Finding Text
2025-003 U.S. Department of Health and Human Services, AL No 93.323 Special Tests – Prevailing Wages MATERIAL WEAKNESS Condition: Controls in place did not ensure certified payrolls were being received from the contractor and reviewed by a designated individual overseeing the renovation project at the Health Department, to ensure compliance with prevailing wage requirements. Criteria: The Davis Bacon Act (40 U.S.C. 3141-3144) requires all contractor and subcontractors on federal funded construction projects over $2,000 to pay laborers and mechanics prevailing wages. In addition to including prevailing wage rate clauses in construction contracts, the Health Department is required to monitor contractors by receiving and reviewing weekly certified payrolls to ensure laborers are paid no less than the prevailing wage. Cause: The Health Department lacked a formalized internal control process for tracking the specific requirements related to federally funded construction projects. In addition to fiscal and program staff primarily managing clinical grants and not being sufficiently trained on the specific labor compliance monitoring required for federal construction and renovation projects. Effect: The lack of monitoring could result in contractors underpaying employees or misclassifying labor roles, leading to grant funding suspension or debarment of contractor. Recommendation: Management should implement additional procedures to ensure all required grant requirements are identified and monitored to ensure requirements are met. Grantee’s Response: Management concurs and will continue to evaluate procedures for capturing, reporting and identifying grant activity, including implementing additional oversight and monitoring.