technical audit guideline

7/29/2019 Technical Audit Guideline

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Paper Title:

Establishing a Technical Auditing Guideline Document for Use by the InternalAudit Governance Board Secretariat and the Ministry of Public Works, R.L.

Prepared by:

John Constance, ConsultantProject Management for Construction and Infrastructure

Introduction:

The Act that established the Internal Audit Governance Board Secretariat, orIAGBS, empowers the Secretariat to audit the Public Works Ministry of Liberia. Inorder to ensure smooth working relation in this endeavor and that bothGovernment offices achieve their individual public mandates and get the bestresults of the audit, it is necessary for the two public offices to established a

technical auditing guideline document that facilitates the standards, generalprocedures and best practices of conducting technical auditing of the planning,design, construction and operations and maintenance processes of publicinfrastructure in Liberia.

This paper intend to justify the need for documenting technical auditingguidelines as a working document for the Public Works Ministry and the Internal

Audit Governance Board Secretariat.

Background Information:

The Ministry of Public Works of the Republic of Liberia, or MPW, is responsiblefor providing adequate, safe, cost-effective and efficient public infrastructure orcivil engineering system within the borders of Liberia, including the facilitation ofcross-border infrastructure communications with neighboring countries. MPWgoal is to ensure the country has advantageous infrastructure network, standardconstruction and standard urban regulations that meet global engineering,provide services through the construction/maintenance of public infrastructure,zoning laws and regulations and construction contract supervision, ensuring allthis benefits the population, stakeholders, and the efficient and effectiveoperations of the Government of Liberia.

The Internal Audit Governance Board Secretariat, or IAGBS, is responsible toshape the financial management capability within the various ministries andagencies of the Liberian government, by supporting national priorities, andcooperating and collaborating to promote fiscal control. The IAGBS is to conductunremitting audit to ensure efficient risk management, governance and controlprocesses. The Secretariat is responsible to audit accounts and disbursementtransactions, payroll system, bank settlements, procurement practices, systemfor budgetary control, and asset management system. This is intended to savethe Liberian government from losing millions of dollars at public functionaries.


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The core link between the responsibilities of MPW and the IAGBS as it relates tothis Paper is the audit of asset management system. The MPWs infrastructureasset management require planning, designing, estimating, tendering,supervising construction, and operating and maintaining public civil engineeringsystems, and in order to achieve fiscal discipline and gain from lessons learned,the MPW need an independent partner, like the IAGBS, to provide evaluation

and recommendation to assist the Executive branch of Government with greaterinnovation and new technologies that can improve the performance of publicinfrastructure and increase public trust in the MPW.

Justification for Technical Audit:

To ensure the MPW achieved its goals, services and critical benefits, MPW mustundergo technical auditing of infrastructure projects undertaken by the Ministry,which is a step in the right direction towards ensuring that public infrastructureprojects undertaken in Liberia are appropriately designed, constructed, andoperated and maintained.

Financial auditing of public funded projects is ongoing but it is the technical audit,which have not received the much-needed attention. The need for technicalauditing is based on the fact that very recently, the public has tended to believethat some of the projects implemented by the MPW have either failed pre -maturely and/or are in the process of exhibiting distress eventually leading tofailure in the near future. The paradox is that it has not been possible to portionaccountability to parties involved in the contract. It is hoped that MPW authorities,administrators and partners will start thinking about conducting technical audit ofinfrastructure projects in order to guarantee that the government and public ingeneral get value for investment incurred.

The majority of public infrastructure in Liberia is constructed or rehabilitatedthrough a process of design by an appointed consultant and construction by acontractor, adherent to the project specification. These arrangements have bothsuccess and failure in shaping the way the project is implemented. Oncompletion of construction, the Governments Auditor General may carry out afinancial audit, but no independent technical audit of whether the infrastructurehas achieved what it paid for, is carried out.

On completion of construction, a MPW team consisting of the project officer,design engineer, materials engineer, maintenance engineer and other relevantstaff inspects the structures, together with the consultant, and identifydeficiencies and defects, which the contractor has to correct, within the defectsliability period, before demobilizing. This post-construction inspection presentlycarried out is fundamentally a visual evaluation and does not usually pinpointwhether the specified materials have been used during construction or if thequality of the construction conforms to the design specification. Technical orcontractual weaknesses and construction defects that are not identified at thistime often result in premature distress, which may occur after the specifieddefects liability period, making it difficult for the MPW to have sufficient recourseto claim from the Contractor.


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The use of a formal technical audit initiated before, during, and after constructionallows the MPW to identify whether the ministry has in place the effectivemanagement system to include all the necessary quality assurance and qualitycontrol measures, and identified risks and reduction measures, and ensure theparties involved in the contract have given the Client what it paid for. This

involves a more detailed assessment than the post-construction inspection interms of compliance of the materials and construction with the projectmanagement and design specifications.

The primary objective of independent technical audit is to assist the MPW andConsultants appointed to carry out technical audits with assessing the requiredscope of the audit and identification of the appropriate requirements andtechniques to be employed for such audits. The primary aim of these audits is toensure that the MPW has in place the engineering project management system,including quality management, risk management, and change managementsystems in place before, during and after construction, and that the infrastructure

is constructed to the design specifications, the Contractor is paid as per thecontract conditions, and the facility is smoothly rolled into operations andmaintenance through an effective O&M training program that provides thepublic/end-users the education required to use the facility.

Technical Audit Guideline Document:

The technical audit guideline shall be a document agreed and accepted by bothMPW and IAGBS to ensure the process is conducted effectively and efficiently.This document will include the following outline, which must be detailed incooperation with both parties and the documenter.

Section One: General information1.Introduction

Background

Structure of the Guideline

2.Technical Audits: General Procedures

Introduction and General Requirements

Role and Responsibilities of the Technical Audit Team

Relationship of the Auditor with the MPW, IAGBS, Consultant andContractor

Project Familiarization Initial Audit

Intermediate Audit

Final Audit

Section Two: Practical Aspects3. Data Requirements

General

Project Familiarization


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Consultants Design and Drawings

Tender Documentation

Bills of Quantities

Initial Audit

Intermediate Audit Laboratory Test Results

Construction Records Quality Assurance and Quality Control Data Site Correspondence Variation Orders and Contractors Claims Measurement and Payment Certificates Project Management Problems and Issues

Final Audit Construction/Completion Report Performance of the Infrastructure to Date Quality Surveys Information on Lessons Learned Required

4. Scope of Post Construction Audit

Assessment of Data and Compliance with ContractualRequirements

Variability Structure Materials Compliance Construction Quality Other Provisions

Scope and Complexity of Post Construction Audit

5. Post Construction Audit Procedure General

Uniform Sections

Response Assessment

In Situ Strength

Observations

Tests and Commissioning

Section Three: Analytical Aspects6. Assessment of Audit Results

Contractual Implications

Design Compliances

Material Compliances

Construction Compliances

Quality Compliances

Risks Management Compliances

Change Management Compliances

Consequences and Implications


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7. Reporting

General Information

Familiarization Phase

Initial Audit

Intermediate Audit

Final Audit

Section Four: References and Appendices

References

Appendix 1: Information Checklist For Technical Audits

Appendix 2: Abbreviations List of Tables Type and Scope of Post Construction Audit

List of Figures Layout of the Guideline Auditing stages, Flowchart Technical Audit, Flowchart

Conclusion:

The need for technical auditing of the Public Works Ministry cannot beoveremphasized, as this will assist the ministry obtained an establishedinfrastructure management system or process and manual or publication that canexplain to the public as well as international financing bodies and other investorsthe efficiency and accountability of the ministry in the planning, design,construction, and operations and maintenance of public infrastructure in Liberia.To ensure the Public Works Ministry and Internal Audit Governance BoardSecretariat conduct technical auditing cooperatively and collaboratively, it isimportant both institutions agree on a technical auditing guideline that includes allthe required phases, processes and procedures that promotes the enacted

objectives and visions of both organizations and the mandate of Executivebranch of the Government of Liberia.

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About the Author:

John Constance is a Liberian with degrees in Architectural Engineering andConstruction Engineering, and a Masters Certificate in Project Management. Heis a member of the UK institute of Civil Engineers, the US Project Managementinstitute and the American Society of Quality, and an Affiliate member of the

American Society of Civil Engineers. He has more than 23 years work

experience in construction and infrastructure planning, design, construction andoperations and maintenance, starting his career with the Ministry of Public Worksin Liberia. For the past six years he has worked as UNICEFs constructionauditor in Indonesia, and Technical Officer for a US NGO in Sothern Sudan, andrecently ended a 22 months assignment in Afghanistan for a US private companyserving as Senior Quality Assurance and Construction Manager and ProjectManagement Capacity Building Advisor respectively. He is presently doing hisdissertation with the University of Liverpool that will lead to a Masters degree inProject Management for Construction and Infrastructure in 2013.

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