Construction audit fundamentals: Analyzing and monitoring project labor costs

In today’s volatile construction environment, the success of a project hinges not only on execution but on the clarity and enforceability of its contractual terms — especially those governing direct labor. During on-demand webinar, we’ll explore why a thorough review of labor-related contract provisions is essential to managing financial exposure, ensuring billing accuracy and maintaining project integrity.

This session discusses how vague or unfavorable labor terms can lead to significant cost overruns, and how proactive contract analysis can mitigate these risks. It also examines the importance of labor rate decomposition — breaking down hourly rates into their component parts (base rate, burden, overhead, etc.) — to detect duplicate charges, hidden fees and markups and validate billing compliance.

Finally, this webinar recording highlights best practices for monitoring labor throughout the project life cycle, including how to track hours, validate labor classifications and ensure that labor charges align with contractual expectations. Real-world examples illustrate how overlooked labor terms and weak oversight can result in costly disputes — and how to avoid them.

Objectives covered:

• Discover how contract terms related to direct labor impact project cost and risk.
• Discover how to perform labor rate decomposition to identify overcharges and ensure compliance.
• Explore strategies for monitoring labor charges throughout the project to prevent abuse and ensure transparency.

This on-demand webinar is intended for internal audit professionals, facility administrators, CFOs, COOs, directors of capital projects, real estate developers, project professionals and other professionals involved in construction project management and facilities development.

For more information on this topic, or to learn how Baker Tilly construction audit specialists can help, contact our team.