Finding Text
Davis-Bacon Act Wage Compliance • Federal Program: Public and Indian Housing, FALN No. 14.850. • 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. • Cause: Weakness in internal controls over tenant’s annual certifications relating to proper documentation and calculation of rent. • Identification as a repeat finding: This is a repeat finding (See 2024-003). • 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.