Closing out a public works project can feel like one of the most complex phases of the construction lifecycle. Yet, as Leeann Errotabere, Consultant Expert in Procurement and CUPCCAA, shared at CASBO Con, a strong understanding of key statutes, timelines, and internal processes can transform closeout from a risk point into a well-managed, predictable step.

This session focused on practical strategies that help school business officials protect public funds, maintain compliance, and streamline internal workflows.

“We’re caretakers of our kids’ money, our taxpayer dollars… everything we do is to save those resources for our students.”

Start with the Statutes That Drive the Process

Successful project closeout begins with knowing the legal framework that governs your actions:

• Public Contract Code 7107 establishes retention release requirements and prompt payment timelines.
• Civil Code 8180 defines the Notice of Completion process, which ultimately triggers retention release.
• Public Contract Code 7201 caps retention at 5% for public works projects.

While the 5% retention cap supports contractor cash flow, it also creates real risk for agencies. As noted in the session, punch list items can sometimes exceed that 5%, leaving districts with limited leverage if issues remain unresolved. This reinforces the importance of strong project oversight before reaching closeout.

Managing the Retention Release Timeline

Timing is everything during closeout. Once a Notice of Completion is filed with the county recorder, the clock starts:

• Retention must be released within 35 days of the Notice of Completion filing
• Delays at the county level can impact internal timelines and payment schedules

A key takeaway for agencies is to take control of that timeline rather than relying solely on external processes.

For DSA projects, closeout involves coordination across multiple roles and documentation milestones. The process below illustrates how responsibilities flow from architects and contractors through inspectors and district teams, all leading to final certification.

Best practices include:

• Obtaining a conformed copy of the Notice of Completion with a date stamp
• Personally delivering documents to the recorder’s office when possible
• Tracking critical dates internally using calendar reminders or “tickler systems”
• Avoiding delays caused by routing through multiple offices

These simple steps can prevent late payments, contractor disputes, and compliance issues.

Escrow Agreements: What You Need to Know

Escrow accounts are another area that often creates confusion. Under Public Contract Code 22300, contractors have the right to request substitution of securities in place of retention.

Important considerations include:

• Agencies must include escrow provisions in bid documents
• Contractors can opt into escrow at any point, not just at contract award
• The contractor selects the financial institution and pays associated fees
• The agency retains responsibility for authorizing fund releases

From a financial operations standpoint, this creates a dual-payment structure:

• 95% progress payments go directly to the contractor
• 5% retention is deposited into the escrow account

Strengthening Oversight and Internal Controls

For larger or multi-year projects, escrow accounts require ongoing monitoring. Waiting until project completion to review escrow activity can expose agencies to unnecessary risk.

Recommended practices:

• Review escrow statements monthly or quarterly
• Verify deposits match retention withheld
• Confirm no unauthorized disbursements have occurred
• Establish clear internal ownership between facilities, purchasing, and business services teams

Agencies also shared practical approaches such as creating separate purchase orders for escrow deposits and tracking accounts as unique vendors to maintain transparency.

Leveraging Available Resources

For those looking to strengthen their processes, Leeann highlighted a valuable resource: the California State University system’s capital planning and construction documentation library. While not K-12 specific, it provides comprehensive templates and guidance aligned with public works requirements.

Building a Strong Closeout Process

Effective project closeout is not just about compliance. It is about protecting taxpayer dollars, maintaining contractor relationships, and ensuring projects are completed to standard.

By focusing on:

• Clear understanding of legal requirements
• Proactive timeline management
• Strong financial controls
• Cross-department collaboration

school business officials can approach closeout with confidence and consistency.

Final Takeaway

Closeout is where all the details matter most. With the right systems in place, it becomes less about chasing paperwork and more about executing a well-defined process that safeguards your district and supports long-term operational success.

About the Author

Leeann Errotabere is a former Director of Purchasing with extensive experience in bids, RFPs, and procurement processes. A Past President of CASBO, she has been an active member, presenting conference sessions and contributing to the Business Executive Leadership (BEL) program, and currently serves as a CUPCCAA Commissioner. She represents COLBI, a company dedicated to empowering facilities, fiscal, and business professionals to take control of capital building programs through integrated software, training, and support. COLBI’s solutions streamline coordination between departments, strengthen internal controls, and provide real-time insight into how decisions impact budgets, contracts, and projects, helping districts manage programs of any size with greater efficiency and confidence.