Finding ref number: 2024-001 Finding caption: The City did not have adequate internal controls and did not comply with federal wage-rate requirements. Name, address, and telephone of City’s contact person: Josh DeLay 271 9th St NE East Wenatchee, WA 98802 (509) 886-4507 Corrective action the auditee...
Finding ref number: 2024-001 Finding caption: The City did not have adequate internal controls and did not comply with federal wage-rate requirements. Name, address, and telephone of City’s contact person: Josh DeLay 271 9th St NE East Wenatchee, WA 98802 (509) 886-4507 Corrective action the auditee plans to take in response to the finding: (If the auditee does not concur with the finding, the auditee must list the reasons for disagreement). All the projects audited this period are still in progress and have not been closed out or accepted by the City. As a result, the final project files were not available, leading to the audit evaluating “working” files. Auditing these files with the expectation that they would be in a finalized state is both misrepresenting the City’s standard of care for accepted projects and created an added financial burden to provide support from working files. The City would like it noted the audit did not find any payments to have been processed that did not include payment of prevailing wage. Additionally, as stated above, these projects are all still in progress and will not be fully closed out until all certified payrolls are received. In a theoretical case where there was an instance of a contractor not paying prevailing wage on one of these projects, the City would address it prior to closeout, which would ensure it is not liable for paying additional wages. The City hires consultants to administer these projects in accordance with all relevant statutes and best practices. The City also provided the SAO with emails showing the City’s consultants requesting overdue certified payrolls as a part of the pay estimate preparation process. To mitigate any risk that may exist in the City’s current process the City will develop a cover sheet to accompany pay estimates on federally funded projects that will require the consultant to certify that certified payrolls from all contractors are up to date, tracks how far overdue any non-submitted certified payrolls are, and ensure the City verifies certified payrolls in a timely manner. The City will also look further into the applicable statutes to determine whether it needs to establish a policy outlining when to withhold payment from a contractor due to outstanding certified payrolls. The City does not believe that an audit finding is necessary on this issue. These certified payrolls will be collected prior to the projects being accepted, ensuring that any noncompliance from contractors are not the financial responsibility of the City. As outlined above, the City acknowledges that there are areas that it could improve its process and will implement policies and systems to continue delivering the best possible projects for taxpayers. Anticipated date to complete the corrective action: Immediately, where necessary