UNIVERSITY OF HAWAII AT MNOA DEVELOPMENT OF THE CLARENCE T.C.

CHING ATHLETIC COMPLEX February 2014

____________________________________________________

University of Hawaii Office of Internal Audit

Office of Internal Audit

February 2014

To the University of Hawaii Board of Regents and University of Hawaii at Mnoa Vice Chancellor for Administration, Finance and Operations During November 2013, the University of Hawaii Board of Regents Committee on Independent Audit (Audit Committee) requested that the Office of Internal Audit (Internal Audit) review the development and construction of the Clarence T.C. Ching Athletic Complex (Complex). The Complex is expected to provide grandstand seating for approximately 2,500 fans as well as two sand volleyball courts accommodating 800 fans. The initial $10 million of funding for the Complex consisted of a $5 million State of Hawaii appropriation received in November 2009, which was a matching requirement to the December 2008 $5 million pledge from the Clarence T.C. Ching Foundation (TC Foundation). The University of Hawaii at Mnoa Athletic Department (Athletics Department) has received $3 million from the TC Foundation to date. The development and construction of the Complex is managed by the University of Hawaii at Mnoas Office of Facilities and Grounds (OFG). Groundbreaking for the Complex occurred during July 2012 with an anticipated completion date of July 2013. The completion of the Complex is associated with the Athletics Departments Title IX plans to achieve gender equity in athletics. Internal Audit was informed that the womens locker rooms and offices on the first floor of the Complex was required to be completed by January 28, 2014 in order to avoid NCAA sanctions. Internal Audit was also informed that a Temporary Certificate of Occupancy was received and dated January 8, 2014 that satisfied NCAA requirements. Aggregate development costs associated with the Complex pursuant to signed contracts approximated $13.7 million. OFGs current estimated cost at completion is approximately $16.7 million with an anticipated completion date of April - May 2014. The source of funding for development costs in excess of the $10 million described in the first paragraph was University of Hawaii revenue bonds, additional State of Hawaii appropriations and the University of Hawaii at Mnoa Capital Renewal and Deferred Maintenance fund. The delays and additional costs are primarily attributable to the following: Asbestos removal: During July 2012, unexpected asbestos was detected in the existing underground concrete encased conduits. Asbestos testing and removal negatively impacted the foundation work and construction schedule by 45 days at an additional cost of approximately $160,000. HVAC excluded from construction contract: Although included in the general contractors construction bid documents, the University informed the general contractor that their HVAC cost estimate of $995,000 would be

excluded from the construction contract due to lack of funds but would be added through a change order when the funds became available. Upon notification in November 2012 that they could proceed with the HVAC work, the general contractor engaged a HVAC subcontractor and ordered the HVAC materials. The HVAC subcontractor subsequently identified design drawing conflicts between structural, mechanical and electrical work. OFG and the construction manager determined that the exclusion of the HVAC work at construction commencement added 122 days to the construction schedule. Additional architecture services: OFG informed Internal Audit that the architect was instructed to exclude required design services such that the architects contract would not exceed $1 million with the understanding that these services would be added later. The resulting change order amounted to $335,000. Other: Weather related issues added 21 days to the construction schedule. The accompanying report identifies a variety of reasons contributing to the delay in the completion of the Complex (anticipated completion date of July 2013) as well as the unanticipated cost overruns of approximately $1.7 million ($3 million additional contract costs less the expected $335,000 of architectural services and $995,000 of HVAC work.). Certain reasons such as the discovery of asbestos in underground conduits were unforeseen. However, more comprehensive design plan reviews and increased and timely collaboration by OFG and its service providers with respect to construction expectations and costs could have reduced the number of delay days and cost overruns.

Sincerely,

University of Hawaii Office of Internal Audit

Clarence T.C. Ching Athletic Complex February 2014

Background
Project Description: The Clarence T.C. Ching Athletics Complex (Complex) will include a three-story building on the mauka side of the existing Clarence T.C. Ching Field. The facility will provide grandstand seating for approximately 2,500 fans and a sand volleyball venue with 800 seats and two competition courts. The interior of the building will include offices, locker rooms and a meeting room for women's soccer, cross country, track and field, and sand volleyball. The Complex is expected to also include space for concessions, a computer center, a ticket office and broadcast booths. The Complexs development requirements include demolition, site construction, landscaping and irrigation, utilities, concrete, masonry, structural steel, reinforcing steel, thermal and moisture protection, membrane waterproofing, traffic coating over exterior surfaces of precast concrete bleachers, fluidapplied roofing, doors and windows, finish hardware, glazing, louver finishes, gypsum board, acoustical ceiling, acoustical insulation, ceramic tile, resilient tile, painting, toilet partitions, toilet accessories, signage, metal lockers, elevator, mechanical, HVAC, plumbing, electrical, fire alarm system, Leadership in Energy and Environmental Design (LEED) requirements and other incidental work. The Complex will be a LEED Certified Building. Timing and funding: During 2008, the Clarence T.C. Ching Foundation (TC Foundation) pledged $5 million to the University of Hawaii at Mnoa Athletic Department (Athletics Department) through the University of Hawaii Foundation for the construction of the Complex. $1.9 million was a guaranteed donation, while the remaining pledge of $3.1 million was contingent upon the Athletics Department obtaining the additional funding necessary to complete the Complex. During November 2009, the State of Hawaii appropriated $5 million through a general obligation (GO) bond fund allotment as the additional funding. Additional funding from the State of Hawaii was received during May 2012 and August 2012. As of June 30, 2013, the Athletic Department has received $2 million from the TC Foundation. The remaining $3 million will be received in installments ($1.5 million scheduled to be received on January 31, 2014 and 2015). During February 2012, the Board of Regents reallocated $3 million in revenue bond proceeds for the Complex. The balance of the Complex ($1.8 million) is funded through the University of Hawaii at Mnoa Office of Facilities and Grounds (OFG) Capital Renewal and Deferred Maintenance (CRDM) account. Also, as the $3 million balance from the TC Foundation has not been received, OFG has been utilizing CRDM funds to provide an advance for incurred costs related to the Complex. OFG summarized the source of funding for the Complex as follows: Amount Funding Sources TC Foundation $ 5,000,000 State of Hawaii GO bonds/legislative appropriations 6,995,000 University revenue bonds 3,000,000 OFG CRDM funds 1.767.071 Subtotal 16,762,071 Less: Contribution to State Foundation on Culture & Arts (42,655) Total Available Funding $16,719,416 3

Clarence T.C. Ching Athletic Complex February 2014 OFG will need to locate additional funding sources for development costs exceeding the $16.7 million noted above. Groundbreaking for the Complex occurred during July 2012 with an anticipated completion date of July 2013. The completion of the Complex is associated with the Athletics Departments Title IX plans to achieve gender equity in athletics. Internal Audit was informed that the womens locker rooms and offices on the first floor of the Complex must be completed by January 28, 2014 in order to avoid NCAA sanctions. OFG believes the balance of the Complex (grandstand, sand volleyball venue, etc.) will be completed by April 30, 2014. Work on the road fronting the entrance to the Complex will be completed during May 2014 to minimize disruptions to students entering and exiting the parking structure.

Service Providers
The following table ($ in 000s) lists the service providers associated with the development of the Complex and related contract information. The estimated cost at completion was provided by OFG personnel. Contract
Service Provider Mitsunaga & Associates, Inc. (M&A) Design Architect Cost Start Date $ 700 June 2010 Completion Date Sept. 2010 for design plans then duration of construction Through 12 mths after project acceptance March 2013 Cost including Contract Modifications $ 1,059 26 40 578 13,933 15,636 1,083 $ 16,719

Air Balance Hawaii, Inc. (ABH) 26 June energy certification 2011 SSFM International, Inc. 40 Dec. environment assessment 2012 Community Planning and 578 July May 2013 Engineering, Inc. (CPE) 2012 construction management T. Iida Contracting, Ltd. general 12,393 July July 2013 contractor (GC or Iida) 2012 Total $13,737 Estimated costs to complete (including unapproved change orders) Estimated Cost at Completion

Monthly development costs incurred by service provider and construction labor hours (general contractor and aggregate for subcontractors) are noted below. Construction labor hours were derived from payroll affidavits provided by CPE. Development costs incurred were derived from the service providers progress billings, as OFG does not track these costs on an incurred basis. Estimated costs to complete and estimated costs at completion is not maintained in OFGs project accounting records as these amounts are not computed and analyzed by OFG to manage project costs. Accordingly, OFG is managing project costs on a cash basis rather than an accrual basis, which Internal Audit believes should be remediated. 4

Clarence T.C. Ching Athletic Complex February 2014

Construction labor hours GC Sub

Development Costs Incurred (000s) Month/Year M&A ABH SSFM CPE Iida Sept/2010 $ 132 $ $ $ $ Nov/2010 131 Dec/2010 40 Feb/2011 294 Jul/2011 151 8 Sep/2011 1 Nov/2011 50 Dec/2011 1 Jan/2012 123 Jun/2012 2 Jul/2012 39 45 289 Aug/2012 18 448 Sep/2012 17 431 Oct/2012 13 335 Nov/2012 14 509 Dec/2012 1 16 439 Jan/2013 19 523 Feb/2013 20 53 1,436 Mar/2013 17 454 Apr/2013 21 576 May/2013 39 263 Jun/2013 57 290 Jul/2013 44 361 Aug/2013 46 576 Sep/2013 23 49 474 Oct/2013 41 773 Nov/2013 53 1,229 Dec/2013 606 $ 13 $ 40 $ 562 $ 10,012 $ 963 Total to date Unbilled and Estimated Costs to Complete (includes unapproved change orders) Total $132 131 40 294 159 1 50 1 123 2 373 466 448 348 523 456 542 1,509 471 597 302 347 405 622 546 814 1,282 606 11,590 5,129 $ 16,719

% of Est. at Comp. 0.8% 1.6% 1.8% 3.6% 3.6% 4.5% 4.5% 4.8% 4.8% 5.6% 5.6% 10.6% 13.3% 15.4% 18.5% 21.2% 24.5% 33.5% 36.3% 39.9% 41.7% 43.8% 46.2% 49.9% 53.2% 58.0% 65.7% 69.3%

65 226 786 837 1,349 1,535 1,427 1,223 1,308 1,664 2,155 2,293 1,811 2,465 4,888 4,611 4,191 2,962 3,410 39,206

257 984 1,142 582 836 957 962 920 612 916 725 709 916 1,477 3,039 3,606 2,245 2,524 23,409

Estimated Costs at Completion

The trend of labor hours indicates an increase in labor hours towards the contract completion date of July 2013 and an additional increase in labor hours towards the initial revised completion date of October 2013. Labor hours towards subsequently revised completion dates of December 2013 and beyond have remained flat but significantly higher than the hours incurred prior to August 2013. CPE informed Internal Audit that the trend of labor hours is consistent with their expectations and does not reflect a lack of commitment of the contractors to complete construction of the Complex. CPE stated that the discovery of the asbestos transite piping material prevented the contractors from performing scheduled work until the asbestos was analyzed, a remediation plan formulated and the piping material removed as the open trenches housing the transite pipes created a safety hazard and working around the trenches would have created construction inefficiencies. CPE also stated that the exclusion of the HVAC work at construction commencement delayed the identification of design drawing conflicts between structural, mechanical and electrical work which also negatively impacted the construction 5

Clarence T.C. Ching Athletic Complex February 2014 schedule. CPE also informed Internal Audit that the increase in labor hours from August 2013 was attributable to the effort to obtain the Temporary Certificate of Occupancy for the womens locker rooms and offices on the first floor by January 28, 2014. Internal Audit was informed that the Temporary Certificate of Occupancy was dated January 8, 2014. OFG management personnel informed Internal Audit that the trend in labor hours also met their expectations and concur with CPEs explanations to Internal Audit. See additional discussion in the Construction Delay section below.

Work performed and related observations

Interviews Internal Audit discussed the construction of the Complex and its related cost and timing with personnel from UHM Athletics (customer), OFG (service facilitator) and CPE (construction manager). Internal Audit also toured the Complex on December 6, 2013 and January 14, 2014 to observe the construction status of the Complex. The following summarizes the significant matters discussed. UHM Athletics: UHM Athletics was not aware of or invited to the weekly Owner-Architect-Contractor (OAC) meetings discussing the construction status of the Complex and was informed during April 2013 that the Complex would not be completed until October 31, 2013. This date was later revised to December 31, 2013 then ultimately January 28, 2014 (first floor only). UHM Athletics believes a design change initiated by OFG requiring redrafting of the architectural/engineering drawings and specifications delayed construction commencement. UHM Athletics informed Internal Audit that they were not consulted with respect to this design change and did not understand the purpose of the change given that they approved the original design. OFG: Design change OFG informed Internal Audit that the design change resulted from comments provided by UHMs Design Advisory Panel and estimated that the change delayed construction commencement by approximately six months as Mitsunaga was required to redesign the Complex and accordingly revise the construction documents. OFG stated that Mitsunaga did not initiate a change order for this service. Membership of the Design Advisory Panel consists of architects and engineers within UHM and external to the University. Internal Audit was informed that the Design Advisory Panel has been inactive for the past two years and there is currently no plans for reactivation as the Design Advisory Panel added an additional and generally unnecessary layer of review. OFG stated that the revised construction documents also required modifications resulting from errors or lack of specificity in the initial construction documents. Documentation provided to Internal Audit indicated that 181 Requests for Information (RFIs) during the construction phase resulted in 31 Post Construction Design (PCDs) revisions to the construction documents. Construction bids exceed available fundingInternal Audit inquired as to the reason the construction documents resulted in construction bids significantly exceeding the total development budget of $10 million. OFG informed Internal Audit that this is a consistent issue at the University whereby construction documents are generally not prepared 6

Clarence T.C. Ching Athletic Complex February 2014 with the objective of ensuring that the resulting proposed construction costs would approximate available funds. OFG informed Internal Audit that they will mitigate this issue by requiring architects to provide additional services effective December 2013 to minimize the risk of construction documents resulting in construction bids significantly exceeding available funds. OFG refers to this additional design service as Architectural Design Programming (ADP). OFG indicated that ADP requires the architect to collaborate and work with the University such that the construction documents will result in construction costs approximating available funds as well as ensuring compliance with federal, state and county laws, codes, ordinances and regulations. OFG stated that ADP will also result in more detailed architectural design plans decreasing the number of RFIs and PCDs. CPE (Construction manager): Services CPE is engaged to manage all construction work through final payment to the general contractor including performing the following: Coordinate and monitor the activities of the general contractor on a daily basis. Review and approve general contractors billings. Review change orders and its associated cost. Organize periodic meetings, prepare weekly status reports and project status schedules. Upon University approval, take corrective action to maintain the project schedule, budget and cash flow requirements. OFG stated that CPE provided the services described in their contract. Internal Audits review of documents prepared by CPE noted that CPE was monitoring and documenting the daily construction work of the Complex and held weekly meetings to discuss project status. Construction delays A CPE December 30, 2013 report noted that construction delays were attributable to the following: Description
Removal of asbestos transite piping material (Iida contract modification #2) Air conditioning and ventilation (HVAC) work added back to the construction contract (Iida contract modification #1) Manufacturing time for revised guardrails and handrails (Iida contract modification #2) Additional time to coordinate work to obtain the Temporary Certificate of Occupancy Weather related Total

#Days
45 122 tbd 60 21 248

The 248 days equates to extending the July 2013 completion date to February 2014. CPE informed Internal Audit that Iida proposed a greater number of delay days and that the above noted delay days (excluding weather related) are reasonable, result from negotiations with Iida and were accepted by OFG. Discussions with OFG confirm CPEs assertion. Internal Audit could not determine if the number of additional days were reasonable when compared with the required work documented in the contract modifications. OFG documented the following reasons for the above noted delays: 7

Clarence T.C. Ching Athletic Complex February 2014 Asbestos: During July 2012, Iida discovers unexpected asbestos transite piping material in the existing underground concrete encased conduits. Demolition and excavation of the building footings was delayed and required resequencing while the results of the lab testing for asbestos and determination of the procedures for the handling of asbestos was performed. This negatively impacted the foundation work and construction schedule, as exposed trenches and material from the excavation needed to stay in place pending laboratory results with respect to the asbestos. HVAC: Iida was notified in November 2012 that they could proceed with the HVAC work. Prior to November 2012, Iida could not contract with their HVAC subcontractor due to the lack of a contract for the HVAC work with the University. Accordingly, Iida could not order the HVAC equipment and could not direct the sub contractor to start work on the HVAC shop drawings. Subsequent design drawing conflicts between structural, mechanical and electrical work were discovered by Iida resulting in PCD changes. OFG believes this delay would have been minimized or eliminated if the HVAC work was included in the original construction contract dated July 2012. Guardrails: In November 2012, City & County of Honolulu Building Department code violation comments required revisions to the design of the bleacher guardrails. Fabrication of the guardrails commenced in December 2013. Approval of the railing design took one year to resolve due to concerns about cost, safety and method of construction. The anticipated installation date of the guardrails is April 2014. Delay days have not yet been determined. CPE concurs with OFGs assessment that the inclusion of the HVAC at construction contract inception would have minimized construction delays. However, the discovery of the asbestos piping material was unforeseen and the related delay days could not be avoided. Review of documents In connection with this review, Internal Audit reviewed contracts, progress billings, change order proposals, contract modifications and other schedules/information prepared and provided by OFG personnel and CPE. Internal Audit also reviewed the following documents prepared by CPE in connection with their construction management services. Minutes of the weekly Owners, Architects/Contractor meetings Daily construction activity logs

Information in these documents is consistent with the construction delay information noted above. Change order proposals and the resulting contract modifications which are associated with the construction delays are presented below. Change orders: Process Construction change orders are typically due to the following: 1) university request, 2) design error/omission, or 3) unforeseen conditions. Contractors prepare a Change Order Proposal (COP) to 8

Clarence T.C. Ching Athletic Complex February 2014 document a change to the construction requirements. The COP includes an estimate of the cost of materials, labor, subcontractor work and equipment. The COP is reviewed by the construction manager and University project manager to determine if the construction revision and related cost is necessary and reasonable. The University project manager prepares an Authorization to Proceed with Change Work (Authorization) form authorizing the contractor to proceed with the construction revision. The Authorization is reviewed and approved by the construction manager and the Director of Facilities Management. Generally, multiple COPs are aggregated and submitted to the Office of Procurement and Real Property Management (OPRPM) for processing into a contract modification. 20% - 30% premium Hawaii Administrative Rules (HAR) Chapter 3-125, Section 13(3) allows a 20% premium on COP material and labor costs to cover construction contractors and sub-contractors overhead and profit. An additional 10% premium on the sub-contractors COP material and labor costs are also added to the general contractors 20% premium. Accordingly, a premium of 20% - 30+% is incurred on the material and labor costs associated with COPs. Example: General Contractor (GC) $1,000 200 $1,200 Subcontractor (SC) $1,000 200 120 $1,320

COP labor and materials charge 20% GC or SC premium 10% GC premium for SC charge Total contract modification

The above example illustrates the additional negative dollar impact change orders have on the Universitys construction budget. With respect to the Complex, Internal Audit was informed that the COP premium was not added to Iidas contract modification #1 (HVAC), as it was previously agreed that this work would be added back to the Iida contract as a change order. Internal Audit reviewed a sample of change order proposals and estimates the labor and materials charge for the Iida contract modification #2 at approximately $454,000. A premium of approximately $91,000 results in the contract modification #2 amount of $545,000 ($454,000 x 120%).

Clarence T.C. Ching Athletic Complex February 2014 Summary of COPs and Contract Modifications Service Provider # M&A 1

Change Order Proposal Dtd Description

$ (000s) $335 # 1

Contract Modification
OPRPM $ Recd Appvd (000s) 4/26/11 6/1/11 $ 335

Iida

Total

10/6/10 Design services for: 1) deletion of grandstand roof, 2) new beach volleyball courts & track improvements, 3) sewer connection, 4) additional design consultants, 5) LEED certification, and 6) environmental abatement for the demolition of the Dance Studio. 1 10/10/13 Environmental consultant design services 24 and reimbursable expenses. 1 8/31/12 HVAC work originally included in the bid 995 price, but excluded from the construction contract due to insufficient funds. 11 10/18/12 Primarily consists of the following: to 5/23/13 1) Removal of asbestos transite electrical 159 conduits. 2) Additional cost due to revised guardrail 347 and handrail due to the C&C Building Dept. code violation comments. 3) Additional cost due to revised elevator 18 circuit breaker at the main electrical switchboard. 4) Other 21 14 $1,899

2 12/13/13 Pending 1 10/17/12 11/2/12 2

8/28/12 9/25/12

24 995 545

$1,899

Contract modifications pursuant to the above table aggregate to $1.9 million. However, the $995,000 for Iida Contract Modification #1 related to HVAC work that was deleted from the original Iida contract for budgetary reasons with the intent to add this work back when additional funding was obtained. The difference between the aggregate contract amounts ($13.7 million) and estimated cost at completion ($16.7 million) is approximately $3 million. The $1.1 million difference between this $3 million and contract modifications of $1.9 million represents submitted change order proposals not yet approved and change order proposals that are anticipated but not yet prepared. The unapproved change order proposals relate to the following: underground utility lines being closer to construction grade level when compared to University historical construction plans thus requiring a modification to sidewalk and grounds fronting the Complex. The discovery of these utility lines occurred during January 2012. A contract modification for this change order has not yet been processed as the cost and design change have not yet been finalized. additional construction management services associated with the extension of the construction period through spring 2014. 10

Clarence T.C. Ching Athletic Complex February 2014 COP observations M&A Contract Modification #1: The deletion of the grandstand roof was the result of cost considerations. The description of the other design changes appears to be for services that should have been contemplated and included in the original design contract. Upon inquiry, OFG informed Internal Audit that Mitsunaga was instructed to exclude design services such that the contract would not exceed $1 million with the understanding that these services would be added at a later date through a change order. Internal Audits review of OCIs website notes that Mitsunagas design services contract received Board of Regents pre-approval in accordance with Board of Regents policy Section 8-1(c). Accordingly, since OFG believed that the cost of the design services would exceed $1 million, Internal Audit does not understand OFGs rationale of preparing this change order for services that were expected and could have been included in the original design contract. Iida Contract Modification #1: As previously noted, this contract modification was anticipated by the University prior to the commencement of construction. Iida Contract Modification #2: OFG informed Internal Audit that the C&C Building Department erred in determining that the design of all guardrails/handrails did not meet building code regulations. According to OFG, a design change is warranted for guardrails/handrails if the elevation change between grandstand levels equal or exceed 30 inches. However, both OFG and M&A did not question the C&C Building Department decision. In addition, OFG and M&A did not detect this issue in the design drawings such that the drawings could have been modified or building code complying guardrails ordered thereby negating the need for this change order.

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Clarence T.C. Ching Athletic Complex February 2014 Site Visit Photos The following photos evidence that substantial construction work was completed between December 6, 2013 and January 14, 2014. As previously discussed, anticipated installation date of the guardrails included in Iida Contract Modification #2 is April 2014. Accordingly, the completion date of all construction work for the Complex may occur in May 2014. December 6, 2013 January 14, 2014

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Clarence T.C. Ching Athletic Complex February 2014

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Clarence T.C. Ching Athletic Complex February 2014

Conclusions/Recommendations
A variety of reasons caused the delay in the completion of the Complex (anticipated completion date of July 2013) as well as the unanticipated cost overruns of approximately $1.7 million ($3 million additional contract costs less the expected $335,000 of design services and $995,000 of HVAC work.). Certain reasons were clearly unforeseen, such as the discovery of asbestos in underground conduits. However, it appears that the cause of other delays could have been controlled and better managed by both OFG and its service providers. Internal Audit believes adoption of the recommendations described below will allow OFG to better manage and reduce the number of delay days and cost overruns associated with the design and construction issues identified with the Complex. Design plans: Improved design plan collaboration between OFG and M&A from an estimated construction cost perspective could have mitigated the resulting construction bids exceeding $13 million when available funding was $10 million. Accordingly, the construction delays (122 days) associated with adding the HVAC work into the construction contract subsequent to construction commencement could have been avoided. More comprehensive design plan reviews by both OFG and M&A may have detected and thus corrected design plan issues (code violations, lack of specificity, conflicts between structural/mechanical/electrical drawings, etc.) discovered during the construction phase by Iida and its sub-contractors. Accordingly, the number of RFIs, PCDs and ultimately change orders (specifically the guardrail change order) may have been minimized or eliminated. OFGs implementation of Architectural Design Programming (ADP) as an additional design service is intended to mitigate the above noted matters related to construction bids exceeding available funds and design plan issues. As previously noted, ADP is expected to result in more frequent and meaningful collaboration with architects resulting in construction bids approximating available funds as well as construction plans/documents complying with federal, state and county laws, codes, ordinances and regulations. Management oversight: Although CPE was engaged as construction manager, the Complex has incurred significant construction delays and cost overruns. Internal Audit was unable to determine what steps, if any, were taken to get the construction of the Complex back on track from both a timing and cost perspective. Accordingly, as owner of the project, OFG should consider being more active and aggressive when managing and monitoring the construction schedule and construction costs including their oversight of construction managers. Consideration should also be given to obtain funding that will allow OFG to employ personnel to perform the duties of a construction manager thereby increasing OFGs control and management of this function in addition to reducing overall project costs. From a cost control and project accounting perspective, OFG was not monitoring costs incurred to date and estimated costs at completion for the Complex and by service provider. Accordingly, Internal Audit believes that OFG should enhance their project accounting procedures such that estimated costs to complete and estimated costs at completion are included in OFGs project accounting records by service provider. These costs and project accounting records should be reviewed and analyzed periodically (at 15

Clarence T.C. Ching Athletic Complex February 2014 least monthly) to determine if the estimated costs at completion will exceed contract costs as well as expected costs (budgeted costs) thereby providing timely information to OFG in order to better manage and control cost overruns. Additional training and personnel may be needed to accomplish this objective.

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Clarence T.C. Ching Athletic Complex February 2014

Individuals Interviewed
Kurtis Bell Teri Chang Carl Clapp Ben Jay Thomas (Tom) Katsuyoshi Shawn Kodani Stephen (Steve) Meder Paul Tateishi Kirk Yuen Construction Inspector, Community Planning and Engineering, Inc. Assistant Athletics Director Facilities, Intercollegiate Athletics University of Hawaii at Mnoa Associate Athletics Director and Administrative Services, Intercollegiate Athletics University of Hawaii at Mnoa Director of Athletics, Intercollegiate Athletics University of Hawaii at Mnoa Director, Facilities Management Office University of Hawaii at Mnoa Architect, Facilities Management Office University of Hawaii at Mnoa Interim Assistant Vice Chancellor for Physical, Environmental, & Long Range Planning University of Hawaii at Mnoa Resident Construction Engineer, Community Planning and Engineering, Inc. Architect, Facilities Management Office University of Hawaii at Mnoa

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