Evaluating a modular building manufacturer requires more than reviewing certifications, project references and production capacity. For Australian projects, buyers also need to understand how the factory manages quality, fabrication, engineering documentation, material traceability and project-specific compliance evidence.
A factory audit can provide direct visibility into these systems before production or shipment. It can help procurement teams, developers and head contractors identify gaps that may otherwise become difficult or expensive to resolve after modules leave the factory.
This guide provides a practical modular building factory audit checklist for Australian projects, covering quality management, structural fabrication, engineering documentation, Evidence of Suitability, transport, lifting and licensing considerations.
For the broader supplier-selection process, see How to Evaluate a Modular Building Manufacturer for Australian Projects.
When Should You Conduct a Modular Building Factory Audit?
Not every procurement requires the same level of factory verification. The appropriate audit scope should reflect the project value, technical complexity, procurement model and level of risk.
- engaging a manufacturer for the first time;
- sourcing modules from an overseas manufacturer;
- procuring higher-value or higher-risk modular buildings;
- the project includes specialised structural or building-services requirements;
- manufacturing QA records form an important part of the compliance evidence or inspection strategy;
- significant fabrication, fit-out or concealed work will be completed before shipment.
The audit should be adapted to the actual project rather than treated as a universal statutory checklist.
Where the audit involves technical judgement about structural adequacy, welding, materials, fire performance or another regulated discipline, that judgement should be made by an appropriately qualified practitioner. A procurement or factory audit can verify that documentation exists and is controlled, but it does not replace professional engineering or statutory review.
1. Review the Manufacturer’s Quality Management System
A factory audit should begin with the manufacturer’s overall quality-management framework.
ISO 9001:2015 can provide useful evidence that a manufacturer operates a structured Quality Management System (QMS), but ISO certification alone does not demonstrate that a finished modular building complies with the NCC.
Where ISO 9001 certification is relied upon during supplier due diligence, buyers should confirm that the certificate is current and that its scope covers the relevant manufacturing activities.
The audit should also examine how the QMS operates in practice. Useful evidence may include:
- current procedures and process documentation;
- management-review records where these form part of the QMS;
- internal-audit records;
- corrective-action records;
- controlled drawings and specifications available at production workstations;
- document revision and approval controls.
The key question is not simply whether the manufacturer has a QMS certificate, but whether the documented quality system is actually reflected in day-to-day production.
2. Check Material Traceability
Material traceability helps link the products and components installed in a module to the records relied upon by the project.
The required level of traceability depends on the project QA and compliance strategy. Not every consumable or minor component requires the same level of documentation, so the audit should focus on project-relevant materials and components.
During the audit, check whether:
- incoming materials are inspected against purchase orders and specifications;
- materials requiring traceability are clearly identified;
- applicable certificates, test reports or product records can be linked to the relevant material;
- materials are stored and handled in a way that reduces damage or degradation;
- non-conforming materials can be identified, quarantined and controlled;
- traceability records are maintained at the level required by the project.
For structural steel, fire-rated products, façade materials or other compliance-sensitive components, the ability to trace materials back to supporting evidence can be particularly important.
3. Review Inspection and Test Plans
Inspection and Test Plans, commonly referred to as ITPs, define when and how manufacturing activities are inspected.
A well-developed ITP should reflect the actual project manufacturing sequence rather than functioning as a generic factory template.
Buyers should review whether the project ITP identifies the relevant manufacturing stages, acceptance criteria and inspection responsibilities.
Depending on the project, this may include:
- fabrication inspections;
- dimensional checks;
- welding inspections;
- building-services inspections;
- concealed-work inspections;
- coating inspections;
- fit-out inspections;
- final pre-dispatch inspections.
Hold points and witness points should be clearly identified where they are required by the contract or project QA plan.
Inspection records should also be completed, appropriately authorised or attributable, and retained in accordance with the applicable document-control requirements.
4. Examine Non-Conformance and Corrective-Action Processes
Even well-controlled factories encounter non-conformances. What matters is how those issues are identified, documented, assessed and closed out.
The audit should confirm that the manufacturer operates a documented non-conformance reporting process.
Rather than reviewing every historical NCR, buyers can examine a representative sample and assess whether the records show:
- a clear description of the non-conformance;
- disposition or proposed corrective action;
- responsibility for follow-up;
- closure status;
- root-cause analysis where required by the QMS or justified by the significance or recurrence of the issue.
Repeated non-conformances can be particularly useful indicators of whether corrective actions are addressing underlying process problems rather than individual defects.
The audit should also examine how the manufacturer deals with non-conforming products or materials supplied by external vendors.
5. Verify Dimensional Quality Control
Dimensional control is particularly important in volumetric modular construction because separate modules must align at the installation site.
Small manufacturing deviations can affect:
- module-to-module alignment;
- structural connections;
- façade interfaces;
- service connections;
- internal finishes;
- foundation interfaces.
The audit should confirm that the manufacturer has a documented dimensional-control process based on the approved design and project tolerances.
Measurement equipment should be appropriately calibrated or verified at defined intervals and suitable for the required measurement accuracy.
Where required by the project QA plan, as-built dimensional records should also be maintained.
For larger or more complex projects, observing module fit-up or trial alignment can provide additional confidence before modules are transported to site.
6. Assess Welding and Structural Fabrication Controls
Where structural steel forms part of the modular building’s load-bearing system, welding and fabrication controls become an important part of factory due diligence.
The audit should confirm that qualified Welding Procedure Specifications are available where required by the applicable welding standard and project specification.
The relevant WPS should cover the production welds, materials and joint configurations used in the project.
Buyers should also verify that:
- welders performing the work hold qualifications relevant to the welding process and material;
- welding inspectors have qualifications and competencies appropriate to the inspection scope;
- welding records are maintained at the traceability level required by the project QA plan;
- welding consumables are stored and controlled appropriately.
Detailed technical assessment of weld quality or structural adequacy should be carried out by appropriately qualified personnel rather than inferred from document availability alone.
7. Review Structural Steel Material Records
Where material certificates are required by the project specification or applicable fabrication requirements, they should identify the specified steel grade and product standard.
Depending on the type of steel product used, relevant product standards may include standards such as AS/NZS 3678 or AS/NZS 1163.
The factory audit should check whether material documentation is:
- current;
- complete;
- traceable to the relevant material lot;
- consistent with the specified steel grade;
- consistent with the applicable product standard.
Where supplementary material testing or inspection is specified for the project, the corresponding records should also be available and traceable to the relevant material.
The purpose of this review is not simply to collect certificates. It is to establish whether the materials actually incorporated into production can be linked back to the documentation relied upon by the project.
8. Check Corrosion-Protection Controls
Corrosion protection should be reviewed against the project environment, material specification and selected protection system.
The audit approach will differ depending on whether the modules use a painted system, galvanised steel or another corrosion-protection method.
For painted systems, useful records may include:
- surface-preparation records;
- application conditions;
- coating system details;
- coating build;
- dry film thickness measurements;
- inspection records.
For galvanised systems, the relevant documentation should instead reflect the requirements of the applicable galvanising specification.
Applicable references may include the relevant AS/NZS 2312 series for protective coating systems, or AS/NZS 4680 for hot-dip galvanised coatings, where specified by the project.
The audit should therefore assess the actual specified system rather than applying the same coating checklist to every modular building.
9. Review Structural Engineering Documentation
Factory due diligence should also confirm that the required structural engineering documentation is available and coordinated with the manufactured modules.
Relevant documentation may include structural calculations, design drawings, connection details and engineering certification where required.
The audit should verify that project structural calculations:
- identify the applicable design basis;
- address site-specific design actions;
- reference the standards relied upon by the project;
- correspond with the current design documentation.
The engineer responsible for the design should hold any registration required by the jurisdiction in which the project is located.
Where an audit requires judgement about calculation accuracy, structural adequacy or the validity of a load path, that assessment should be performed by an appropriately qualified structural practitioner.
In this context, the factory audit is primarily intended to verify that relevant documentation, controls and production evidence are available, current and consistent with the manufactured product.
10. Check Transport and Lifting Documentation
Modular buildings experience temporary conditions during transport, lifting and installation that may differ from their final in-service condition.
Relevant engineering documentation should therefore address the temporary actions and handling conditions associated with the proposed logistics methodology.
The audit should verify the availability and coordination of documents covering, where applicable:
- transport design assumptions;
- module restraint arrangements;
- lifting points;
- lifting configurations;
- temporary supports;
- lifting methodology;
- proposed lifting equipment;
- relevant logistics assumptions.
Responsibility for these documents does not necessarily sit entirely with the manufacturer.
Depending on the project delivery model, transport and lifting documentation may be prepared by the manufacturer, logistics contractor, lifting contractor, engineer or another responsible party.
The audit should therefore confirm that responsibilities are clearly assigned and that the logistics methodology is consistent with the assumptions used in the module design.
11. Review Module Connections and Foundation Interfaces
Module interfaces are a critical coordination point in volumetric construction.
The audit should confirm that current drawings and design documentation are available for:
- inter-module connections;
- module-to-foundation connections;
- structural interfaces;
- foundation interfaces.
The documentation should identify how relevant design actions are intended to transfer through the connection and load-path system.
However, assessment of whether those connections are structurally adequate remains an engineering responsibility.
Foundation-interface drawings should also provide sufficient information for the site-based foundation designer to coordinate:
- module support locations;
- fixing positions;
- connection requirements;
- tolerances;
- relevant interface dimensions.
Connection documentation should be reviewed or certified where required by the project’s engineering and jurisdictional framework.
12. Check Evidence of Suitability Documentation
For Australian projects, buyers should also review the documentation being relied upon to support the suitability of relevant materials, products, forms of construction or designs.
NCC Part A5 sets out documentation requirements for design and construction, including the Evidence of Suitability provisions. For BCA projects, A5G3 identifies several forms of evidence that may be used, depending on the material, product, form of construction, design and proposed compliance pathway.
The appropriate evidence depends on the proposed product, use, compliance pathway and approval strategy.
CodeMark Certificates
Where a CodeMark Certificate of Conformity is relied upon, its use should also be considered in the context of applicable State or Territory requirements and the project’s approval pathway. Verify that:
- the certificate is current;
- the proposed use falls within its scope;
- relevant conditions are understood;
- relevant limitations are understood.
A CodeMark certificate does not by itself establish approval for the complete building or project.
Accredited Test Reports
Where test evidence is relied upon, check that the reports come from an Accredited Testing Laboratory appropriate to the evidence being relied upon.
Where a NATA-accredited laboratory is relied upon, its accreditation scope should cover the relevant testing.
Product Technical Statements
Where a Product Technical Statement is used, check whether it clearly identifies:
- the proposed use;
- relevant NCC requirements;
- supporting evidence;
- applicable limitations;
- the basis of the compliance statement.
Other Third-Party Certification
Where another third-party certification is relied upon, buyers should review its:
- currency;
- scope;
- issuing organisation;
- relevance to the proposed use.
The factory audit does not determine whether the evidence package is legally sufficient for project approval.
Instead, the auditor should identify whether the relevant evidence is available and record apparent gaps for follow-up by the project’s certifier, approval authority or appropriately qualified practitioner.
For a detailed explanation, see Modular Office Building Approval in Australia: Evidence, Documentation and State Pathways.
13. Verify Licensing and Practitioner Registration
Factory production and site-based building work are not necessarily governed by the same licensing arrangements.
Australian licensing and practitioner-registration requirements vary by state and territory and also depend on the work being undertaken.
For site-based work, the audit or supplier review should confirm:
- which entity will perform the work;
- what licensing or registration requirements apply;
- whether relevant practitioners hold the required registration;
- how specialist trades will be engaged;
- how licence or registration status has been verified.
For overseas manufacturers, particular attention should be given to how Australian site-based installation, connections and regulated trade work will be delivered under the relevant jurisdiction’s requirements.
The manufacturer’s overseas factory credentials do not automatically replace Australian licensing or practitioner requirements.
What Should a Factory Audit Report Include?
A factory audit should result in more than informal observations.
The audit report should clearly record what was reviewed, what was found and what requires follow-up.
A practical report may include:
- audit scope and date;
- areas and manufacturing processes reviewed;
- documents and records examined;
- conforming items;
- observations;
- identified non-conformances;
- evidence or documentation gaps;
- items requiring engineering or regulatory review;
- corrective actions or follow-up requests;
- responsible party;
- target completion date;
- supporting evidence reviewed.
The report should also distinguish between factory audit findings and technical or statutory compliance conclusions.
A factory auditor may identify missing documents or QA gaps, but engineering adequacy and statutory approval remain the responsibility of the relevant qualified professionals and authorities.
Common Red Flags During a Modular Factory Audit
Several issues may indicate that deeper investigation is required before a manufacturer is approved.
- outdated drawings being used in production;
- unclear material traceability;
- inconsistent inspection records;
- repeated NCRs without effective corrective action;
- welding records that cannot be linked to the relevant production work;
- missing or inconsistent material certificates;
- incomplete dimensional records where they are required;
- undocumented design changes;
- structural documents that do not match the manufactured module;
- unclear responsibility for transport or lifting design;
- compliance evidence that does not clearly cover the proposed use;
- uncertainty over Australian site-work licensing or practitioner registration.
A single issue does not necessarily mean the manufacturer is unsuitable. The significance depends on the project, the nature of the gap and whether it can be resolved before production or delivery.
Questions to Ask During a Modular Building Factory Audit
- Is the manufacturer’s QMS being implemented in actual production?
- Can important project materials be traced to the relevant supporting documentation?
- Are current drawings and specifications available to production personnel?
- Are inspection and test records being maintained for the required stages?
- How are non-conformances controlled and closed out?
- Are welding procedures, qualifications and inspection records appropriate to the project?
- Can structural materials be traced to the required certificates?
- Are dimensional tolerances being monitored?
- Is the current structural design documentation available and coordinated with production?
- Are transport and lifting responsibilities clearly defined?
- Are module connection and foundation-interface documents available?
- Is the required Evidence of Suitability documentation available for review?
- Are Australian site-work licensing and practitioner requirements clearly allocated?
FAQ
Is a factory audit mandatory for every modular building project in Australia?
No. There is no single universal requirement that every modular building project must undergo the same factory audit.
Whether an audit is appropriate depends on factors such as procurement risk, project specifications, contractual QA requirements, the compliance strategy and the level of off-site completion.
Does ISO 9001 mean a modular manufacturer is NCC compliant?
No. ISO 9001 relates to a manufacturer’s quality-management system. It can provide useful evidence of structured processes, but it does not establish that a specific modular building complies with the NCC.
What should be checked during a modular factory audit?
A factory audit may review quality-management systems, material traceability, ITPs, non-conformance controls, dimensional accuracy, welding, material records, corrosion protection, engineering documentation, transport and lifting information, connection details and compliance evidence.
The audit scope should be tailored to the project.
Should structural calculations be reviewed during a factory audit?
The audit can confirm that current structural calculations and associated engineering documentation are available and correspond with the manufactured modules.
Technical assessment of structural adequacy or calculation accuracy should be undertaken by an appropriately qualified structural practitioner.
Can a factory audit replace Australian building approval?
No. A factory audit is a supplier due-diligence and quality-assurance activity.
It does not replace NCC compliance assessment, building approval, certification or other jurisdiction-specific statutory processes.
Can overseas modular manufacturers be audited for Australian projects?
Yes. Overseas factories can be audited using the same risk-based principles, but the review should also consider how Australian compliance evidence, engineering responsibilities, site-based work and jurisdictional licensing requirements will be addressed.
Is CodeMark required for every modular building?
No. CodeMark is one form of product certification that may provide recognised evidence within the scope, conditions and limitations of the relevant certificate.
Whether it is applicable depends on the product, proposed use and compliance strategy.
Related Resources
- How to Evaluate a Modular Building Manufacturer for Australian Projects – manufacturer selection and qualification guide.
- Modular Office Building Approval in Australia: Evidence, Documentation and State Pathways – detailed approval and evidence guidance.
- NCC Class 5 Modular Office Buildings: Compliance Requirements in Australia – technical NCC requirements.
Sources and review date: Content checked against publicly available NCC, ABCB and relevant state and territory regulator sources in August 2026.
Disclaimer: This guide is provided for general information and supplier due-diligence purposes only. It does not constitute legal, engineering or other professional advice. Project requirements depend on the building, location, compliance pathway and applicable jurisdiction. Technical and statutory matters should be reviewed by appropriately qualified practitioners and relevant approval authorities.
Mont Duan
Experienced in modular building engineering, technical design and construction solutions, with a focus on delivering efficient and reliable modular building projects.
