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Construction Draw Review Checklist for Lenders and Owner's Reps

May 2026 · 7 min read

A complete checklist for reviewing G702/G703 pay applications — what to verify before you certify or fund every draw.

Why a checklist matters

Construction draw review is a high-stakes process with many moving parts. Lenders funding draws and owner's representatives certifying payments both carry liability for amounts they approve. A systematic checklist is the difference between a 45-minute forensic review and a 10-minute rubber stamp that misses $80,000 in overbilling.

This checklist covers the eight categories most often missed in manual review, organized by section of the pay application. Use it for every G702/G703 draw, regardless of project size.

1. Contract and Cover Sheet (G702)

Project name, contract number, and pay app number match the contract

Application date and period through date are consistent

Scheduled value on the cover matches the original contract sum plus approved change orders

Previously certified total matches the prior pay app's certified amount

Retainage percentage matches the contract terms

G702 signature is present and dated correctly

2. Schedule of Values (G703) Math Verification

Column A (Scheduled Value) sums to the contract sum on the cover sheet

Column G (This Period) = (Column D × Column F) + Column E − Column C for each line

Column H (Materials Presently Stored) is zero or substantiated with documentation

Column I (Total Completed + Stored) = Column G + Column H + Column C

Column J (% Complete) = Column I ÷ Column A for each line

Column K (Balance to Finish) = Column A − Column I for each line

Column L (Retainage) = Retainage % × Column I for each line

Total retainage row equals sum of all line retainage amounts

3. Retainage Verification

Retainage percentage matches the contract (typically 5% or 10%)

Retainage reduction threshold hasn't been applied prematurely

Any reduced retainage line items have reached the contractual completion threshold

Retainage is calculated on stored materials only if the contract allows it

No retainage release has occurred without substantial completion documentation

4. Stored Materials

All stored materials claims have supporting documentation (AIA G706A or equivalent)

Delivery receipts or invoices are present for claimed materials

Materials are insured and stored in a bonded location or on-site

Stored materials amounts are reasonable relative to the scheduled value of the line

Materials won't be incorporated before the next pay app (not already billed as complete)

5. Front-Loading and Completion Percentages

Mobilization and general conditions aren't claimed at 100% before work begins

No line item shows 100% complete that hasn't been verified in the field

Early pay app line items (sitework, excavation) don't show disproportionately high completion

Round-number completion percentages (25%, 50%, 75%) are supported by field verification

Completion percentages are consistent with site inspection or inspector's report

6. Construction Sequencing Logic

Interior finishes aren't at advanced completion while framing or MEP rough-in is still early

Mechanical and electrical completion percentages are consistent with each other

Foundation line isn't at low completion while framing is substantially complete

Roofing isn't more complete than the structural systems it depends on

Any sequencing anomalies have a documented explanation

7. Change Orders

All executed change orders are reflected in the scheduled value total

No change order scope appears to be double-billed in base contract line items

Pending change orders are noted but not included in certified amount

Change order line items have their own rows, not folded into base contract lines

8. Lien Waivers and Documentation

Conditional lien waiver from GC for the amount being certified

Subcontractor lien waivers for the prior pay period (if required by contract)

Any required consent of surety is present

Special inspection reports or building department approvals are current

Certificate of insurance is current and covers required amounts

How long should a draw review take?

A thorough manual review using a checklist like this takes 45–90 minutes for a 20-line schedule of values, depending on the complexity of the stored materials claims and the quality of documentation provided. On a project with 40+ line items or significant stored materials, budget 90–120 minutes.

In practice, most reviewers spend 10–20 minutes and skip sections 2, 5, and 6 — the math verification, front-loading check, and sequencing logic. Those are also the three most expensive omissions.

45–90 min

Thorough manual review

10–20 min

Average reviewer spends

< 60 seconds

AI audit (XOPON)

What an AI audit catches that a checklist misses

A checklist tells you what to check. It doesn't do the math. The retainage verification section above requires computing the correct retainage for every line item and comparing it to what was submitted. On a 30-line schedule of values, that's 30 independent calculations — each one a potential transcription error.

The construction sequencing section requires knowledge of typical MEP dependency order, which most reviewers have in their head but can't systematically apply under deadline pressure. A reviewer who knows that electrical rough-in can't be 80% when mechanical is at 40% still needs to catch it on a 35-line schedule with a 15-minute review window.

AI-based review does the arithmetic on every line, applies sequencing logic across all related trades simultaneously, and flags anomalies with specific dollar amounts — in under 60 seconds. Use this checklist for items that require human judgment (lien waivers, field verification, documentation review). Use AI for the math and pattern detection.

Automate sections 2, 5, and 6

The three most frequently missed checklist sections — math verification, front-loading, and sequencing logic — are exactly what XOPON audits automatically. Paste your G703 and get a full forensic report in 60 seconds.