Case Study - Auditing - Lazard Freres

In August, 1996, Project Control Group, Inc. completed its project management services to relocate Lazard Freres from One Rockefeller Plaza to 30 Rockefeller Plaza. Upon completion of work, Rockefeller Center Management presented Lazard with a $500,000 invoice for elevator charges accumulated during the $38 million/350,000rsf construction project.

We advised Lazard Freres that this amount must be incorrect, given the volume of work performed. Lazard extended our contract to represent them in auditing these charges.

As the construction manager was responsible for reserving all elevators, we met with the Superintendent and obtained a copy of the elevator reservation log. This provided us with a record of all weekday deliveries to the site (where shared usage was involved), as well as nights and weekends (where the elevator was reserved on an exclusive basis).

We prepared a comparison document matching dates on the CM chart to invoiced dates by Rockefeller Center Management in order to reduce the number if incidents in the first phase of our analysis. Our second audit task was to contact other large tenants that were utilizing the elevators for construction deliveries during our project. In doing so, we discovered that Rockefeller Center Management was double and triple billing its elevator time. Other tenants had invoices for shared and exclusive use of the elevators on the same days and times that Lazard was billed.

The result of this conclusive study was a reduction in the Lazard invoicing from $500,000 to $250,000. The other tenants pressed successfully for reductions as well.