Internal control services

info@consultconstruction.com
www.consultconstruction.com
• Setting up Controls in
Real Estate /
Construction Business

Consult Construction is a consulting firm with all governance,
compliance and IT related services related to the construction
sector under one roof.
Focus Areas :-
Corporate Governance
Management Audit
Project Budgeting and Monitoring
Indirect Tax Compliances
Corporate Training
Information Technology and Allied Services
ISO Implementation

Core Team
Mr.Sandesh Mundra - Indirect Tax & Management Audit
Mr.S N Mundra - Compliances
Mr.Samir Siddhpuria - VAT
Mr.Philip Fernandes - Excise
Mr.Dinesh Kavi - Labour Laws
Ms.Suman Mundra - Management Audit
Mr.Sanjay Christian - Management Audit
Ms Pooja Jajwani - IndirectTax Consulting
Authored - Technical Guide on “Business Controls, Monitoring and
Internal Audit of Construction Sector”

Authored the technical Guide on “Business Controls, Monitoring and Internal Audit of
Construction Sector” issued by ICAI in 2011.
One of our team members has been appointed to the three member National level Direct
and Indirect Committee of Builder’s Association of India (BAI) for year 2014. Successful
representation to the Ministry of Finance on service tax related issues on behalf of BAI.
Paper on “Accounting Controls in Construction Sector” chosen for publication in January,
2013 issue of National Journal of ICAI.
Paper on "Budgeting Challenges for construction sector" chosen for publication in August
2013 issue of National Journal of ICAI.
Our team members have acted as a speaker on various topics in seminars and study circle
meets organised at Mumbai, Ahmedabad, Gandhinagar, Navsari, Jamnagar, Rajkot and
Nadiad Branches and study circles of ICAI.
Our team members are Regular Column writers for Indian Construction (Journal of
Builder’s association of India), CA Associaton Ahmedabad & web portals like Consult
Construction.com & Consolidation of accounts.com
Our Team Achievements

Challenges Involved
 Improper definition of
BOQ
 Lack of Control on Design
and material changes
 Material Reconciliation
 Commercial Decision
Making – Procurement
 Statutory Compliances
 Asset Management
 Schedule Management
 Contractor Management
 Planning Cost Savings by
finding different ways to
engage the inputs – Man,
Material and Machine
including Resource
Management
 Monitoring Fund Flow
 Legal Documentation

Controls required
A) Operational Controls:
• Control over Labours
• Control over Materials
• Control over Equipment
• Documentation and records
• Timely accounts closure
• Employee & Salary Structure
• Quantity reconciliation of Contractor vs. Client billing
• Material Reconciliation

Controls required
B) Financial & MIS:
• Review of Budget vs. Actual performance
• MIS of all departments
C) Taxation & Compliances:
• Direct Tax
• Indirect Tax
• Labour Laws

Contracting

Customer Management
• Structuring of Agreements to sale / Sale deeds
• Setting up Billing and Collection Cycle
• Dealing with Cancellations /Transfers
• Setting suitable structures for post construction maintenance

Appointing Contractors
• Structuring of Tendering & B.O.Q.
• Letter of Indent
• Critical Work Order Clauses,
Like - Defect Liability period, BG, Mob. Advance, Extra
Items, Liquidity Damages, Rate Ecalation, Designing
proper BOQ, etc.

Budgeting

Types of Budgets
Indicative cost
Preliminary Budget
Detailed Budget for
Control
Mid Term Review
Budget
Final Closure
Cost

Tracking Budget Variances
 Contractor cost
 Material Cost
 Equipment Cost
 Overheads
 Synchronisation of Account heads with Budgetary Heads

Site Stores
Management

Store - Flow chart

Difficult Areas / Material Management
• Material Master
• Procured Material Controls
• Returnable Material Reco
(FIM = Free Issue Material)
• Loan transactions
• Outward Process
• Control over loss of material
• Physical verification process
• Scrap Material & its Disposal

Other Areas
- HR
- Equipment
- Accounts
- Taxation
- Other Compliances

Controls/Planning of Staff & Labour
Ghost Labour
 Working in both supply & measurement
Incomplete & its recovery / Repay for Duplication of
work
Staff Salary package & Project Transfers
Attendance and Mess Controls at Site

Equipment Controls
 Decision Making –
Hire / Purchase
 Control areas in both cases Hired & Own, like
– Vehicle Report,
– Fuel consumption analysis, Due dates of permits / Insurance
& Taxes etc..

Accounts
 Decession of Accounting whether
Centralized or Decentralized
 Accounting with inventory
 Appointment of proper local Consultants for Statutory
compliances & Assessments i.e. VAT & Labour Law

Customized Controls in Books of
Accounts – Tally / Any ERP
• Common chart of accounts (Technical vs.
Financial)
• Inventory & Labour Masters
• Defining BOQ items
• Define Material inward process
• Tracking Free Issue Material (FIM)
• Linkage with MIS
• Exceptional reporting

Tax Structuring – Indirect Taxes
• Structuring of Agreement
• Payment Schemes
• Point of Taxation
• Sub-Contractor Planning
• Avoid Tax Overlap
• Reverse Charge Mechanism
• Procedural Issues

Labour Laws
Compliances of basic following laws like –
• Labour License
• Minimum Wages & Bonus
• EPF
• Workmen Compensation Insurance / ESIC
• Labour Cess
• Bonus
• Labour Welfare
• Child & Women Labours etc..

- Project Closure

Project Closure
• Closing Reconciliations
• Quality Controls
• Preparation of final bills
• NOC from all Departments
• Documentation of Variations
• Documentation of Disputes
• Future Learning

In House Training
• Educating the users about the need to have
better systems
• Upgrading the level of Knowledge that the
users possess
• Ensuring smoother coordination among
various stake holders
• Evaluation

Some of the companies who have attended our
workshops

• Thanks

Internal control services

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