Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Titles: Public Housing Capital Fund Program
Federal Assistance Listing Numbers: 14.872
Noncompliance – N. Special Tests and Provisions - Wage Rate Requirements
Non Compliance Material to the Financial Statements: No
Significant Deficiency in Internal Control over Compliance for Special Tests and Provisions
Criteria: Wage Rate Requirements. Projects funded with Capital Funds that are developed and/or modernized in accordance with 24 CFR Part 905, Subpart F, including projects that contain only public housing units and mixed finance projects are subject to the Wage Rate Requirements (42 USC 1437J(a)
and (b); 24CFR section 905.308). Davis-Bacon wage rates. For all work or contracts exceeding $2,000 in connection with development activities or modernization activities (except for nonroutine maintenance work, as defined in § 905.200(b)(5) of this part), all laborers and mechanics employed on the construction, alteration, or repair shall be paid not less than the wages prevailing in the locality, as determined by the Secretary of Labor pursuant to the Davis-Bacon Act (40 U.S.C. 3142).
Condition: Based upon inspection of the Authority’s files and on discussion with management, there were projects for which contracts were entered into for which the Authority did not properly document the wage rate requirements.
Context: Based upon the Authority's contract log and discussions with management, there were two (2)
vendors who were awarded contracts for projects utilizing Capital Funds in excess of $2,000. Of a sample size of one (1) contract, the one (1) contracts' documentation did not contain the required wage rate requirements.
Our sample size is statistically valid.
Cause: There is a significant deficiency for the Public Housing Capital Fund program in internal controls over the compliance for the special tests and provisions type of compliance related to wage rate requirements. The Authority has not properly documented the wage rate requirements in compliance with program requirements.
Effect: The Public Housing Capital Fund program is in non-compliance with the special tests and provisions type of compliance related to wage rate requirements.
Recommendation: We recommend the Authority design and implement internal control procedures that will reasonably assure compliance with the Uniform Guidance and the compliance supplement.