Finding Text
Non-Compliance with Davis-Bacon Act Prevailing Wage Requirements
CONDITION:
During the audit of EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY (MAPLEWOOD), INC. for the year ended March 31, 2024 it was noted that prevailing wage requirements mandated by the Davis-Bacon Act were not included in the prime contract for the construction project. As a result, we noted minor instances where certain employees of subcontractors were not paid the required prevailing wage rates.
CRITERIA:
The Davis-Bacon Act requires that all laborers and mechanics employed on projects financed by federal funds be paid at prevailing wage rates established by the U.S. Department of Labor. These wage rates must be included in the contracts with subcontractors.
CAUSE:
The deficiency was caused by the failure to recognize Davis-Bacon Act requirements in the USDA Grant Agreement and failure to properly communicate the requirements to the prime contractor.
EFFECT:
By failing to recognize and properly communicate prevailing wage requirements to the prime contractor, certain subcontractor employees were compensated below the federally mandated wage rates, resulting in non-compliance with federal regulations.
RECOMMENDATION:
It is recommended that EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY (MAPLEWOOD), INC. obtains a contract amendment for the contract in question and work with the prime contractor to ensure that employees of sub-contractors are properly compensated. Additionally, a review of current contracts should be conducted to identify and rectify any further omissions.