AUDIT COMMITTEE SUMMARY
May 31, 2016
Audit of TCI Henry B. Gonzalez Convention Center Expansion Contingency Funds
Report Issued March 29, 2016
Background
As part of the Design/Build contract for the Henry B. Gonzalez Convention Center Expansion, contingency funds were established to ensure funds were available for unforeseen circumstances that may occur throughout the project. The contract provides for contingencies to pay for unknown conditions such as price escalation of a product; design changes in scope or errors and omissions; or necessary construction changes that are realized on site during construction.
Contingency funds include both a Design/Build (D/B) controlled contingency and a joint Owner and Design/Build controlled contingency (Shared Contingency). The D/B Contingency was $14,000,000 and is for Hunt-Zarchry's exclusive use to cover costs that are part of the cost of construction work and are not the basis for a change order. The Shared contingency was $3,264,000 with funds being shared and approved for use by both Hunt-Zachry and the City. Finally, a third contingency fund, the Owners contingency, was $3,500,000 and is part of the Transportation and Capital Improvements budget. This contingency is used only by the City's project team for any matters related to the expansion project.
Audit Objective
Determine if the HBGCC expansion project contingency funds are managed and used appropriately.
Audit Scope and Methodology
The audit scope included the review of contingency funds transactions from the inception of the HBGCC project through June 2015. We reviewed the three contingency funds - the Shared contingency, Design/Build (D/B) contingency and the Owner contingency.
Audit Conclusions
The HBGCC expansion project contingency funds are being managed and used appropriately. The HBGCC project team and Hunt-Zachry had adequate controls in place to ensure contingency funds expenditures were appropriately used for u...
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