Finding Text
2025-008 ALN 14.872 – Public Housing Operating Fund Program – Special Tests and Provisions – Wage Rate Requirements Condition and Criteria: The Authority, under prior management, was not able to provide necessary documentation such as the weekly certified payroll reports and employee interviews as required by the Department of Labor’s Davis-Bacon Act. The Davis-Bacon Act requires a contractor whose contract is over $2,000 to provide weekly certified payrolls to prove that they are paying prevailing wage rates. Amount of Questioned Costs: None. Context: Under prior management, as a result of the determination that the internal controls over Dave-Bacon wage rate requirements were likely to be ineffective, and due to the fact that the Authority explained that they could not locate any weekly certified payrolls or interviews for our audit, no tests of noncompliance were performed. Cause: Under prior management, no procedure existed for projects to follow up on stipulations within the contract requiring contractors to submit weekly wage reports, nor does a procedure exist whereby the Authority interviews contracted employees to ensure they are being paid fairly. Effect or Potential Effect: Under prior management, the Authority did not have proper controls in place to ensure compliance with the Department of Labor’s Davis-Bacon Act. As a result, contractors could be underpaying works while working on Authority projects. Auditor’s Recommendation: We recommend that the Authority implement procedures to follow up on the obligations of contractors to produce weekly wage reports and compare them with prevailing wage rates. Also, make physical inspections and interview employees to ascertain that information is accurate. Grantee Response: Management acknowledges the finding and will follow the auditor’s recommendation.