Reconcile a construction draw to approved work, retainage and budget changes

A draw package should explain what was completed, what is eligible, what has already been funded and what remains withheld. A change-order log should show approved and pending changes separately so an unaccepted cost does not quietly enter the borrowing base.

The OCC construction administration discussion addresses progress monitoring and disbursement controls. This original workbook illustrates one cumulative-work convention. Actual advances depend on the loan, budget, inspections, equity order, lien documentation and other applicable conditions.

Use cumulative amounts consistently

Enter cumulative eligible completed work and cumulative prior funding for the same budget line. Do not combine a current-period invoice with life-to-date funding. Identify whether stored materials, deposits or other categories are eligible under the actual agreement before including them.

The sample retainage percentage is hypothetical. It is not a required industry standard, and the workbook does not determine lien-waiver requirements or legal sufficiency. Obtain the appropriate documents and professional review for the transaction and jurisdiction.

Blank draw register

budget_line,original_budget_usd,approved_changes_usd,pending_changes_usd,approved_budget_usd,eligible_completed_work_usd,retainage_percent,prior_funded_usd,current_request_usd,support_and_open_issue
B001,,,,,,,,,

Field instructions and common errors

Completed hypothetical draw

budget_line,original_budget_usd,approved_changes_usd,pending_changes_usd,approved_budget_usd,eligible_completed_work_usd,retainage_percent,prior_funded_usd,current_request_usd,support_and_open_issue
Structure,800000,50000,0,850000,500000,10,300000,150000,Inspection and invoices required; approved change CO-1 included
Mechanical,300000,0,20000,300000,300000,10,220000,50000,"CO-2 pending; $20,000 potential additional cost not approved or included in eligible work"

The structure line has an $800,000 original budget and a $50,000 approved change, producing $850,000 approved budget. Eligible completed work is $500,000. Under the assumed 10% retention, $450,000 is eligible before prior funding; subtracting $300,000 already funded produces a $150,000 request.

The mechanical line has $300,000 eligible completed work and $220,000 prior funding. The same illustrative retention leaves a $50,000 request. Its $20,000 pending change remains visible but does not enter the approved budget or completed-work base.

The two arithmetic requests total $200,000. That is not an instruction to disburse: other conditions can reduce or delay funding. If the pending change is necessary to finish mechanical work, a cost-to-complete forecast should show the possible $20,000 increase even before approval.

Reconcile remaining work and funding

The structure line has $350,000 of approved budget not yet represented by eligible completed work. That amount differs from undrawn loan availability because retainage, equity contributions, fees and other lines can affect funding.

Prepare a separate project-wide cost-to-complete test using current forecast costs and accessible remaining sources. Do not assume an unused contingency can be moved without any required consent. Track whether a change consumes contingency or increases total budget.

Preserve exceptions in the package

A negative current request can indicate prior overfunding, a corrected eligibility measure or a convention mismatch. Leave it visible for investigation. Do not force every line to zero and lose the reconciliation.

Submit the actual required invoices, progress evidence and approvals through the agreed channel, identifying the draw number and budget version. Retain the lender’s disposition and update prior funding only after the advance occurs. The register should make each request reproducible and keep unfinished funding questions visible.