Accepting the ledger as the claim
Treating recorded cost as claimable without tracing it to source or testing its allocation.
Expert witness
Forensic Construction Accounting
Forensic construction accounting connects a claimed figure to the records behind it, job cost, payroll, invoices, subcontract payments and the general ledger.
Construction accounting analysis may examine coding practices, source documents, allocations and other relevant information. The available support and its limitations are described in relation to the questions presented.
The work traces claimed amounts back through the accounting records to source documents, tests allocations and rates, and identifies costs that are duplicated, misallocated, or unrelated to the events pleaded.
Job-cost systems organize information for project-management purposes. Cost codes, allocations and general accounts may need context when used to examine a later claim. An inquiry may consider how the system was used, the records supporting entries and any assumptions or limits affecting reconciliation.
A reconciliation may identify information that supports or challenges a claimed amount, including omissions, allocations and other contributing factors. The findings depend on the available records, not on whether they favor a particular party.
Possible assignment considerations
In practice
- 01
Understand the accounting as used
Establish how the job cost system was actually operated on this project, including coding and allocation practice.
- 02
Trace claimed cost to source
Follow amounts from the claim through the ledger to invoices, timesheets and delivery records.
- 03
Test allocations and overhead
Examine how shared and indirect cost was distributed and whether the basis withstands scrutiny.
- 04
Report the reconciliation in full
Set out what traces, what does not, and what the records show that neither party asked about.
Considerations and limitations
Questions and limitations to consider
Ignoring how coding was really used
Assuming a cost code means what its name suggests rather than establishing project practice.
Explaining material support and uncertainty
Presenting the reconciliation selectively, which is the point at which it stops being forensic.
Forensic Construction Accounting
Talk to a consultant
Also in this practice
Consulting Expert Witness Opinions & Testimony
- DelayTechnical opinions on delay events, schedule effects and related contract administration.
- DisruptionTechnical opinions on productivity effects, including effects without a change in the completion date.
- TerminationOpinion on the circumstances and consequences of a termination.
- EstimatingTechnical estimating analysis addressing scope, quantities, pricing and assumptions.
- RepairOpinion on repair scope, method and cost to restore what was damaged or defective.
- Completion CostsTechnical analysis of remaining work and construction completion costs.
- Estimating
- Repair
- Completion Costs
- Construction DefectsOpinion on the existence, cause and cost of remedy of alleged defects.
- Construction Industry StandardsConstruction-practice opinions grounded in the project facts and records.
- Construction Contract AdministrationOpinions on day-to-day administration of contracts and subcontracts from a contractor project manager’s perspective.
- Delay DamagesTechnical analysis of delay-related costs, supporting records and assumptions.
- Contractor, Owner & Subcontractor Damages CalculationsDamages quantification for different roles in the contractual chain.