A performance audit is a mandatory assessment required for all condominium corporations holding newly-built buildings. The main purpose is to identify any deficiencies in the performance of the building elements. An audit in the first year is necessary, to ensure accountability of the condominium corporation. An engineering company is required to perform the performance audit.
Condominium corporations are entrusted with the management of communal spaces, financial assets, and adherence to established regulations. Regulatory compliance, including completing a performance audit, ensures responsible management of the building. Non-compliance can lead to legal disputes, compromised safety standards, and erosion of trust within the community. A performance audit is aimed at ensuring all components of the building are working safely and properly.
While required by legislation, they also help ensure other legislative requirements are complied with.
A performance audit needs to follow condominium regulations. Specific, additional objectives may be set, too. A complete evaluation of all building elements, and how they are performing, separately and together, is completed, to ensure the building is functioning as intended.
Documentation and records on past surveys, construction, and other relevant activities will be reviewed, as part of the audit process, before a physical inspection takes place. This helps guide and inform the inspection. The auditor then conducts the building inspection and assessment. A performance audit tracking summary is updated as the assessment takes place.
Special testing may be required, such as thermographic scans, to assess the performance of specific building elements. Surveys may also be completed.
Performance auditing has a direct impact on regulatory compliance, but also offers indirect benefits to all stakeholders.
Performance audits increases transparency, and protects both the condominium corporation and residents, because the audit is completed by a third-party professional engineering agency. It ensures the building construction company and the condo board are operating properly. It helps foster trust amongst all parties, too, since an unbiased, professional report is done.
Irregularities and concerns can be detected early. These audits are proactive measures, and can identify building code and other regulatory violations before a larger issue arises. Timely detection allows for corrective action, preventing legal complications and financial losses.
The audit provides an additional check to ensure buildings are not only safe, with all building components working together properly, but also to confirm building regulatory requirements are followed. It acts as a confirmation of compliance, so the condo corporation can be confident in meeting regulatory obligations.
With the transparent reporting of compliance with building and regulatory requirements, all stakeholders can feel more confident. This can help encourage potential buyers and investors, since the condo property is seen as a more secure investment.
Audit results provide valuable insights into industry best practices and benchmarking against other buildings. By benchmarking against these practices, condominium corporations can not only ensure compliance but also demonstrate if they are superior and surpass standards to encourage investors and buyers.
When executed comprehensively and collaboratively, a performance audit can guide maintenance and repairs in a more financially-responsible and effective way. Audit recommendations serve as a road map for work to be done, so it can be budgeted for in the most optimal way.
Residents are also better informed and are more likely to be actively engaged, knowing that their building is audited, so they are more involved. They are more likely to comply with regulations and condo-specific rules.
Addressing compliance issues proactively minimizes the risk of legal disputes. By adhering to regulatory standards, corporations can avoid costly litigation and damage to their reputations. It is also likely to discourage frivolous claims.
Condo corporations can benefit from performance audits beyond the minimum compliance requirements for auditing.
Over time, a regular, objective assessment to inform maintenance and repair planning saves money, by preventing costly repairs that are often required if issues are not identified early. In addition, professional performance auditing ensures that building and safety codes continue to be adhered to.
A condo board may be tempted, after the mandatory, engineer-conducted performance audit, to try to perform a more basic internal audit to save money for future inspections. However, an internal audit or inspection is unable to provide the same benefits. Without the objectivity, special expertise, and testing methodology, the same results and benefits aren't possible.
Furthermore, striking a balance between objective evaluation and collaborating with current stakeholders can be difficult, but a professional engineering audit company can help maintain this balance without straining relationships.
A professional engineering evaluation also helps provide evidence of due diligence to satisfy accountability requirements for the condo corporation, which is important on an ongoing basis.
Professional audit teams that identify and prioritize work allows condo boards to effectively budget, and gives them the tools they need for the planning phase of improvements, maintenance, and repairs.
ABSI offers performance audit services, to help boards go beyond meeting their minimum compliance obligations, by providing comprehensive performance audit reports which make informed decisions and better planning possible.
** Note that this article is referring to condo building audits, not financial audits of condo corporations and public administrations as required by the Auditor General.
Naji Hassan, a renowned professional in Building Science and Engineering, brings a wealth of knowledge and experience to his field. Educated at Beirut Arab University and Harvard Business School Online, Hassan has honed his expertise in structural and municipal engineering, building science, and business management. As the President of Accent Building Sciences and an experienced Senior Project Manager, he has made significant strides in building envelope engineering, building condition assessments, and energy retrofit programs. His commitment to innovation and excellence is evident in his approach to large-scale project management and his active participation in industry organizations. Hassan is not only a leader in his field but also a prolific writer and thought leader. He regularly shares his insights and experiences through articles on LinkedIn, which can be found at LinkedIn Articles. Additionally, he maintains a blog where he delves deeper into various aspects of building science, accessible at Accent Building Sciences Blog. Outside of his professional pursuits, Hassan enjoys travel, golf, languages, gardening, and music, reflecting his diverse interests and well-rounded character. Naji Hassan's journey in building science and engineering is not just a career but a testament to his lifelong dedication to learning, teaching, and inspiring others in his field.
