Final accounts

The final account is prepared at the completion of the construction phase of a project. As the name implies, the final account is a document that brings together all the financial aspects of a project into one single document. Its purpose is to allow both the employer and the contractor to value the complete project.

Timing

The contract states when the final account should be prepared. Often, if the project's financial report has been prepared in a similar format, it is possible to use that document as the basis of the final account itself. The Joint Contracts Tribunal contract JCT 11 Private Without Quantities, clause 4.5.1, states that not later than six months after practical completion, the contractor shall provide the quantity surveyor with all the documents needed for the adjustment of the contract sum.

JCT DB 2016 states that the contractor will issue a final statement (clause 4.24.1) to the employer within 3 months of practical completion and if this is not issued, then the employer may issue a final statement to the contractor within 2 months following issue of a notice (clause 4.24.3).

Remeasures

Under 'traditional' contracts based upon bills of quantities (BQs), it is necessary to remeasure the works for the final account. However, if the BQs have been measured from accurate drawings produced at the tender stage, it is not necessary to remeasure the whole project. Elements that have been subject to change or design development will need to be remeasured on site or, alternatively, from as-built drawings. Sub-structure and drainage sections are nearly always remeasured, due to the uncertainty of ground conditions, depths, and so on.

Once the remeasured value has been ascertained, the original BQ allowance should be omitted from the final account.

While undertaking the remeasuring of works, the project surveyor is advised to identify all the items or quantities included in the BQ that are described as 'APPROXIMATE' or 'PROVISIONAL'. Such items and quantities should be remeasured, or omitted from the final account, as appropriate. Items of this nature are often included in BQs as allowance for possible works that are not detailed on the tender drawings but which the surveyor, for example, deems will form an integral part of the completed works.

Architect's instructions

During the course of the works, architect's instructions (AIs) will be issued. These record changes to the tender drawings. They may simply detail a small item, or alternatively, may comprise a drawing issue which may, on occasion, change a complete element.

When the AI concerns a prime cost (PC) sum, provisional sum or provisional item, the item is first entered in the AI section of the final account, with a cross-reference to the appropriate section. Cost values are not included against the AI section, but in the section concerned.

Upon receipt of the instruction, an approximate value should be established and entered at the bottom of the sheet. The approximate value of the AI will be established by measuring approximate quantities to establish an estimated value. The value should be entered onto the Financial Report AI Summary Sheet for Financial Report Purposes.

As the contract progresses, the instruction or variation should be measured and priced accurately, as soon as possible after receipt. Ideally, this should be no later than immediately after the work is actually executed on site. The value will be agreed with the contractor's quantity surveyor or the private quantity surveyor (PQS) and entered on the sheet as 'AGREED'.

Anticipated architect's instructions (AAIs)

During the course of the contract, information that may be considered as a possible variation, such as a letter, sketch, drawing, minute of a meeting, conversation or site instruction, may arise. Initially, this information may not be confirmed in an AI. However, it is best practice to be aware of such potential variations and to undertake due assessment of the financial reports prepared and issued to the employer by the private quantity surveyor (PQS) or the contractor's surveyor.

The process for valuing or costing such variations is identical to that outlined above for AIs.

When undertaking and completing a final account, it may be necessary to seek AIs for items of works undertaken by the contractor, but not necessarily instructed. During the course of the works, the contractor will issue contract variation instructions (CVIs) or requests for information (RFIs) directly to the architect. This procedure is adopted to facilitate the audit trail for the contractor and allows information to be sought from the design team, perhaps through the clarification of a particular detail or specification.

However, it is best practice to request that the architect issues formal AIs to cover all such variations.