Finding Text
2024-002 Federal Program Compliance – Special Tests – Wage Rate Requirements Federal Agency: U. S. Department of Housing and Urban Development Federal Program Title: Indian Housing Block Grant Program (IHBG) Assistance Listing Number: 14.867 Federal Award Identification Number and Year: 55IH3503180 - 2024 Award Period: 1/1/2024 – 12/31/2024 Significant Deficiency in Internal Control Over Compliance Other Matters Criteria or specific requirement: Davis Bacon (Wage Rate Requirements): 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) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). 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. Condition: One out of five contracts tested did not have the required certified payroll completed. Questioned costs: None Context: Construction files were obtained for five projects receiving federal assistance under this grant. One out of the five items tested did not have the required certified payroll. Cause: Project was an emergency procurement and due to the low dollar amount the certified payroll was not provided. Effect: Failure to comply with federal program requirements surrounding certified payroll requirement for construction contracts that exceed $2,000. Recommendation: We recommend that LHDME reviews all construction contracts to make sure they request certified payrolls for all contracts that exceed $2,000. Views of responsible officials: We agree with this finding. In the future all construction contracts will be reviewed on an monthly basis to determine what contracts total $2,000.00 or over to make sure we have a certified payroll for these contracts.