Audit 356059

2023-003 Special Tests and Provisions – Davis-Bacon Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 1030051; 2021 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Davis-Bacon Act (23 U.S.C. § 113) and Title 29 U.S. Code of Federal Regulations Part 5 require that contractors and subcontractors performing work on federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s wage determination class. Each contractor and subcontractor must, on a weekly basis, provide a copy of the payrolls providing the information listed under payrolls and basic records of Title 29 U.S. Code of Federal Regulations § 5.5 (a)(3)(i) for the preceding weekly payroll period. Condition: Murray County did not obtain all required certified payroll reports for contracts that received federal funding in 2023. Questioned Costs: None. Context: The County did not obtain one of five certified payrolls selected for testing from the two contracts that received federal funding. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5. Cause: Murray County indicated they did not have procedures in place to ensure all weekly summaries were received and reviewed. Recommendation: We recommend County staff obtain and properly review the certified payrolls received from all contractors and subcontractors for compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5 and ensure documentation exists to support monitoring of and compliance with this requirement. View of Responsible Official: Acknowledge

2023-003 Special Tests and Provisions – Davis-Bacon Act Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Transportation Program: 20.205 Highway Planning and Construction Award Number and Year: 1030051; 2021 Pass-Through Agency: Minnesota Department of Transportation Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Davis-Bacon Act (23 U.S.C. § 113) and Title 29 U.S. Code of Federal Regulations Part 5 require that contractors and subcontractors performing work on federal contracts in excess of $2,000 pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits listed in the contract’s wage determination class. Each contractor and subcontractor must, on a weekly basis, provide a copy of the payrolls providing the information listed under payrolls and basic records of Title 29 U.S. Code of Federal Regulations § 5.5 (a)(3)(i) for the preceding weekly payroll period. Condition: Murray County did not obtain all required certified payroll reports for contracts that received federal funding in 2023. Questioned Costs: None. Context: The County did not obtain one of five certified payrolls selected for testing from the two contracts that received federal funding. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The County is not in compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5. Cause: Murray County indicated they did not have procedures in place to ensure all weekly summaries were received and reviewed. Recommendation: We recommend County staff obtain and properly review the certified payrolls received from all contractors and subcontractors for compliance with the Davis-Bacon Act and Title 29 U.S. Code of Federal Regulations Part 5 and ensure documentation exists to support monitoring of and compliance with this requirement. View of Responsible Official: Acknowledge