Audit Readiness and Internal Controls for MEP Companies in UAE

Four steps to readiness

Job costing across trades

MEP work combines mechanical, electrical and plumbing scopes, often under one contract but delivered by separate crews. Set up a cost code for each trade within each project. You can then see whether the electrical package is profitable even when the mechanical package is not. Materials issued from the store should be recorded against the job on a material requisition, signed by the site engineer.

Supervisors' time, vehicles and tools shared across sites need a simple allocation rule, such as labour hours or site days, applied the same way every month.

Material submittals, deliveries and store control

Equipment such as chillers, panels, cables and pipework is usually approved by the consultant before purchase. File the approved submittal next to the purchase order and the supplier invoice so the three agree on specification and price. Deliveries to site should be checked against the delivery note, with damaged or short items reported on the day.

Keep a stock register for the main store and each site store. Count them periodically. Leftover materials at the end of a project are either returned, transferred to another job or written off, and each outcome needs a record.

Testing, commissioning and warranty obligations

Revenue on a project is not secure until testing and commissioning have been accepted. Hold the commissioning reports, test certificates and the client's acceptance on file. Defects liability periods leave a continuing obligation after handover. Keep a note of the end date and consider an estimate of repair cost for work already completed.

Retention held by the main contractor should be tracked per project with its release conditions. Payments to your own suppliers should be matched against what the client has actually certified, to avoid funding the project from your own cash.

Manpower and site compliance records

Many MEP firms employ technicians on site and through labour supply. Keep contracts, visas, wage records submitted through the Wages Protection System and end-of-service calculations. Gratuity is worked out at 21 days per year for the first five years and 30 days after that. This applies to employees with at least one year of service. Overtime and site allowances should be supported by signed timesheets.

Accommodation, transport and site allowances should be allocated to the project that used the workers, supported by a monthly headcount per site. This keeps labour cost on each job complete and not understated.

What to put in the file

• Project register with contract and variation values
• Retention schedule by main contractor
• Materials stock movements and store records
• Subcontractor agreements and payment certificates
• Back-charge and claim correspondence
• Equipment and vehicle register

Risks to watch in MEP company books

Where our service stops