A construction project could have at least five different professions involved – builders, general contractors, developers, subcontractors and owners – and a lot of moving parts. When a construction project goes wrong, there are a lot of ways it can go wrong. Perhaps a project is delayed, or has gone over budget, or is marred by defects, or turned out to be based on fraud in the first place. When these issues end up before a judge, lawyers hire forensic accountants to clarify the numeric portion of their story.

At Engel & Engel, we are financial experts in the area of construction litigation. We have served as consultants and experts for both plaintiffs and defendants. Our clients include builders, contractors and developers. We review financial records, and we provide expert testimony in the construction litigation arena. Here is how we support construction litigation attorneys.

Our California Forensic Accountants’ Areas of Expertise

Construction Fraud Investigation

We are involved in construction fraud, where fraud can occur in so many different ways, from theft, to money laundering, to billing. We investigate this kind of fraud, to provide the evidence for litigation that something is fraudulent or false.

Construction Damage Analysis

If the cost of construction defects is disputed, we conduct a thorough cost-of-repair analysis and illustrate what a set of defects actually costs.

Construction Defect Damages

Construction defects are often costly to repair, and sometimes result in significant delays. We calculate the costs associated with these defects, providing important support for legal claims.

Construction Delay Damages

Many of our clients are faced with retention funds that make up a large percentage of their net worth. Delays in construction could result in substantial financial losses. Our calculations of such losses are based on methods that have been consistently recognised in the construction industry, such as the Eichleay Formula in calculating overhead cost of project delays.

Eichleay Formula Calculations

Delays, in turn, tend to lead to increasing overhead costs. My team uses the Eichleay Formula, which calculates the dollar per day overhead costs for each day a project is delayed to help us calculate the financial implications of a project’s hold-up.

Construction Accounting

Every construction project involves large amounts of money and multiple transactions. We test accounting records to verify accuracy and detect any form of financial fraud.

Investigation of Change Orders

Change orders can sometimes increase costs substantially or slow the project down, so we go through them to see if they were needed and how big an impact they have.

Bid Analysis

Disputes can arise about the bidding process. We inspect bids to make sure they were fair and accurate; if there was a problem that influenced the contractor’s chance of completing the project.

Construction Cost Investigation

Cost overruns on construction projects form another class of sources of dispute. We ascertain what these overruns are based on and whether they have a legitimate basis.

Construction Loan Analysis

We review loan agreements and drawdowns to ensure proper use of construction loans and to detect irregularities.

Construction Budget Analysis

We check the budget of the building’s construction to make sure that the money allocated for the project was used in the correct manner throughout the process.

 

Expert Witness Testimony

In addition to investigating and analysing the property and financial details of a case, Engel & Engel offers expert witness testimony to outline financial issues, thus helping the attorney to present the case in court in a straightforward and convincing fashion to the jury.

For example, in construction litigation cases, a forensic or certified accountant’s financial expertise may make the difference between the success of an attorney’s case and the failure of his or her client. When called upon to assist attorneys and their clients, Engel & Engel offers its experience, qualifications and expertise to make sure that all of the financial facts and issues are properly researched and presented.