1. Verify authority by jurisdiction and program

What is missing until this gate is complete: the actual jurisdiction or program, the written qualification or approval source, the allowed inspection scope, the official workflow, and the party that accepts the report. A related credential or an approval in one program cannot fill those fields for another assignment.

TDLR defines a third party inspector for its Industrialized Housing and Buildings program as an approved person or agency evaluated for facilities, personnel, experience, reliability, and independence of judgment. The same page points to Form IHB-LIC-055 for an agency, Form IHB105 for an inspector, and application checklists 010ihb and 011ihb. That evidence is specific to the IHB program. Review the TDLR Third Party Inspector Information Packet before using any IHB statement.

Assignment authority worksheet

1. Name the city, county, state program, owner program, or other accepting authority. Record the official URL and check date.
2. Describe the exact work: plan review, site observation, in-plant inspection, installation phase, reinspection, final acceptance, or another defined service.
3. Record each required person or agency qualification, registration, appointment, contract approval, and current status. Use Needs confirmation when the official source does not answer.
4. List the required forms, notice or scheduling path, report format, violation handling, correction path, and final recipient.
5. Ask the responsible authority in writing who may inspect, what is accepted, and which procedure controls this exact assignment. Keep the question unsent in the learning file. A real inquiry belongs outside this page and under an authorized business process.

2. Separate books, job profit, and cash

What is missing until this gate is complete: a transaction record, supporting documents, accounts receivable, accounts payable, job-level results, and a dated rolling cash forecast. A profitable job can still create a cash shortage when billing and payment dates do not line up.

The IRS says a business recordkeeping system should summarize transactions and clearly show income and expenses. It also identifies invoices, receipts, deposit records, bills, statements, and proof of payment as supporting documents. See What kind of records should I keep.

Weekly finance control

• Transaction layer: assign a transaction date, customer or vendor, contract or job ID, account, amount, document link, and review status.
• Receivables: list issued invoices, due dates, disputed amounts, expected collection dates, and the owner of the next follow-up.
• Payables: list approved obligations, due dates, payment status, and any missing invoice or approval.
• Job result: compare recognized job revenue with labor and other costs using one documented method. Keep estimates separate from posted transactions.
• Rolling cash view: begin with available cash, add dated expected receipts, subtract dated expected payments, and show the projected ending balance for each review period.
• Reconciliation: compare the books, bank activity, invoice register, payable register, and forecast. Record variances without changing source records silently.

Questions for a CPA or bookkeeper

• Which accounting method and chart of accounts fit the entity and its reporting duties?
• When should inspection revenue, deposits, retainage, reimbursable costs, and uncollectible amounts be recorded?
• Which job-cost categories and document-retention periods should the firm use?

3. Map entity, tax accounts, and annual reports

What is missing until this gate is complete: the legal entity name and type, formation evidence, account identifiers, responsible agencies, applicable reports, due dates, filing owner, and proof of acceptance. A company label alone does not determine every tax duty.

The Texas Secretary of State explains that a corporation or LLC is created by filing a certificate of formation and advises owners to choose structure with legal and tax professionals. See Selecting a Business Structure.

The Texas Comptroller says each taxable entity formed in Texas or doing business in Texas is subject to the franchise tax system. Its overview states that entities at or below the no-tax-due threshold no longer file a Franchise Tax Report for reports due in 2024 and later, but they continue to file an information report each year. The page lists May 15 as the regular annual due date, subject to the next-business-day rule. Confirm the current requirements on the Franchise Tax Overview before each filing cycle.

Annual obligation register

• Record legal name, entity type, formation jurisdiction, registered agent record owner, and Secretary of State evidence.
• Record Comptroller account status, the information report that applies, whether a Franchise Tax Report applies, the due date, extension status, preparer, reviewer, submission evidence, and acceptance evidence.
• Add federal, local, payroll, and other accounts only after the responsible agency or adviser confirms they apply.
• Set an internal review date before each official deadline. Keep a source link and last-checked date beside every calendar item.

Questions for a CPA or attorney

• Which entity and tax classifications apply to this business and its owners?
• Which Texas reports remain required when no Franchise Tax Report is due?
• Which changes in ownership, address, operations, or nexus trigger a new review?

4. Classify sales tax treatment contract by contract

What is missing until this gate is complete: the actual customer, work location, service and deliverable, physical-work component, contract form, separately stated charges, cited tax category, decision owner, and invoice treatment. Do not copy a construction tax rule onto an inspection contract just because both touch a building.

The Texas Comptroller publishes a defined list of taxable service categories. Its page places inspection in a specific insurance-services context and separately lists defined real property services. That structure is a reason to classify the actual service instead of treating the word inspection as a universal answer. Review Taxable Services and the linked rule or publication that matches the real contract.

Contract tax issue sheet

1. Copy the proposed scope and each separately stated deliverable into the issue sheet.
2. Mark whether the firm only observes and reports or also performs design, repair, installation, testing, monitoring, consulting, or another service.
3. Identify the official Comptroller category, rule, or publication that might apply. If none is verified, mark the treatment Unresolved.
4. Have the CPA or Comptroller contact owner document the conclusion, assumptions, effective date, and invoice setup. This learning page does not make that conclusion.
5. Reopen the issue sheet when the scope, customer, property type, bundle, contract language, or official guidance changes.

Questions for the reviewer

• Which exact taxable-service category or exemption applies to each line item?
• Does bundled work change the result, and what must the invoice show?
• Which permit, account, certificate, record, and retention rule applies to the confirmed treatment?

5. Control payroll, TWC reporting, hires, classification, and separation

What is missing until this gate is complete: a worker-status decision, payroll calendar, TWC account owner, wage and tax report evidence, new-hire record, personnel-status history, separation record, and protected record location. General staff-development content does not replace employer compliance records.

The Texas Workforce Commission employer guide states that each employing unit should have its own unemployment tax account and report the wages of its employees to TWC. TWC’s new-hire guidance says employers report required new-hire information within 20 days of the first day of work. Use the current Texas Guidebook for Employers and New Hire Reporting Requirements as starting points, then confirm the real worker and account with the responsible agencies or adviser.

Employer control register

• Classification: record the facts, source, reviewer, decision date, and next review for employee, contractor, owner, or another status. Do not select a label only to avoid payroll duties.
• Payroll: record pay period, time approval, gross pay inputs, deductions and additions, payment evidence, wage report status, tax deposit status, reviewer, and correction history.
• Hire: use a role-based checklist for authorization, tax forms, required notices, new-hire reporting, policy acknowledgements, access, equipment, training, and first-day status.
• Status change: date every change in role, pay, schedule, leave, coverage, access, and supervisor approval.
• Separation: preserve the reason source, last-work date, final-pay review, property return, access removal, benefit or coverage notices, TWC response owner, and retention owner.
• Privacy: keep real payroll and personnel data outside the learning file. Use fictional or fully redacted examples here.

6. Match professional, general, and employer risks to reviewed coverage

What is missing until this gate is complete: a risk description, requested coverage, policy form and period, named insured, services description, exclusions, endorsements, limits, deductible, reporting trigger, certificate or policy evidence, contract requirements, and licensed reviewer. One certificate or one policy label cannot answer every risk.

TDI describes professional liability, also called errors and omissions, as coverage for claims arising from professional services. Its guidance distinguishes that coverage from commercial general liability, which addresses categories such as bodily injury and property damage. See Professional Liability FAQ.

TDI also states that CGL is not intended to provide workers’ compensation or employer’s liability coverage. Its workers’ compensation page says most private Texas employers may choose whether to carry workers’ compensation, while employers without coverage have notice duties and some situations have different requirements. Review Commercial General Liability Insurance and Workers’ Compensation Coverage Verification.

Risk-to-policy review

• List possible claims from a professional error or omission, bodily injury, property damage, employee injury, vehicle use, data handling, subcontracted work, and contractually assumed responsibility.
• For each risk, ask the licensed agent which policy, endorsement, exclusion, condition, reporting trigger, and evidence applies. Record Not confirmed until the answer is supported.
• Compare the exact inspection and report services in the proposal with the services described to the insurer.
• Compare contract indemnity, additional-insured, waiver, primary, notice, and completed-work language with the actual policies. Route legal meaning to counsel and coverage meaning to the agent or carrier.
• Record renewal, cancellation, claims-reporting, certificate, subcontractor, and client-proof owners and dates.

7. Review bids, scope, changes, risk, payment, and records as one system

What is missing until this gate is complete: a bid decision, defined scope and exclusions, acceptance criteria, responsibilities, written change path, indemnity and insurance review, payment evidence, issue route, termination terms, and record-retention owner. Price, evidence, and liability cannot be reviewed in separate files and then assumed to match.

The Texas Comptroller’s State of Texas Procurement and Contract Management Guide is written for state procurement. It offers a useful public control model, including written change approval, analysis of effects on scope, schedule, cost, work in progress, and acceptance criteria, plus documentation of approved or rejected changes. It is not a universal rule for every private contract. See the State of Texas Procurement and Contract Management Guide.

TDI notes that CGL treatment of assumed liability depends on policy and indemnity wording. Contract meaning belongs with counsel, and coverage meaning belongs with the authorized insurance reviewer.

Bid and contract control sheet

• Bid gate: customer and site identity, solicitation version, questions, assumptions, required qualifications, staffing, schedule, deliverables, acceptance, insurance, conflicts, and go or no-go owner.
• Scope gate: included and excluded work, governing jurisdiction or program, standards source, reliance information, site access, records supplied by others, report audience, correction, reinspection, and appeal or dispute path.
• Risk gate: standard of care, warranty language, indemnity, defense, damages, liability limits, confidentiality, records, public disclosure, intellectual property, subcontracting, and insurance alignment. Route all conclusions to counsel and the insurance reviewer.
• Change gate: one change ID, requestor, reason, before and after scope, schedule effect, payment effect, risk effect, approval owner, written approval, and implementation date. Do not rely on verbal scope changes.
• Payment gate: invoice trigger, required support, accepting party, disputed-item process, payment status, and accounts-receivable owner.
• Closeout gate: accepted deliverables, open corrections, final invoice, claim or dispute hold, retention schedule, secure archive, and destruction owner.

8. Record conflicts and protect independent judgment

What is missing until this gate is complete: a disclosure of financial, ownership, referral, design, construction, vendor, family, prior-work, gift, or decision-pressure relationships; a named reviewer; a written disposition; safeguards; reassignment or decline; and a retained decision record. A verbal claim of impartiality is not a review trail.

The ICC Code of Ethics tells people participating in ICC activities to act ethically, avoid conflicts of interest, and demonstrate integrity, honesty, and fairness. The TDLR IHB program separately uses independence of judgment as one factor in approving third party inspectors or agencies. Apply each source only within its own scope. See the ICC Code of Ethics and the TDLR IHB packet.

Conflict decision log

1. Identify the assignment, parties, decision, person making the disclosure, relationship, date, and evidence source.
2. Ask whether the relationship could affect, or appear to affect, inspection scope, observations, findings, correction review, acceptance, report distribution, or payment.
3. Route the record to the authority, program, employer, client, or policy owner responsible for the decision. Do not let the affected person clear the issue alone.
4. Record one disposition: no conflict under the cited policy, disclose with named safeguards, limit the scope, add independent review, reassign, or decline. A real disposition requires the responsible reviewer.
5. Link the decision to the contract, assignment, report, and any later change. Reopen it when parties, ownership, scope, compensation, or relationships change.