Finding Text
Capital Fund Program-CDFA# 14.872 Finding 2025-001-Davis Bacon Act and Monitoring Notes-Special Tests Criteria and Condition Federal regulations require that the authority monitor contractor payrolls to make sure that Davis Bacon Act rules were complied with. These deal with contractors paying employees at least the listed federal wage rate per classification, such as electrical, plumber, etc. In addition, federal regulations require that the authority generate written data that supports their review of ongoing rehabilitation work and/or capital improvements. These notes place the authority in a better position if an argument arises about the quality of the job, or the late or non-performance. Context The authority had multiple small rehab jobs during the year. Many of these likely only required one person, the owner, and perhaps a family member, to perform the job. In these instances, Davis Bacon does not apply. However, likely some of the jobs also required common law employees used by the contractor. Without the contractor payrolls, the authority is not able to know when Davis Bacon applied, and to review the compliance when there were employees. Likely the authority adequately monitored the ongoing rehab work. The Executive Director asserts this. However, federal regulations require written monitoring notes. There is no specific form or quality for the notes. But they must be of sufficient quality that a third party will think the documentation is reasonable. We note that in a job that was bid out during the audit year but work did not commence until after audit year end, an architect was used. The authority has copies of the architect’s field reports. Cause Apparent oversight. Effect Controls for proper rehabilitation expenditures were not as good as they should have been. Questioned Costs None Recommendation Authority personnel should check contractor payrolls for Davis Bacon compliance. Written monitoring notes should be prepared and available for third party review. Views of Responsible Officials and Planned Corrective Action I am Debra Sarpy, Executive Director and designated person to answer this finding. We will comply with the auditors’ recommendation.