The purpose of the (Internal Audit Procedure) Project Quality Audit is to ensure that the Project Quality System is effectively operating and achieving the levels required in compliance with the Project Quality Plan, ISO 9001 requirements, and Quality Policy. Moreover, to identify any improvements required within the Project Quality System.
So, friends today in this article we have discussed all the major facts and procedure, technical guide on internal audit of construction industry. so lets start to learn about Internal Audit Procedure in Construction.
What is a construction site audit?
An audit is an official inspection of a company or its accounts. We usually think of auditing in the context of financial evaluations, but it can also refer to other types of evaluations. The purpose of the audit is to ensure that work is carried out to a high standard and in accordance with agreed contracts. It can provide an independent or objective view of the progress and conditions of the site. You must identify gaps and areas for improvement.
Construction site audits can be performed internally or by external parties. Individuals may choose to initiate an audit. Sometimes it is the client or the architect who wants to see if the project is going according to plan. Other times it may be the main contractor who wants to check if their subcontractors are sticking to the financial agreements. Sometimes a government agency may conduct a site audit, especially for things like health and safety.
ISO 9001 Quality Management System Requirements Project Quality Plan
Corporate Quality Manual
Corporate Quality Assurance Manual
- PMT Project Management Team
- CMR Corporate Management Representative
- CQM Corporate Quality Manager
- SQM Site QA/QC Manager
- SQE Site QC Engineer
- PM Project Manager
- SME Senior Mechanical Engineer
- SEE Senior Electrical Engineer
- AU Auditor
How to do a Internal Audit?
Completing a construction site audit is never an easy task/Job. Only the word “audit” conveys the meaning of the decision and the risk of consequences. Your contractor and other on-site personnel may be immediately suspicious or defensive at the idea of locating.
However, completing a construction site audit can be incredibly valuable to both the client and the contractor. You can improve relationships, reduce costs, and improve health and safety. In an industry with one of the highest rates of workplace injuries and persistent delays, any measure that improves project management should be welcomed.
Internal Audit Procedure in Construction 2023
- An Internal Quality Audit shall be conducted by individuals (auditor/s) duly assigned by the Corporate Management Representative. The auditor shall be competent and qualified from a recognized organization. Auditor’s CV shall be submitted to PMT for approval. This is part of Internal Audit Procedure.
- Internal Audit shall be conducted on a quarterly basis, as per the Internal Audit Schedule duly approved by the Employer. Audit agenda and the exact date of the audit schedule should be submitted to Employer/PMT for approval. Accordingly, the assigned auditor shall provide a Detailed Audit Plan thirty (30) calendar days prior to the actual audit schedule to the project site. Employer/PMT shall also be notified and invited to witness and participate in all Internal Audit.
- Each process from the Project Quality Plan and approved procedures shall be part of the criteria for the Quality Audits by an auditor, independent of the activity.
- All areas of the project sites should be audited and shall be assessed against their procedures.
- The area being audited must be assessed to the compliance of their pertinent procedure. Random checks shall be carried out to ensure compliance. (Internal Audit Procedure)
Read Also: Document Control Procedure 2023
- After the audit, all observations in deviation to the procedures of the Quality Plan (PQP) shall be recorded and recommendations of the auditor shall be detailed and documented on the Initial Internal Audit Report form.
- Observations shall be assessed and shall be graded as follows:
- Not applicable (on time of audit)
- For Improvement
- Weak Points
- In case non-conformance was identified, the auditor shall detail the non-compliance to the Non-Conformance Report.
- After preparing the reports, the Auditor and Site QA/QC Manager shall initiate a Closing Meeting to be attended by all concerned personnel. The initial report shall be disseminated to all attendees, particularly to the Project Manager.
- The Auditor shall discuss the non-conformances, weak points, points for improvement, and his recommendations to the meeting. This is also the part of Internal Audit Procedure.
- In the event of any non-compliance, the NCR shall be issued to the appropriate person responsible in the area where non-conformance was observed. He will be required to provide the following:
- The reason for Non-Conformance
- Proposed Corrective Action
- The effective date of the Corrective Action
- Root Cause Analysis
- If necessary, a secondary audit shall then be carried out to ensure corrective action has been implemented. Non Conformance shall be declared “closed” upon satisfaction of the auditor, otherwise, a re-audit shall be conducted.
- The Site QA/QC Manager shall discuss the audit findings in the Project Management Review Meetings.
- The contractor shall submit a copy of the Audit Final Report to the Employer/PMT for each audit within ten (10) calendar days of its audit completion.
- Quality records shall be kept in accordance with Control of Quality Records Procedure of Quality Control Plan.
Which Approach is more Effective?
Consider how your team will implement your review. Will they be involved from the start of a construction project? Will construction review (Internal Audit Procedure) be made an integral part of construction activities? Or will the review be part of the project before the final payment or advance is released? Each approach will provide value, however, by creating a “trusted but verified” feeling to the overall project that the construction compliance professionals involved will have from the start of the project.
This can lead to more compliant behavior on the part of contractors without hampering the progress of the project. On the other hand, just involving your compliance team in the project closeout process can delay final payments to contractors due to the time investment for data collection and review.
Why do you need to involve an auditor?
While the construction manager and owner’s representative generally oversee the financial aspects of the project, their role differs from that of an auditor. Consider the role of construction manager. It focuses on the project, schedule, contractors, and construction methods.
That person also focuses on finances but from the contractor’s point of view. If an owner’s representative is involved, this person focuses on managing construction resources, advising the owner on construction methods and procedures, and ensuring adherence to the architect’s plan and schedule. It also reviews the contractor’s request for payment to determine if it is appropriate.
What the auditor contributes focuses on consolidating financial control over the process. He audits financial transactions to ensure contract compliance and works with the owner’s representative to manage the entire process. The auditor reviews the cost structure of the project, which includes subcontractor costs, purchase order costs, contractor relationships, and contract performance.
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