Project Control - Cost Control Section Manual

COST CONTROL SECTION
MANUAL
Doc. Code CCSM
Rev. No. 0.3
Issue Date January 2023
Reviewed by Cost Control Section Head
Name Eng Mamon Abuhantash
Signature
Date
Approvals
Designation Executive GM Office General Manager
Name Hussain Tawfiq / Atef Elsobky Mohamed Asiry
Signature
Date
Mursalat, Riyadh
King Abdul-Aziz Branch Road
P.O. Box: 242146T R i y a d h , K i n g d o m o f S a u d i A r a b i a
CCSM
Rev. 1.0
COST CONTROL SECTION MANUAL Jan. 2023
Page 1 of 51
TABLE OF CONTENTS
COST CONTROL SECTION MANUAL....................................................................................

Mission .................................................................................................................................2
Vision ...................................................................................................................................2
Goals ....................................................................................................................................2
Organization Chart ..............................................................................................................3
Job Descriptions ..................................................................................................................4
Work Procedures ..............................................................................................................10
1.0 Cost Control Management Plan ..................................................................................11
1.1 Objectives .................................................................................................................11
1.2 Communication Chart ..............................................................................................11
1.3 Definitions ................................................................................................................12
1.4 Cost Coding .............................................................................................................13
1.5 Material Request & Payments Certificate Policy ....................................................15
1.6 Subcontractor Payment Certificate Policy ..............................................................18
1.7 Debit Note Policy ......................................................................................................21
1.8 Petty Cash Policy .....................................................................................................24
1.9 Reports Templates ....................................................................................................28
2.0 Execution Budget Preparation Process .......................................................................34
3.0 Project Expenditures Processes ..................................................................................35
3.1 Labor Cost ...............................................................................................................35
3.2 Supply Cost – Direct Supply and Regular Procurement Channel ...........................38
3.3 Supply Cost – Inter-Sites supplies ............................................................................39
3.4 Subcontracted Works – 3rd Party (Work Orders) ...................................................41
3.5 Equipment Cost – Company’s Owned Equipment ...................................................42
3.6 Equipment Cost – Third Party Equipment ...............................................................43
3.7 Inter Site Services (PIS) ............................................................................................44
4.0 Productivity Report Process .......................................................................................46
5.0 Cost Reports Process ..................................................................................................48
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Mission:
 Organize, plan and control projects with respect to contractual obligation and enterprise
environmental factors.
Vision:
 Achieve effective project control supporting the strategic goals of the company.
Goals:
 Establish a data base of actual production rates

 Establish a date base of actual risks and the effective responses taken
 Monitor the performance of each department and provide KPIs
 Achieve a proactive level in managing projects
 Complete the project within constraints
 Achieve projects objectives
 Establish effective communication system
 Provide a baseline agreed by all the parties inside and outside the company
 Establish actual rate data base
 Establish as-built schedule at the end of the project with a high accuracy
 Involve all project team in all process and reach a consensus.
 Involve all parties in risk management different process
 Do of all processes of managing risk
 Collect all actual cost accurately
 Establish cost coding system.
 Optimize usage of resources
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Organization Chart
Cost Control Section

Head
Cost Control Engineer
Cost Controller
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Job Title Cost Control Section Head Reports To General Manager
Department Cost Control Section Subordinates Cost Control Engineer
Job Summary:
 Control and manage the project costs and support the project team in all commercial matters of the
project. OR Development and execution of the project cost plan and monitor costs and collects
cost data to ensure conformity with top management's budget directives, cost tracking, forecasting;
and financial reporting.
Tasks:
 Follow up the Project Budget

 Obtain the budget costs of system, assemblies, equipment, materials, and labor.
 Preparation of a Budgeting and Cost Management Plan including updates
 Establishing the cost centers and cost codes for the Project
 Preparation of a Budget Estimate and updates thereof for approval by the Client of construction
costs.
 Monitoring projected expenditure against allowances made in the approved Budget Estimate.
 Preparation and submission of Project cash flow forecasts and monthly updates thereof at the
completion of each design and tender documentation stage covering consultancy agreements and
construction contracts.
 Provide cost advice during the final development of the design, including cost comparisons
reviews of alternative design or construction solutions.
 Follow up of all contractual issues and monitor their cost impact.
Qualifications:
 Essentially with bachelor’s degree in Engineering.

 Certification in Construction Management/Project Management will be preferred.
Experience:
 Ideally with a minimum of 8 years of experience in Cost Control.

 With 5 years solid experience performing managerial role at corporate/functional level
overseeing functionally Project Cost Control implementation across all projects.
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Skills and Knowledge:
 Good general understanding of Cost Management, Estimating and Change Control.

 Excellent communication &interpersonal skills.
 Excellent in written and verbal English.
 Mathematical acumen & financial expertise.
 Computer skills: MS applications and Primavera 6.
Competencies:
 Concern for Others

 Impact & Influence
 Organizing Skills
 Decision Making Skills
 Leadership Skills
 Customer Focus.
 Commitment.
 Adaptability
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Job Title Cost Control Engineer Reports To Cost Control Manager
Department Cost Control Section Subordinates Cost Controller
Job Summary:
 Ensure the smooth running of Cost Controls Section, its full compliance with Company’s
policies, procedures and internal controls.
Tasks:
 Works under the leadership of Cost Control Manager. Interact with Project Team and with other
departments to ensure and improve reliability and accuracy of Cost Control deliverables.
 Supervise and oversee the issuance of reports from Cost Controller.
 Review and validate these reports before rolling them up and circulating them to Project
Management Team as well as to Project Control Manager and/or to other Senior Managers in
Head Office.
 Categorize the collected cost into an organized Cost Breakdown structure.
 Analysis and provide change actions ( corrective / preventive)
 Constantly inform and advise Senior Project Controls Managers and Construction Division
Manager about Cost Performances of the concerned areas. Analyze and participate in decision
making processes to improve cost effectiveness.
Qualifications:
 Graduate of engineering
 Project Management certification is a plus.
Experience:
 Ideally with minimum 5 years of experience in related field plus site construction experience.
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 Demonstrated ability to plan, organize, direct, perform, review, and present cost engineering
and cost estimating products.
 Skilled in oral and written communication.
 Proficient in MS Office applications.
 Ability to deal with multi-cultural and multi lingual workforce.
 Knowledge of construction methods/quality of material.
Competencies:

 Customer Focus.
 Commitment.
 Adaptability
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Job Title Cost Controller Reports To Cost Control Engineer
Department Cost Control Section Subordinates n/a
Job Summary:
 Responsible for collecting, organizing, analysis, provide corrective/ preventive actions and
reporting, through the following tasks:
Tasks:
 Expenses monitoring (collection and follow-up) of “all Trades” Construction Projects on a real time
basis.
 Elaborating comprehensive cost control reports including direct and indirect costs, productivity
ratios, and incurred project expenses.
 Monthly financial comparison of the incurred expenses against the consumed budget on an item
by item basis and according to the physical progress of each budgeted task.
 Estimate the remaining expenditures needed to complete the project and calculation of the project’s
final costs. (Cost at Completion = incurred expenses + remaining cost to complete the Project)
 Pinpoint, analyze and explain the financial variances to the budget.
 Help elaborating strategic proposals to lower costs / remedy financial drifts in order to prevent
further losses
Qualifications:
 Bachelor in Business Accounting, Administration or Engineering.

 Project Management certification is a plus.
Experience:
 Ideally with minimum 5 years of experience in related field plus site construction experience.
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 Demonstrated ability to plan, organize, direct, perform, review, and present cost engineering
and cost estimating products.
 Skilled in oral and written communication.
 Proficient in MS Office applications.
 Ability to deal with multi-cultural and multi lingual workforce.
 Knowledge of construction methods/quality of material.
Competencies:

 Customer Focus.
 Commitment.
 Adaptability
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Work Procedures:
Purpose:
The purpose of this procedure is to define the detailed processes of Cost Control general
activities applicable in all projects of Built Contracting Company.
Procedure:
This procedure explains in detail the following Cost Control processes:
1. Cost Control Management Plan
1.1 Objectives
1.2 Communication Chart
1.3 Definitions
1.4 Cost Coding
1.5 Material Request & Payments Certificate Policy
1.6 Subcontractor Payment Certificate
1.7 Debit Note
1.8 Petty Cash Policy
1.9 Reports Templates
2. Execution Budget Preparation Process

3. Project Expenditures Processes
3.1 Labor Cost

3.2 Supply Cost – Direct Supply and Regular Procurement Channel
3.3 Supply Cost – Inter-Sites supplies
3.4 Subcontracted Works – 3rd Party (Work Orders)
3.5 Equipment Cost – Company’s Owned Equipment
3.6 Equipment Cost – Third Party Equipment
3.7 Inter Site Services (PIS)
4. Productivity Report Process

5. Cost Reports Process
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1. Cost Control Management Plan
1.1 Objectives
Objectives of Establishing Project Cost System:
1. Ensure actual costs allocation to the proper cost center.

2. Enhance cost reporting accuracy & efficiency.
3. Keep the construction costs of the project within the established budget.
4. Develop labor and equipment productivity information for estimating the cost of future Work.
5. Ensure the smooth running of Cost Controls Section, its full compliance with Company’s
policies, procedures, and internal controls
1.2 Communication Chart
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1.3 Definitions:
1.3.1. Cost Control
Project cost control begins with the preparation of the cost center and distribute the budget on each
CBS and monitoring the budget of the project during the project period.
In addition, cost control will make check on the prepared budget by Estimation Department the
information that is generated for estimating purposes can be in terms of productivity rates, unit
costs, or both. Small contractors frequently work in terms of unit costs while large contractors base
their estimating on productivity rates.
1.3.2. Cost Breakdown Structure
Cost Breakdown Structure (CBS) requires the project to be divided and subdivided into smaller
parts called “Work Packages”.
1.3.3. Cost to Date (CTD)
A measure of the actual cost of the work performed as of a data date.

1.3.4. Cost to Complete (CTC):
The estimated cost is needed to complete the remaining work.
1.3.5. Cost at Completion (CAC):
An estimate of the total cost of an activity or group of activities will accumulate upon completion
and is equal to cost to date plus the cost to complete.
1.3.6. Variance at Completion (VAC):
The budget at completion less the Cost at Completion
1.3.7. Earned Value (EV):
Measure of the value of work performed so far.

1.3.8. Direct Costs:
A direct cost is a cost that can be clearly associated with specific activities or products.
1.3.9. Indirect Works:
Indirect costs are costs that are not directly associated with a single activity, event, or other cost
object.
Note: Manpower on site is considered indirect starting from level of foreman and up.
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1.3.10. General:
- The smallest unit of the CBS is the work package, which is called a contract package if the work
is contracted out.
- It is necessary that the scope of the work for each work package be described in relation to the
work to be done in the other work packages (BOQ or Contract with the Client).
- Work packages are defined in terms of design, construction methods, and completion
requirements, with associated performance dates.
Project structure must divide the Project into small elements that are:
1. Manageable: Specific authority and responsibility could be assigned for each element.
2. Independent: With minimum interfacing or dependence on other elements.
3. Measurable: In terms of progress.
1.4 Cost Coding

The proposed Cost Coding consists of four parts:
1. Project Code
2. Task
3. Expenditure Type
1.4.1. Project Code:
This is a unique code among the organization, provided by the project control Team according to
Project requirements. (e.g., 1001)
1.4.2. Task Code:
0 00 00 00
Expense Indirect Package Activity
Type / Zone # (Optional)
1.4.3. Expenditure Type:
This part of the code helps in clarifying the type of the Cost (Direct/Indirect) and categorize the
job into Material, Manpower, Equipment or Subcontractor.
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Example:
Code Expenditure Type

6103100 Concrete - Subcontractor
6103300 Concrete - Rental Manpower
6103400 Concrete - Tools & Equipment
6103500 Concrete - Material
6103600 Concrete - Other Services
61 03 100
Expense Key Division Type of Expense
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1.5 Material Request & Payments Certificate Polic
1.5.1. Definition:
Materials include all consumables, non-consumables, or Assets, supplied to company projects

which can be used for the project work or Site offices.
1.5.2. Policy & Procedure:
a) Material requests shall be filled out by an Engineer in the requesting department &
approved by the head of the requesting department.
b) The Requestor shall give full details regarding the requested material. (Quantity, size,
drawings.etc.) to avoid wrong delivery
c) Requestor Shall specify the required delivery date according to the site needs.
d) The requestor should plan for the needed materials/service to avoid urgent requests &
cash payments.
e) The construction manager and project manager shall approve the MR before
delivery or PO Process.
f) The store should check if the requested material is available in stock, in case of
availability the requesting department shall be informed & MR should be closed.
g) If the requested material is not available, MR to be forwarded to the procurement
department to proceed with the PO (according to the procurement Procedure).
h) A copy of the PO should be sent to the supplier for delivery in the desired date
i) The Supplier delivers materials to Site Store.
j) Delivered materials shall be checked against PO for completion and damages and
signed as received by the store manager.
k) Supplier shall issue Invoice for the actual delivered material only.
l) The Invoice shall be handed over in the site office to the Payment Processor.
m) Invoices will be registered with Invoice number, name supplier, date issued, date received
& amount etcetera.
n) Payment Processor collects original delivery notes from store, original MR
and original PO from procurement department.
o) Payment Processor prepares the payment certificate and forwards the package to
the Site Cost Controller & Site Account for Further verification & processing then he
changes the status of the invoice into Received.
p) Once the Payment Certificate is approved the Payment Processor changes the status of
the invoice into Confirmed.
q) The Original Payment Certificate with all supporting documents should have been
forwarded to Head Office for Further processing & Payments.
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1.5.3. Template:
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1.5.4. Materials Request & Payment Certificate Flow Chart
Requestor/ Storekeeper Construction Procurement Cost Control Higher Supplier

Sub-contractor Manager & Department Department Management
Project Manager
Start Budget
Amendment
Process
No
1-Approval of P.D
Material 2-R.F.Q From
Prepare Material No Supplier or
Can be MR Subcontractor Within
Requisition (MR)
Provided Approved create Budget?
signed by comparison sheet
requestor’s Dept. by store?
Manager.
Yes
Create PR
Create (By ERP System)
(Create Vendors by Finance
PO & Create Items by Store)
Yes
Material Received
Send copy for

Inform The supplier to
Approved start delivery
Requester
P.O process
by Email
End
Supplier
Submit
Invoice
Check &
Receive
Material
N
o
Collect PO,
Receipt Invoice, Check &
Yes
Approve, End
Note/Delivery Delivery Notes
Ok?
& Create P.C Send it to
Note Finance Dep.
For Recording
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1.6 Subcontractor Payment Certificate Policy:
1.6.1. Definition:
Subcontractors include all entities executing work for or on behalf of BUILT CONTRACTING
COMPANY.
1.6.2. Policy & Procedure:
a) The Work Order is assumed to be signed by the authorized personnel as per procurement Policy.
b) Quantity Surveyor receives the Invoice from the Subcontractor and attached the “Subcontractor's
Invoice Approval” form and leads the approval process.
c) Quantity Surveyor forwards the Invoice to the Construction Manager &Project Manager for
Approval.
d) Construction Manager & Project Manager confirms that the claimed work was actually done at site
and gives his comments if any.
e) Then Construction Manager & Project Manager forwards the Package to the Quality Dep.
f) Quality Dep. confirms that the claimed works is approved by consultant & having no NCR & and
give his comments if any.
g) Quality Dep. Returns the Package to the Quantity Surveyor.
h) Quantity Surveyor Checks the quantity of claimed works as per drawing with accordance of the
construction & technical mangers comments.
i) The quantity surveyor communicates with the subcontractor to correct any comments.
j) After verification, the quantity surveyor forwards the package to the payment processor.
k) The payment processor issues the payment certificate and attaches any missing documents then he
forwards the package to the Cost Controller.
l) Cost Controller review against Budget & subcontractor agreement and review the project team
comments for any clarification or modification.
m) The Package is forwarded to the Site Accountant for financial Check.
n) The Original Payment Certificate with all supporting documents should be forwarded to Head Office
for Further processing & Payments.
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1.6.3. Template
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1.6.4. Subcontractors Payment Certificate Flow Chart:
Quantity Construction Quality Project Cost Accountant

Surveyor Manager & Department Manager Controller
Project Manager
Start
Collect
Invoices
& Lead
Process
Confirm The
claimed
Works done
at site
Confirm
Works Is
Approved by
Consultant &
no NCR
Check
Quantity of
Claimed
Works as
per
drawings
Confirm
The claimed
Works done
at site Review
against
Budget &
Subcontract
Check &
Record
End
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1.7 Debit Note Policy:

1.7.1 Purpose:
The purpose of this Procedure is to enlist the responsibilities and the steps required for identifying and
collecting costs, where BUILT CONTRACTING has performed Subcontractors’ scope of work using
BUILT CONTRACTING resources. BUILT CONTRACTING supports its Subcontractors whenever
practical and critical for successful execution of project; however, any costs incurred for such
assistance provided to Subcontractors are fairly recovered from the Subcontractors, as per the
Subcontract Agreemen.
1.7.2 Scope:
All awarded Subcontracts of BUILT CONTRACTING COMPANY. on all projects come under the scope
of this procedure. This procedure defines the responsibilities and timely actions required for
identification of items to be back charged, their recording, timely notification of Subcontractors, agreeing
amount of back charges with Subcontractors and debiting of thus agreed back charge amounts from
Subcontractor’s accounts. This procedure is limited to recovering Costs incurred on the work done by
BUILT CONTRACTING on behalf of its Subcontractor, which is either requested explicitly by the
Subcontractor, is done by BUILT CONTRACTING if determined critical for successful delivery of the
project. This procedure does not cover recovering the costs due to the time impact of work done by
BUILT CONTRACTING on behalf of the Subcontractor which is covered by a separate procedure
1.7.3 Definitions:
A Debit Note (also known as debit memo): is a commercial document that can be issued by a BUILT
CONTRACTING COMPANY to a Sub-contractor to indicate or request a return of funds plus
Administration fees. due to Purchasing goods, rent of equipment or manpower or any other services on
behalf of subcontractor
1.7.4 Key Roles and Responsibilities:
Job Title Responsibilities

 Requests assistance for any work, materials/ equipment or resources that are
Subcontractor under the Subcontract scope as needed.
 Provides all necessary details on the Material Requisition (MR) and submit the
signed request to BUILT CONTRACTING site Management for Approval.
BUILT CONTRACTING Site  Reviews the request sent by the Subcontractor and approves it.
Management  Sends the original copy of the request to the Procurement department.
Procurement department.  Search for a vendor and make comparison sheet for all prices submitted by
vendors
 Create PO
 Add MR of subcontractor to Log
Control Department  Check the debit note then send it to Accountant
 Update Sub-contractor Back charge Tracker
 Receive material from vendor
Store  Issue material to Sub-contractor officially (by taking the signature of sub-
contractor representative.
 Issue debit note, sign it by sub-contractor & Send to Cost Control
Accountant  Check Debit Note
 record Debit Note in system and inform cost control upon registration
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1.7.5 Workflow:
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1.7.6 Debit Note Template:
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1.8 Petty Cash Policy:
1.8.1. Purpose:
The goal of this document is to provide the governance framework for a standard and consistent
process for closing petty cash of petty cash holders and record it in the BUILT CONTRACTING
COMPANY system.
1.8.2. Scope:
Petty cash funds provide a convenient way to pay for small expenses but keep risk of misuse or theft.
This policy provides procedures designed to mitigate these risks.
1.8.3. Definitions:
Petty cash: A petty cash fund is cash loaned for the purpose of making small purchases where it is not
reasonable to make a disbursement by check and purchases are impractical or unavailable through
Procurement and Disbursements
Petty Cash Holder: The individual to whom the petty cash fund is issued.
1.8.4. Key Roles and Responsibilities:
Job Title Responsibilities

Petty cash Holder  Closing petty cash by filling petty cash Form
 Attach all purchased original invoices to petty cash summary
 Submit petty cash to cost controller
Control Department  Reviews and check petty cash to be matching with petty cash policy
 Add allocation for each invoice
 Send the documents to accountant department
Accountant  Reviews and check petty cash
 record petty cash in system and inform cost control upon registration
1.8.5. Policy:
1) Items purchased from petty cash must not exceed 1,000 SAR for any single invoice (unless have an approval from the PMO
director).
2) The value of single or individual items purchased from petty cash must not be split into smaller values to
circumvent the 1,000 SAR limit.
3) It is not allowed to purchase any type of fixed Assets (Furniture, Computers, Printers … etc.) by Petty cash.
4) Petty cash purchases should not be used to pay employment allowances (salaries, bonuses, medications, or
overtime).
5) Petty cash must be supported with invoices signed by the Project Manager.
6) At any time, the cash in hand plus the total of Invoices must always equal the total amount of petty cash.
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7) All The Invoices from Petty Cash Should Be Signed on Same Date of Purchasing the Material from authorized
person (Mentioned in article#5)
8) The petty cash holder should specify the purpose of the purchased item on each invoice.
9) Only original invoices are accepted (copies or plain paper will be rejected), invoices should be clean from any
type of editing.
10) Unofficial invoices from supplier (i.e., Invoice without Detailed of Supplier or carbon invoices) will not be accepted
at all
11) The material should be received by site or storekeeper (need Storekeeper Signature)
12) It is not allowed to sign the invoice using a black pen, it shall be a blue pen with the name of the person signatory
& date.
13) Petty cash should not be used to pay for suppliers who received approved PO.
14) Mobile phone Invoices will not be accepted at all, including prepaid cards.
15) Invoices including material not related to our work or items for personal use will be rejected.
16) Petty cash should be closed every month, in 25thof each month, any invoices submitted after the previous period
will be rejected.
17) Petty cash cover sheet formatted template should be attached with mentioning the followings:
A. Invoice Date
B. Invoice Number
C. Invoice Source / Supplier
D. Description
E. Amount
18) Any PMV (Plant, Machinery& Vehicle) rental Invoices will be rejected.
19) Fuel Invoices should be supported by a fuel report form for each car/user.
20) Invoices with VAT should be in separate petty cash report from Invoices without VAT.
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1.8.6. Process of Petty Cash:
Purchaser - Site Project Manager Cost Controller Accounting
Start
Start purchasing the

material as per the
Petty cash policy
Prepare Petty Cash Approve Petty Cash

Report Report
Invoices are
Matching
with Petty
Cash Policy?
Approve Petty Cash

Report and assign
allocation Code
Record the Petty cash

and deduct the amount
from Petty Cash
holder account
End
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1.8.7. Template:
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1.9 Reports Templates
The Cost Control office may offer several reports including but not limited to:
3.7.1 Cost Report
3.7.2 Cash Flow Report
3.7.3 Budget Amendment
3.7.4 Manpower Schedule
3.7.5 Equipment Schedule
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1.9.1 Cost Report.
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1.9.2 Cash Flow Report.
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1.9.3 Budget Amendment.
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1.9.4 Manpower Schedule.
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1.9.5 Equipment Schedule.
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2. Execution Budget Preparation
Process Narrative:
This is considered to be the first process in which Cost Control is involved with after a project is
awarded.
1. Project is awarded.
2. Retrieve relevant information in Budget Department Database.
3. Proposal of Project budget is prepared by the Budget Department based on the project
type & planning. Budget proposal are typically: Indirect labor forecast, temporary
facilities cost, equipment forecast, supplies / services unit prices and, in a general
manner, all documents relevant to project budget.
On the other hand Project Control Manager sends a request to the Site Project Manager to
start the Planning stage and Mobilization. (This step is not part of Cost Control Process but to
illustrates the step-by-step process on Budgeting Process).
4. After proposal of Project Budget is done by Budget Department, it is distributed to Head
Office Cost Control Department, and Top Management.
a. Budget Department makes analysis, comparison and verification
b. Head Office Cost Control for reviews and comments.
c. Top Management for approval.
5. Upon Top Management approval of Budget proposal, it is forwarded to Budget
Department and starts detailed Budget Initiation, which is the first baseline of the
project.
6. Once Budget Department finalized the “detailed budget” (Direct Cost, In-House and
Subcontracted, Indirect Costs, Other Expenses), it is forwarded to Site Project
Management & Division for implementation.
7. Site Project Management / Site Cost Control analyze the Final Proposal and sent
their final comments for record to Head Office Cost Control / Project Manager /
Budget Department.
8. Site Cost Control distributes the Execution Budget by Trades and by resources. At this
point, the “distributed budget” becomes the guidelines / reference for any Cost
Allocation of Expenses on the Project.
Note:
The Project Management / Cost Control works in parallel with the Service Marche
Department regarding the content of the Execution Budget of the awarded Project.
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3. Project Expenditures Processes
3.1 Labor Cost

Process Narrative:
Labors: Allocated to sites according to sites needs and requirements to perform required
task for projects. Labor Job Coding combinations opened in accordance with Budget
distributed by lots / resources on an item-by-item basis.
Labor Database:
1. MDR are prepared by Timekeeper, controlled and approved by Site Supervisors then by
Project Manager.
2. Site Cost Controller checks Cost Centers (SITE/WP/JC) and make sure hours are
properly booked according to budget item.
In case of mistake he verifies with Site Supervisor / Timekeeper and occasionally by site
inspection.
Site Cost Control approves and forwards the MDR to PM / Site’s Administration.
3. PM / Site’s Administration receives and approves the MDR. Original copy of MDR is
forwarded to Payroll Section.
4. Site Cost Control logs MDR (Manpower Category / Site / WP / JC / Hours / Remarks) to
the database to record man-hours as per allocation. At this point, records are provisional
and use as such.
5. Payroll Section receives and records the MDR details in their database.
6. If the Cost Centers of the MDR does not exist in Payroll database, the MDR cannot be
processed unless Head Office Cost Control creates the non-existing Cost Center.
7. Payroll Section will forward the concerned MDR to Head Office Cost Control for
verification and creation of Cost Centers.
8. From time to time, Payroll Section is sending Edit List (being the actual MDR details
recorded in their system) to Site Cost Control for verification.
9. In case of corrections, copy of the MDR together with the Edit List is sent to Payroll
Section to update their records.
10. On a monthly basis, Payroll section generates the Final Monthly Recapitulation of hours
(FMR) and forwards to Head Office Cost Control.
11. Head Office Cost Control distributes FMR to Project Sites accordingly.
12. Site Cost Control compares the FMR with the Labor database, if there are variances,
verifies with Payroll Section or with Head Office Cost Control.
13. Justification coming from Head Office Cost Control will be the report of MDR details
“Check List”
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14. Site Cost Control receives and verifies the Check List. In case of variances, appropriate
actions are taken and Labor database is updated.
Expenses Database: (as per ERP application)

15. On a monthly basis, Site Cost control translates the man-hours recorded into provisional
cost by budget item using average rate per hour of each labor category.
Note: Aside from the compulsory monthly basis, at any time / upon request, man- hours
recorded can be translated into provisional cost.
16. Update Expense database by recording the Provisional costs.
17. Entries in Payroll are translated to Journal Vouchers (JV) to summarize the final labor
cost by
18. budget item. Payroll distributes copies of JV to Finance Department and Head Office
Cost Control for verification.
19. After verification, Finance Department and Head Office Cost Control informs Payroll for
Invalid Cost Centers for updating their database (if any).
20. Finance Department records JV transactions with all corrections taken into
consideration.
21. Head Office Cost Control then distributes the JV to corresponding Project Sites.
22. Site Cost Control then take the following steps upon receiving the JVs:
A. Comparison of JV with the corresponding period of labor provisional costs.
B. Deletes unnecessary labor provisions.
C. Records the JV’s actual figures and allocations by budget item in the
database.
If JV contain suspected errors like combinations not existing in the budget item of the
Project Site, Site Cost Control ask for justification either from Payroll or Head Office
Cost Control.
23. Justification coming from Head Office Cost Control will be the report of MDR details
“Check List”. Site Cost Control received and verified the Check List. In case of
variances, corrective actions are taken and Expense database is updated.
24. After each closing month in Accounting Department, Head Office Cost Control is printing
the Monthly Journal Transactions and Summary report from “Current Year Budget
Report” and “Cost & Budget Report” modules (Oracle) respectively.
25. These reports are forwarded to each Site Cost Control for review and verification. JV’s
records in Expenses database are then reconciled with that of Accounting.
26. In case of variances, justification is requested and corrective actions are taken (if any).
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Note:
In Payroll Section system, Head Office Cost Control has an existing access to perform:
1. Opening / Creating WP, JC, and Cost Centers (SITE/WP/JC)
2. Report Generation of MDR Details “Check List”
Head Office Cost Control has an existing access on certain Accounting Reporting
Modules as mentioned in STEP 21.
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3.2 Supply Cost - Direct Supply & Regular Procurement
Process Narrative:
1. MR are prepared by requestor and approved on the Project Site level and Division level
(Refer to Procurement / Purchasing Process)
2. Site Cost Control roughly verifies quantities and destination of the received MR. In case
of clarifications on the destination of an item, Site Cost Control verifies with the
Requestor. If Cost Control found the MR to be questionable (excessive quantities value
over budget). Cost Control inform the Site Project Manager, who will decide to go
through with the order as is or modify / cancel the MR.
3. Site Cost Control allocates each item based on the Budget Item breakdown.
4. Estimated values are provided by:
 Site Storekeeper based on previous deliveries
 Procurement Division based on a Price History Database. Pending MR List is
retrieved from Procurement Division and sent to Project Sites through Head Office
Cost Control on a monthly basis.
5. Site Cost Control records the MR with the estimated value of the materials.
6. Once the materials are delivered on Site, Storekeeper forward a copy of the Purchase
Order and Delivery Note to Site Cost Control and the original Purchase Order with all
supporting documents are sent to Purchasing Department for further processing.
7. Site Cost Control updates MR record details in the Expense database based on the
amount and allocation reflected in the Purchase Order copy.
8. Purchasing forwards PO with supporting documents to Finance Department for GL
transaction.
9. Purchasing forwards PO only to Site Cost Control for recording / updating the Expense
database.
10. After each closing month in Accounting Department, HOB Cost Control is processing
11. These reports are forwarded to each Site Cost Control for review and verification. The
PO records in Expenses DB are then reconciled with that of Accounting.
Note: Site Cost Control is responsible to reflect the cost of all material received and delivered
to the project (used or installed).
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3.3 Supply Cost - Inter Site Supplies
Process Narrative:
1. A Project Site (Requestor) requests materials from another Project Site (Origin / Issuer)
by Email, memo or phone call, etc.
2. After PM approval of the request, issuing Project Site Storekeeper issues the material
through Material Issue Voucher (MIV).
3. Issuing Project Site Storekeeper forwards the MIV to Site Cost Control (Origin).
4. Site Cost Control (Origin) indicates in the MIV which items are to be charge or not, In
the case of supplies to be used by subcontractor, advice of the Service Marche on-site
is required.
5. After PM approves the MIV, Project Site Storekeeper (Origin) inform the Requesting
Project Site that the requested materials are ready for dispatch.
6. Requesting Project Site receives the materials.
7. Site Cost Control (Origin) issues a PIS with MIV as one of the supporting documents to
the requesting project, Allocations of the PIS are based on requested materials budget
item.
8. The PM approves the PIS then Site Cost Control (Origin) forwards the PIS to Site Cost
Control (Requestor).
9. If Site Cost Control (Requestor) disapproves the PIS, he returns it Cost Control Origin
Site to rectify contents (Unit prices, quantities, discounts, etc…)
10. If Site Cost Control (Requestor) approves the PIS, he allocates the materials based on
their requesting Site budget item breakdown.
11. The PM (Requestor) may disapproves the PIS due to the following:
 The PIS shall be returned to the Origin Site to rectify the contents (Unit Prices,
quantities, discounts, etc…)
 Totally reject the PIS due to valid arguments like Consultant rejecting the materials
due to improper manufacturing, wrong Specifications, etc… As a result, materials will
be returned and Issuing Site will shoulder the costs of supplies.
12. If the PM of the receiving Site approves the PIS, the PIS is then submitted to Head
Office Cost Control for verification and approval.
13. Head Office Cost Control verifies the PIS.
14. If HOB Cost Control disapproves the PIS, one of the following actions is taken:
 Modifies the content of the PIS and then forward the modified PIS to Finance
Department. Copy of modified document is also sent to concerned Projects.
 Return the PIS to the concerned projects for further clarifications.
15. All PIS approved by Head Office Cost Control is forwarded to Finance Department for
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recording in General Ledger (GL).

16. After each closing month in Accounting Department, Head Office Cost Control is
processing the Monthly Journal Transactions and Summary report from “Current Year
Budget Report” and “Cost & Budget Report” modules (Oracle) respectively.
PIS records in Expenses Database are then reconciled with that of Accounting.
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3.4 Work Orders (Subcontracted Works)
Process Narrative:
1. Procurement Division prepares Work Order (WO) as per “Procurement Process”.
2. Head Office Cost Control receives the copy of WO and performs a quick review for Site
Coding and Trade Coding.
3. In case of mistakes, Head Office Cost Control refers it to concerned Project
Management.
4. Head Office Cost Control sends the copy of WO to Site Cost Control for reference. Even
though there is a mistake in the WO, copy will still be sent to Site Cost Control.
5. Project Management reviews WO.
6. If WO needs an update, refers to “Procurement Process” for update.
7. Site Cost Control determines WO Actual Cost according to information coming from
Service Marché on-site:
 Payment Certificate of works in progress (Works covered by the current approved Work
order)
 Extra Works further to a Site Work Orders at 100% in case of invoiced received (even if
Service Marché applied a temporary retention percentage).
8. Site Management provides information on determining the Provisional / Valuation value
of Extra Works further to a Site WO (in case of invoice not received).
When Site WO is regularized by Service Marché / Procurement Division, the provisional
value is changed to actual cost
9. Site Cost Control update Expense database with the WO Actual or Provisional Cost.
10. On the other hand, Payment Certificate is processed by Service Marché and forwarded
to Finance Department.
11. Finance Department records the Payment Certificate in GL database.
12. After each closing month in Accounting Department, Head Office Cost Control is printing
13. These reports are forwarded to each Site Cost Control for review and verification. WO
records in Expenses DB are then reconciled with that of Accounting.
Note: Head Office Cost Control has an existing access to Service Marché “Payment Status”
but rarely used because of information available is limited.
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3.5 Company Owned Equipment (Internal Rent)
Process Narrative:
1. Project Management sends a request to Equipment Department.
2. Equipment Department sends the equipment to the requesting Project together with the
Asset Transfer Form (AT).
3. The requesting Project Site receives the equipment and a copy of Asset Transfer is
forwarded back to Equipment Department.
4. Site Cost Control creates Provisional Cost of the Equipment based on Asset Transfer
(AT) In and Out. Calculation of the provision is on “need basis”.
5. Site Cost Control creates and records the Provisional Cost to the Expense Database.
6. In Equipment Department, the Daily Equipment Movement are sent to Finance
Department for further processing.
7. Finance Department provides the Fixed Asset (FA) Billing to Head Office Cost Control.
8. Head Office Cost Control distributes FA billings to the concerned Projects.
9. Site Cost Control update Expense database with the FA Billing replacing the
corresponding provisional cost.
10. If the duration of use in FA Billing is not equal to the actual usage on Site, Site Cost
Control prepares an adjustment and sent to Equipment Department for verification.
11. Equipment Department verifies the adjustment with the Daily Equipment Movement and
Asset Transfer copies they have. If claim is valid, forwards the Adjustment to Finance
Department – FA section. If claim is not valid, Equipment Department informs the Site.
12. Finance Department receives and verifies the adjustment. If claim is valid, adjustment
will be reflected on the next FA Billing. If claim is not valid, FA section informs the Site.
13. FA Billings is recorded in Finance Department GL database.
FA records in Expenses DB are then reconciled with that of Accounting.
Note: Computer and Office Equipment requests go through IT and Office Services
respectively. There is a distinct request form for each type of equipment. Billing will come
from FA also. Process is however similar.
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3.6 Third Party Equipment (External Rent)
Process Narrative:
1. Project Management sends a requests to Equipment Department
2. Equipment Department sends the equipment to the requesting project with all
information relevant to the allocation of the Equipment on Project Site.
3. Project Site receives the Equipment.
4. On a monthly basis, Site Equipment Coordinator forwards the Time Cards to Site Cost
Control.
5. Site Cost Control verifies Time Cards by:
 Type of Equipment
 No. Of Days
 Destinations
6. Site Cost Control creates and records the Provisional Cost in the Expenses database.
7. After receiving the Equipment Time Cards duly signed by the Site’s Representatives,
Equipment Department generates and sends copies of Rental Equipment Billing to Site
Cost Control with original Billing to Finance Department.
8. Site Cost Control verifies these billing. If discrepancies are found, informs Equipment
Department and corrective actions are taken.
9. Site Cost Control changes the Provisional Cost to Actual Cost as reflected in the
External Rent Equipment Billing copy provided by Equipment Department.
10. Finance Department records the External Rent Billing to the GL database.
3rd Party Equipment Billing records in Expenses DB are then reconciled with that of
Accounting.
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3.7 Inter Site Services (PIS)
Process Narrative:
Billing of any kind between two Projects (Labor, Supplies, Services, Equipment Rent, etc...)
1. A Project Site (Beneficiary) sends a request to another Project Site (Origin).
Origin Part:
2. Site Management approves request.
3. Site Management executes the request.
4. Cost Control prepares the PIS and allocates the request as per Budget Item (Credit
Part).
5. Cost Control keeps the PIS copy including attachments (if any) for tracking purposes
and then forward the PIS to Site Management for approval.
6. Site Management approves the PIS and forwards it back to Cost Control.
7. Cost Control send the PIS (White, Blue, & Pink copy) including attachments (if any) to
Cost Control of the Requesting Site (Beneficiary).
8. Cost Control records the Credit Part of the PIS in the Expense database.
Beneficiary Part:
9. Cost Control receives and verifies the PIS.
10. If Cost Control disapproves the PIS, it is sent back to Cost Origin to rectify contents.
11. If Cost Control approves the PIS, allocates the request as per their own Budget Item
breakdown (Debit Part)
12. If Site Management disapproves the PIS:
 Returns the PIS to Origin Site to rectify contents (Unit Prices, Quantities,
Discounts, etc…)
 Totally reject the PIS due to valid arguments.
13. If Site Management approves the PIS, forward it back to Cost Control for further
processing. Cost Control keeps the PIS pink copy with the attachments.
14. Cost Control records the Debit Part of the PIS in the Expense database
15. Cost Control returns the PIS blue copy to Cost Origin and the PIS white copy to Head
Office Cost Control for verification and approval.
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Head Office Part:

16. Cost Control verifies the PIS.
17. If Cost Control disapproves the PIS, one of the following actions is taken:
 Modifies the content of the PIS and then forward the modified PIS to Finance
Department. Copy of modified PIS is also sent to concerned Projects
 Return the PIS to the concerned Projects for further clarifications
18. Finance Department receives the PIS and records it in the GL database.
19. After each closing month in Accounting Department, Cost Control is processing the
Monthly Journal Transactions and Summary report from “Current Year Budget Report”
and “Cost & Budget Report” modules (Oracle) respectively.
PIS records in Expenses DB are then reconciled with that of Accounting.
Note:
PIS procedure does not apply only to Supplies but to anything chargeable from one Project
Site to another.
Existing PIS form has four (4) ply (Original – Accounting, Blue & Yellow – Origin, Pink –
Beneficiary).
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4. Productivity Report Process
4.1 Process Description:

This process shows how to prepare the Productivity Report. The Project Management will
use this report:
 To control and confirm budget quantities,
 To monitor Direct Labor performance,
 To estimate the remaining quantities to complete the Project - base of the
Resources Forecast of the Project (Labor / Concrete / Reinforcement).
4.2 Process Narrative:
1. During the Initial Stage (Budget breakdown):
a. Site Cost Control distributes the Budget quantities by item (Job Code). This
becomes the Site execution target. Quantities are then posted into the
document’s “Budget” column.
b. Document is forwarded to the Project Management for reviews and forecasts of
the final quantities (Hours, Concrete, Reinforcement, and Other quantities).
c. The Project Management forecast quantities are reviewed jointly by the PM,
Project Management Team & Cost Control.
d. After review and approval of all concerned, Site’s forecast become final and is
posted into the “Total at Completion” column.
e. A report showing comments and supporting documents are forwarded to Head
Office Cost Control, Division Manager and Budget & Estimation Team.
f. Head Office Cost Control, Division Manager and Budget & Estimation Team
review and analyze Project Management comments.
g. If there’s a need for a Budget update, Budget & Estimation Team issues a new
budget.
2. During the Execution Stage, the document is updated periodically (monthly basis or
upon Site’s needs).
a. In the Initial Stage, Budget Quantities are already determined and posted. Unless
there is a budget update, budget quantities do not change.
b. Controlled and validated quantities recorded into Cost Control Database are
transferred by Site Cost Control to the Productivity Report Column “Cumul /
Actual as of DD/MM/YY”
c. Project Management Team updates their “Total at Completion” forecast.
d. The Project Management updated forecast are reviewed jointly by the PM and
Cost Control.
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e. Variation between the previous forecast and updated one are tentatively
explained and an internal report is issued.
f. After review and approval of all concerned, the Site’s forecast become “Final” and
is posted into the “Total at Completion” column.
g. If a Major Variation of quantity is noted, report is forwarded to Head Office Cost
Control/ Division Management/ Budget & Estimation Department.
h. Head Office Cost Control/ Division Management/ Budget & Estimation
Department review and analyze the variation.
i. If there’s a need for a Budget update, Budget & Estimation issues a new budget.
j. A report showing comments and supporting documents are forwarded to HOB
cost control only.
Note:
Productivity report prepared on the last days of the month becomes the main supporting
document of the Cost Control report for “In-House Direct Costs”.
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5. Cost Report Process
5.1 Process Description:

This Process describes how Cost Control Team prepares Cost Reports.
5.2 Process Narrative:

1. Drafting of the Cost Report by Site Cost Controller and Project Management.
1.1 Actual Cumulative Costs
Cumulative Expenses records as of the Cost Report issuance date are
transferred from Expenses database to Cost Report Actual Costs.
a. Column “Accounting” = Accounted Expenses = Cost Control records
reconciled with Accounting records at the end of the latest closed month in
General Ledger.
b. Column “Valorized Cost” = Valorized expenses = Cost Control records not yet
in Accounting as of the Cost Report date of issuance.
c. Then Cost Control directly input into the Cost Report tables, column “Stock &
Correction” the following:
 Provision of Correction / Adjustment. Provisional amount without any
transaction yet at the Cost Report date of issuance.
 Deduction of the Site physical stock as of Cost Report date of issuance.
1.2 Calculation of Remaining Costs (In-House / Concrete Works)
a. Direct Costs
 Percentage of Progress as well as to date and remaining quantities (Hours
/ Steel / Concrete / etc.) are available in the Productivity Report for each
concerned Work Packages related to Direct Costs.
 Translations of these quantities into costs are calculated according to the
latest rate like unit prices of steel from the Blanket Contract, concrete
prices from Suppliers, labor as per Team distribution, category, position,
Staff planning …
b. Indirect Costs
 Indirect Labor – as per planning to complete the Project. Remaining costs
is also calculated as per category, position and duration (Planning of PM /
Cost Control).
 Equipment – as per planning of PM / Project Team / Cost Control.
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 Other items like Stationeries, Medicines, Tools, Gasoline, Bus transport,

etc… are generated from mixed calculation between company’s Standard
Ratios, Actual consumption on Sites, and Site Cost Controller’s
observations and experience.
1.3 Other Trades

“Other Trades Works” are corresponding to:
 Architectural Works (External and Internal): Roofing, doors, windows,
partitions, floor / wall covering…
 Decorative Works: Furniture, curtains, chandeliers, TV and hifi equipment,
crockery, linen ware…
 Current Technical Works: Plumbing, electricity, air conditioning…
 Technical Equipment: Industrial kitchen, laundry, water plant, generators,
computers, medical equipment…
 External Technical and Decorative works: Network technical fittings,
Landscaping, paving, fences…
1.4 Other Expenses

a. Other Expenses
- Transport
- Customs
- Moving Furniture
- Insurance
- Design Costs
b. Proportional Expenses
- Overhead
- Warranty period
c. Contingencies
1.5 Remarks on Other Trades / Other Expenses Cost at Completion

There is a permanent sharing of information between Site Cost Control / Head
Office Cost Control and Project Manager to keep Other Trades / Other Expenses
updated.
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2. Review, Approval and Distribution of Cost Report (Site Committee)
2.1 After First Draft of the Cost Report is issued, there will be an Audit by Review
Committee at the Project Site consists of the following:
 Project Manager (PM)
 Project Management Team
 Site Cost Control
Their responsibility is to:
 Review and analyze the results of the Cost Report item-by-item especially for
the Remaining Cost and forecast of Cost at Completion. The Committee may
approve or disapprove some items. If disapproves an item, the source
documents (Production Forecast / labor Planning / Equipment Planning…) are
modified and corresponding alteration is reflected into the Cost Report.
 The Committee approves the final Monthly Cost Report
 Draft the Cost Report comments (Drafted by Site Cost Control according to
the output from PM / PMT).
- Explanation of Variation between current and previous month.
- Explanation of Cumulative Variation.
- Other relevant analysis, comments and proposals.
2.2 Once the Cost Report is fully reviewed and approved by Site Committee, Site
Cost Control and PM should sign the report.
3. Cost Report as well as all relevant supporting documents are forwarded to Head Office
Cost Control.
4. Head Office Cost Control Review, Analyze and Approve The Cost Report
4.1 Head Office Cost Control performs an in-depth review / analysis of all documents
based on all relevant information available and their knowledge with experience
on dealing with the report (ratios…)
4.2 Based on the results of the review, Head Office Cost Control may decide either:
a. Send back the report to the Site Committee for review and amendment
b. Modify and update the report unilaterally.
 Actual Cost update according to the latest Accounting information if higher
than Site’s figures.
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 Remaining Cost (Experience with Company Ratios and / or any other

relevant information from all available sources within the company).
5. Head Office Cost Control summarized all Cost Reports and forward them to Top
Management along with comments.
6. Head Office Cost Control send back each Finalized Monthly Cost Report to the
concerned Sites Cost Controllers.
After submitting the Summary Cost Report to Top Management, Head Office Cost
Control send back each single Cost Report (electronic file) to the concerned Site Cost
Control. Remarks by Head Office Cost Control (if any) will be reflected into the next Cost
Report.
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COST CONTROL SECTION

Doc. Code CCSM

Rev. No. 0.3

Issue Date January 2023

Reviewed by Cost Control Section Head

Name Eng Mamon Abuhantash

Name Hussain Tawfiq / Atef Elsobky Mohamed Asiry

COST CONTROL SECTION MANUAL....................................................................................

 Establish a data base of actual production rates

Cost Control Section

Cost Control Engineer

Job Title Cost Control Section Head Reports To General Manager

Department Cost Control Section Subordinates Cost Control Engineer

 Follow up the Project Budget

 Essentially with bachelor’s degree in Engineering.

 Ideally with a minimum of 8 years of experience in Cost Control.

Skills and Knowledge:

 Good general understanding of Cost Management, Estimating and Change Control.

 Concern for Others

Job Title Cost Control Engineer Reports To Cost Control Manager

Department Cost Control Section Subordinates Cost Controller

Skills and Knowledge:

 Concern for Others

Job Title Cost Controller Reports To Cost Control Engineer

Department Cost Control Section Subordinates n/a

 Bachelor in Business Accounting, Administration or Engineering.

Skills and Knowledge:

 Concern for Others

1. Cost Control Management Plan

2. Execution Budget Preparation Process

3.1 Labor Cost

4. Productivity Report Process

1. Cost Control Management Plan

1. Ensure actual costs allocation to the proper cost center.

1.2 Communication Chart

A measure of the actual cost of the work performed as of a data date.

The estimated cost is needed to complete the remaining work.

1.3.5. Cost at Completion (CAC):

The budget at completion less the Cost at Completion

1.3.7. Earned Value (EV):

Measure of the value of work performed so far.

1.3.9. Indirect Works:

1.4 Cost Coding

1.4.1. Project Code:

1.4.3. Expenditure Type:

Code Expenditure Type

6103400 Concrete - Tools & Equipment

6103500 Concrete - Material

6103600 Concrete - Other Services

1.5 Material Request & Payments Certificate Polic

Materials include all consumables, non-consumables, or Assets, supplied to company projects

1.5.4. Materials Request & Payment Certificate Flow Chart

Requestor/ Storekeeper Construction Procurement Cost Control Higher Supplier

Send copy for

1.6 Subcontractor Payment Certificate Policy:

1.6.2. Policy & Procedure:

1.6.4. Subcontractors Payment Certificate Flow Chart:

Quantity Construction Quality Project Cost Accountant

1.7 Debit Note Policy:

Job Title Responsibilities

1.7.6 Debit Note Template:

1.8 Petty Cash Policy:

1.8.4. Key Roles and Responsibilities: