Responsible Division: Vice President for Finance and Administration

Approving Official: Vice President for Finance and Administration

Effective Date: April 8, 2019

Last Revision Date: New Policy

1. INTRODUCTION
   1. This policy describes the procedures for attestations and auditing of the construction program in order to ensure accurate financial accounting and administration of construction Contracts.
2. POLICY
   1. This procedure describes the attestation requirements and auditing processes to be utilized in administration of Construction Management and Design-Build contracts. It describes the pre-contract, mid-contract, and contract completion requirements to be utilized in the audit thereof.
      1. SELECTION OF A THIRD PARTY REVIEWER
         1. To ensure proper review of financial records is performed for Construction Management and Design-Build projects whose construction cost exceeds $2,000,000.00, Florida State University may select an independent review agent to be chosen via one of the following:
            1. Individual project Request for Proposals (RFP) process compliant with F.S. 287.055.
            2. Utilization of pre-negotiated shared initiatives contract.
            3. Utilization of University continuing services contract for attestation and auditing services compliant with F.S. 287.055.
         2. For those Projects whose construction costs do not exceed $2,000,000.00 or for continuing contracts as per F.S.287.055, the University may elect to accept the attestation of an independent accounting firm as provided by the construction company.
      2. REVIEW AND PRE-CONTRACT SUBMITTAL REQUIREMENTS FOR PROFESSIONAL PRE-CONSTRUCTION SERVICES
         1. To ensure preconstruction costs represent reimbursement of actual adjusted salary rates, the University shall request an accounting of construction team member salaries and add-ons. After selection, and prior to any Contract execution, the Construction Manager (CM) shall submit historic documentation to the University demonstrating evidence of actual base pay and multiplier add-ons for all team member salaries. Current rates shall be recorded on the FSU Multiplier Form (Forms section) and utilized during negotiation of phase fees to be paid by the University to the construction company for pre-construction services. Supporting documentation may include:
            1. Recent payroll reports demonstrating actual payment amounts for individual team members. This report shall be in sufficient detail to assess base salary and all adjustments.
            2. Previously completed FSU Multiplier Forms for each individual team member demonstrating all actual add-ons and employee benefits not to exceed approved University maximums.
            3. Current company personnel manual describing company benefits, including holiday, vacation, sick leave, maternity/paternity, administrative leave, other paid leave, retirement benefits, vehicle allowances, etc.
            4. Other materials as required to fully document individual salary conditions and/or benefits.
            5. A statement from an independent accounting firm, on company letterhead, indicating that they have reviewed and found the information to be as represented by the construction company and that they attest to its accuracy.
         2. The Construction Manager’s letter of transmittal to the University shall be on company letterhead and include a statement indicating that the information is true and accurate, up to date, and will be maintained as so, unless specific changes are authorized by the University. The statement shall be attested by a company principal or officer authorized to commit resources of the firm.
      3. PRE-CONSTRUCTION SERVICES FEE
         1. Upon satisfactory review, the submitted base rate with approved add-ons will be utilized to develop a lump sum pre-construction fee to be accepted in the Contract for Pre-Construction Services. No changes will be made to the hourly rates or pre-construction fee, unless specifically approved by the University and amended by contract update.
      4. MANAGEMENT FEE REVIEW AT DEVELOPMENT OF A GUARANTEED MAXIMUM PRICE (GMP)
         1. If no changes have occurred to team member(s) rates at the time a GMP is proposed, the CM may elect to provide a statement indicating that the previously reviewed and approved base rates with adjustments remain unchanged, the company may provide a written statement attesting to their continued accuracy. Such statement shall bear the company seal.
         2. For any construction team member whose base and/or adjusted rate has changed, or for any team member whose rates were not reviewed previously, new documentation shall be submitted for independent financial review prior to acceptance of the GMP. All requests for changes or adjustments to base salary rates, multiplier rates, or personnel, must be submitted to the University Project Manager in writing and authorization received prior to inclusion in the GMP.
      5. MID PROJECT AUDIT
         1. For projects whose construction costs exceed $2,000,000.00, at approximately one third to one-half construction completion, the University Project Manager shall select a representative project Pay Application for financial audit by the University IGS or an Independent Reviewer. This review shall examine the requested payment in sufficient detail to determine whether the request is financially/mathematically accurate and procedurally complaint with the negotiated GMP terms. Should discrepancies be discovered, the University Facilities Department shall seek appropriate remedies to bring the financial status into contract compliance. Remedies may include, but are not limited to: project credit, deductive Change Orders, and Contingency Modifications.
      6. POST CONTRACT COMPLETION AUDIT
         1. After Final Completion and prior to Project Close-Out, the University may perform its own internal audit of the project financials and procedures. The University may, also, elect to employ an Independent Reviewer to perform audit responsibilities. The construction company shall provide ready access to all project documents and other financial records, including subcontracts. Items to be reviewed include but are not limited to: all Project Contracts, Amendments, Change Orders, Change Directives, Contingency Modifications, Pay Applications, Subcontractor payments, CM staffing costs, and other general conditions costs. The University reserves the right to request reimbursement for any previously paid expense found to be out of compliance with the Contract terms.
3. LEGAL SUPPORT, JUSTIFICATION, AND REVIEW OF THIS POLICY
   • F.S. 11.45, 218.39, 287.136, 1010.30, 1010.33