Finding No.: 2025-010 Identification of Federal Program: Federal Agency: U.S. Department of Housing and Urban Development (HUD) AL Program: 14.239 HOME Investment Partnerships (HOME) Program Federal Award No.: M18ST660202, M21ST660202, M22ST660202, M23ST660202 Area: Special Tests and Provisions – Wage Rate Determination Criteria or specific requirement (including statutory, regulatory or other citation): 29 CFR 5.5 states: (a) Required contract clauses. The Agency head will cause or require the contracting officer to require the contracting officer to insert in full, or (for contracts covered by the Federal Acquisition Regulation (48 CFR chapter 1)) by reference, in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the laws referenced by § 5.1, the following clauses (or any modifications thereof to meet the particular needs of the agency, Provided, That such modifications are first approved by the Department of Labor). 29 CFR 5.5(a)(3)(ii) states: (ii) Certified payroll requirements — (A) Frequency and method of submission. The contractor or subcontractor must submit weekly, for each week in which any DBA- or Related Acts-covered work is performed, certified payrolls to the [write in name of appropriate Federal agency] if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the certified payrolls to the applicant, sponsor, owner, or other entity, as the case may be, that maintains such records, for transmission to the [write in name of agency]. The prime contractor is responsible for the submission of all certified payrolls by all subcontractors. A contracting agency or prime contractor may permit or require contractors to submit certified payrolls through an electronic system, as long as the electronic system requires a legally valid electronic signature; the system allows the contractor, the contracting agency, and the Department of Labor to access the certified payrolls upon request for at least 3 years after the work on the prime contract has been completed; and the contracting agency or prime contractor permits other methods of submission in situations where the contractor is unable or limited in its ability to use or access the electronic system. Finding No.: 2025-010, continued Condition: Of the three contractual labor transactions tested, all (100%), totaling $301,011, did not include the required contract clause addressing compliance with the Davis-Bacon and Related Acts, including all applicable rulings and interpretations under 29 CFR Parts 1, 3, and 5. Additionally, for these same contracts, the entity did not enforce the requirement for contractors or subcontractors to submit certified payrolls on a weekly basis for each week in which Davis-Bacon or Related Acts-covered work was performed. Item # Purchase Order Expenditures Questioned Costs 1 241616 $ 99,611 $ 99,611 2 250207 55,400 55,400 3 250994 146,000 146,000 $301,011 $301,011 Cause: Management lacks a formalized process or checklist to ensure that (1) all federally required contract clauses, including those related to Davis-Bacon and Related Acts compliance under 29 CFR Parts 1, 3, and 5, are consistently incorporated into applicable contracts, and (2) contractors and subcontractors are monitored for compliance with certified payroll submission requirements on a weekly basis for all covered work performed. Effect or potential effect: GHURA is in noncompliance for entering into contractual labor without the effect of Compliance with Davis-Bacon and Related Act clauses and obtaining required certified payroll submissions. Questioned costs: $301,011 Identification as a repeat finding: Not applicable. Recommendation: Management should strengthen review and oversight procedures within the A/E Division to ensure all required Federal contract clauses are consistently included in procurements, regardless of dollar threshold, prior to contract execution. This process should include a documented review of the scope of services to identify work of a labor nature and ensure inclusion of applicable Davis-Bacon Act (DBA) provisions where required. Finding No.: 2025-010, continued Views of Responsible Officials: Management partially concurs with the finding. Refer to Management’s position as outlined in the Corrective Action Plan. Conclusion: The finding remains as the condition relates to the support available for review for audit submission that is a draft copy with pending sections without sufficient evidence of effective approval. Management provided response for additional information on June 28, 2026. As we did not have sufficient time to corroborate and examine said additional documentation, our finding remains as there was insufficient evidence to determine compliance at the time of the audit.