Finding 1093785 (2024-003)

Significant Deficiency Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2024-12-31

AI Summary

  • Core Issue: Contracts for construction projects over $2,000 lack the required prevailing wage rate clause, violating the Davis-Bacon Act.
  • Impacted Requirements: Compliance with federal wage regulations is at risk, potentially leading to underpayment of workers.
  • Recommended Follow-Up: Establish internal controls to monitor wages, enforce payroll submissions, and ensure all contracts include the necessary wage clause.

Finding Text

Davis-Bacon Act Wage Compliance • Federal Program: Public and Indian Housing, FALN No. 14.850 and Public Housing Capital Fund, FALN No. 14.872 • Criteria: The Davis-Bacon Act requires that all laborers and mechanics employed by contractors or subcontractors for work on construction contracts more than $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 DOL (40 USC 276a to 276a-7). • Condition: A review of internal controls over monitoring the wage rates for compliance with the Davis Bacon Act revealed that contracts did not include the required prevailing wage rate clause. • Effect: Wage rates may not be in compliance with federal regulations. • Recommendation: Internal controls should be established to collect, review, and monitor wages paid by contractors to its workers as well as ensure all construction contracts greater than $2,000 should include the required prevailing wage rate clause. The Authority should enforce submission of payrolls by withholding funds until the contractor has complied with the certified payroll submission. The Authority should review each payroll to ensure wages are at least the minimum wage rate for the worker’s classification. The Authority should periodically interview construction workers on site to verify the validity of the payroll information. • View of Responsible Officials and Planned Corrective Actions: We were not aware of the requirement to include the required prevailing wage rate clause in every contract greater than $2,000. We will ensure the required clause is included in all construction contracts greater than $2,000.

Categories

Subrecipient Monitoring HUD Housing Programs Internal Control / Segregation of Duties

Other Findings in this Audit

  • 517338 2024-001
    Material Weakness Repeat
  • 517339 2024-002
    Significant Deficiency Repeat
  • 517340 2024-003
    Significant Deficiency Repeat
  • 517341 2024-004
    Significant Deficiency Repeat
  • 517342 2024-001
    Material Weakness Repeat
  • 517343 2024-003
    Significant Deficiency Repeat
  • 517344 2024-004
    Significant Deficiency Repeat
  • 1093780 2024-001
    Material Weakness Repeat
  • 1093781 2024-002
    Significant Deficiency Repeat
  • 1093782 2024-003
    Significant Deficiency Repeat
  • 1093783 2024-004
    Significant Deficiency Repeat
  • 1093784 2024-001
    Material Weakness Repeat
  • 1093786 2024-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $1.06M
14.872 Public Housing Capital Fund $819,446