Finding Text
Finding 2023-III-005 – Federal Special Tests and Provisions – CDBG Wage Rate Requirements
Type of Finding – Significant Deficiency
Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL).
Condition/Cause: The City was unable to provide documentation that a provision for compliance with DOL Wage Rate Requirements was included in the CDBG construction contract. 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 City was unable to provide documentation that certified payrolls were submitted as required.
Recommendation: We recommend that the City reviews their grant management and procurement policies and procedures to ensure that Federal Wage Rate requirements are included in all construction contracts in excess of $2,000 financed by federal assistance. We also recommend that the City adopts policies and procedures to ensure that contractors and subcontractors comply with wage rate requirements.
Response: City staff will review their grant management and procurement policies and procedures to ensure that Federal Wage Rate requirements are included in all eligible construction contracts and procedures to monitor that contractors and subcontractors comply with wage rate requirements.