Audit 331853

Assistance Listing Number, Federal Agency, and Program Name - 20.106 Federal Aviation Administration Airport Improvement Program Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes Criteria - 29 CFR Sections 5.5 and 5.6 establish certain requirements for wage rate requirements. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The Airports are responsible for monitoring compliance by any third-party contractor to ensure compliance requirements are being met. Condition - During the prior year audit, it was determined that there is no control function in place by the Airports' staff to ensure that wage rate compliance with weekly certified payrolls is occurring. The Airports implemented a control effective February 2024; however, no control was in place from July 2023 through January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Airports have hired a third-party consultant to perform compliance work regarding obtaining weekly certified payrolls from contractors and subcontractors, as required under the wage rate requirements. The third party has access to upload the certified payrolls to a shared folder with the Airports. The Airports do not have internal controls to monitor or review the work of the third-party consultant. Without this review, the Airports may not be able to detect if noncompliance by the contractors or subcontractors has occurred. During our testing, we did not note any noncompliance matters related to the wages that were paid for a sample of expenditures that were tested. Cause and Effect - Due to the Airports' lack of monitoring or review for seven months of the year under audit of the certified payrolls obtained by the third party consultant, they did not maintain the proper internal controls to ensure compliance with the wage rate requirement. Recommendation - Internal controls should be implemented and formalized to ensure proper monitoring and reviews of the information provided by the third party are occurring in regard to wage rate requirements. Views of Responsible Officials and Corrective Action Plan - Certified payroll registers that are uploaded in the Airports' web-based databases will be checked monthly by HDOT staff to detect and correct matters related to wage rate requirements. Noncompliance notices will be issued to the third-party consultants when missing information or errors are identified. This has been implemented effective February 2024.

Assistance Listing Number, Federal Agency, and Program Name - 20.106 Federal Aviation Administration Airport Improvement Program Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes Criteria - 29 CFR Sections 5.5 and 5.6 establish certain requirements for wage rate requirements. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The Airports are responsible for monitoring compliance by any third-party contractor to ensure compliance requirements are being met. Condition - During the prior year audit, it was determined that there is no control function in place by the Airports' staff to ensure that wage rate compliance with weekly certified payrolls is occurring. The Airports implemented a control effective February 2024; however, no control was in place from July 2023 through January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Airports have hired a third-party consultant to perform compliance work regarding obtaining weekly certified payrolls from contractors and subcontractors, as required under the wage rate requirements. The third party has access to upload the certified payrolls to a shared folder with the Airports. The Airports do not have internal controls to monitor or review the work of the third-party consultant. Without this review, the Airports may not be able to detect if noncompliance by the contractors or subcontractors has occurred. During our testing, we did not note any noncompliance matters related to the wages that were paid for a sample of expenditures that were tested. Cause and Effect - Due to the Airports' lack of monitoring or review for seven months of the year under audit of the certified payrolls obtained by the third party consultant, they did not maintain the proper internal controls to ensure compliance with the wage rate requirement. Recommendation - Internal controls should be implemented and formalized to ensure proper monitoring and reviews of the information provided by the third party are occurring in regard to wage rate requirements. Views of Responsible Officials and Corrective Action Plan - Certified payroll registers that are uploaded in the Airports' web-based databases will be checked monthly by HDOT staff to detect and correct matters related to wage rate requirements. Noncompliance notices will be issued to the third-party consultants when missing information or errors are identified. This has been implemented effective February 2024.

Assistance Listing Number, Federal Agency, and Program Name - 20.106 Federal Aviation Administration Airport Improvement Program Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes Criteria - 29 CFR Sections 5.5 and 5.6 establish certain requirements for wage rate requirements. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The Airports are responsible for monitoring compliance by any third-party contractor to ensure compliance requirements are being met. Condition - During the prior year audit, it was determined that there is no control function in place by the Airports' staff to ensure that wage rate compliance with weekly certified payrolls is occurring. The Airports implemented a control effective February 2024; however, no control was in place from July 2023 through January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Airports have hired a third-party consultant to perform compliance work regarding obtaining weekly certified payrolls from contractors and subcontractors, as required under the wage rate requirements. The third party has access to upload the certified payrolls to a shared folder with the Airports. The Airports do not have internal controls to monitor or review the work of the third-party consultant. Without this review, the Airports may not be able to detect if noncompliance by the contractors or subcontractors has occurred. During our testing, we did not note any noncompliance matters related to the wages that were paid for a sample of expenditures that were tested. Cause and Effect - Due to the Airports' lack of monitoring or review for seven months of the year under audit of the certified payrolls obtained by the third party consultant, they did not maintain the proper internal controls to ensure compliance with the wage rate requirement. Recommendation - Internal controls should be implemented and formalized to ensure proper monitoring and reviews of the information provided by the third party are occurring in regard to wage rate requirements. Views of Responsible Officials and Corrective Action Plan - Certified payroll registers that are uploaded in the Airports' web-based databases will be checked monthly by HDOT staff to detect and correct matters related to wage rate requirements. Noncompliance notices will be issued to the third-party consultants when missing information or errors are identified. This has been implemented effective February 2024.

Assistance Listing Number, Federal Agency, and Program Name - 20.106 Federal Aviation Administration Airport Improvement Program Federal Award Identification Number and Year - N/A Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes Criteria - 29 CFR Sections 5.5 and 5.6 establish certain requirements for wage rate requirements. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls). The Airports are responsible for monitoring compliance by any third-party contractor to ensure compliance requirements are being met. Condition - During the prior year audit, it was determined that there is no control function in place by the Airports' staff to ensure that wage rate compliance with weekly certified payrolls is occurring. The Airports implemented a control effective February 2024; however, no control was in place from July 2023 through January 2024. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The Airports have hired a third-party consultant to perform compliance work regarding obtaining weekly certified payrolls from contractors and subcontractors, as required under the wage rate requirements. The third party has access to upload the certified payrolls to a shared folder with the Airports. The Airports do not have internal controls to monitor or review the work of the third-party consultant. Without this review, the Airports may not be able to detect if noncompliance by the contractors or subcontractors has occurred. During our testing, we did not note any noncompliance matters related to the wages that were paid for a sample of expenditures that were tested. Cause and Effect - Due to the Airports' lack of monitoring or review for seven months of the year under audit of the certified payrolls obtained by the third party consultant, they did not maintain the proper internal controls to ensure compliance with the wage rate requirement. Recommendation - Internal controls should be implemented and formalized to ensure proper monitoring and reviews of the information provided by the third party are occurring in regard to wage rate requirements. Views of Responsible Officials and Corrective Action Plan - Certified payroll registers that are uploaded in the Airports' web-based databases will be checked monthly by HDOT staff to detect and correct matters related to wage rate requirements. Noncompliance notices will be issued to the third-party consultants when missing information or errors are identified. This has been implemented effective February 2024.