Audit Case Study Synopsis™ (9237)

Project
Los Angeles, CA

Industry
Entertainment

Savings (total)
$2,735,861
Savings (square foot)
$14.48

Audit Accuracy™
99.46%
Audit Timeline™
309 days
Audit Timespan™
284 days
Audit Return™
$14.48

Campaign Commencement
Q3 2005
Representation Type
Exclusive Service Provider
Campaign Scope
United States Portfolio
Audit Cycles
Annual-Recurring

Our team’s audit covered four (4) operating years and three (3) changes in ownership.

RRG was initially engaged to determine the validity of a minimal operating expense “carry over” charge from a prior landlord’s cost records. During the initial field-work visit, our team discovered that the charge was indeed erroneous because the base year tax amount was excluded from the overall base year cost determination. Our team negotiated with the landlord to secure the adjustment. The new corrected base year was confirmed and the landlord agreed to utilize the increased base year for the remainder of the lease term. Following an additional detailed review of the operating expense data, general ledgers, invoices, work-orders and tax bills, our team documented that the Proposition 13 clause stipulated in the lease was not adhered to following two (2) changes in ownership. We also noticed that the client had been and was currently being charged improperly for costs associated with after-hour HVAC usage. Our team worked with utility suppliers to verify usage numbers and rate costs. Due to the magnitude of the audit findings, the landlord suggested engaging a third party engineer who had worked on the building systems in the past. All parties agreed to the study by the engineer who subsequently verified and concurred with all of our team’s findings. The landlord agreed to apply all adjustments in accordance with the audit results for each remaining year of the lease term.

Real estate taxes
Proposition 13 protection
HVAC
After hour utilities
Capital improvements

 
 

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