The process of auditing contracts for compliance is central to an organization's contract administration.
This system is designed to give power to the prime and subcontractors so that they can manage their own information. This eliminates paperwork, and significantly reduces the time and effort required by all parties in the verification of data.
Contract Compliance Audit Process
For a given contract, on the first day of every month, quarter, or year, an audit is created.
The prime contractor is notified of the audit.
The prime contractors logs in to the system and provides subcontractor payment information for the audited time period.
Each subcontractor is immediately notified of the need to confirm or reject the prime contractor's data.
If confirmed, the audit is complete and no further action is required by anyone.
If rejected, an audit discrepancy is created. The prime and subcontractor are notified of the discrepancy and the option to resolve the issue without involving the contracting organization. In many cases, the discrepancy is due to differing time-frames or payments vs. invoices. In some cases, the dispute is real, and the contracting organization is contacted to provide support and mediation.
Once all payments are confirmed, and any discrepancies are resolved, the audit is complete and the data is used for reporting purposes.
At the end of the contract, the actual MWDBE rate is compared to the contracted rate and the prime contractor is given a score. This assessment may be used to decide future contracting opportunities.