Audit 372028

2025-001 Waterline Relocation Project SR 0061 Section 14M – Project No. 31221.03 – Highway Planning and Construction 20.205; Year Ended July 31, 2025. Criteria and Condition: Contractors and subcontractors are required to follow labor standards, pay prevailing wages and submit certified payroll records weekly. The Authority failed to put in the contract language to hire a labor compliance officer to monitor the prevailing wages for each certified payroll. Context: Our testing of the certified payroll’s from (May 10 through July 31, 2025) showed incorrect wage rates. Cause: The inaccurate filing of the certified payroll’s was due to using the May 1, 2024 prevailing wage rate instead of the May 1, 2025 rate. The absence of a labor compliance officer to review the certified payrolls contributed to the error. Effect: The project understated its expenditures by $1,056.95 through July 31, 2025. These expenditures were not reported to Pennsylvania Department of Transportation as required. Applicable Laws and Regulations: Title 29, code of federal regulations, Section 5.5(a) states in part: § 5.5 Contract provisions and related matters. (a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses (or any modifications thereof to meet the particular needs of the agency, Provided, That such modifications are first approved by the Department of Labor): (8) Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained Questioned Costs: $1,056.95 Recommendation: We recommended that the Authority hire a labor compliance officer to review all certified payrolls and reimburse all employees of the contractor effected. Views of Responsible Officials and Planned Corrective Actions: Once notified by us the Authority immediately hired the engineering firm as its Labor Compliance officer to review all certified payrolls of the project. The engineer contacted the contractor to remit payment to the employee’s effect by the under reporting of wages.