforce that future projects benefit from lessons learned.