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Finding 2022-002 ? Monitoring Controls Related to Compliance with Wage Rate Requirements(Significant Deficiency)Information on the Federal Program: ALN 20. 933 - National Infrastructure Investments ? Special Tests and Provisions Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . ." Federal wage rate requirements included in subchapter IV of chapter 31 of title 40, U.S.C., apply to all projects receiving funds under this program, and apply to all parts of the project. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements, 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 (certified payrolls). The non-Federal entity should also have internal controls in place to ensure that the contractor or subcontractor is submitting payrolls for any week that contract work is performed. Condition: Staff was unable to provide evidence of controls in place to ensure contracts subject to wage rate requirements are appropriately monitored for compliance. There is no evidence of a review performed over certified payroll records and compliance documents performed in fiscal year 2022. Additionally, there is no evidence of communications with contractors available that demonstrate monitoring wage rate requirements. Cause: Metro experienced staffing turnover and was not able to timely complete a review for all contracts subject to wage rate requirements. Additionally, evidence of a review performed and communications with contractors is not retained outside of email, resulting in lost documentation when there is staffing turnover. Effect: The failure to establish an effective internal control system could have enabled noncompliance to go undetected. Questioned Costs: NoneContext: During our documentation and corroboration of internal controls over monitoring of wage rate requirements, there was no evidence of an effective monitoring control. Identification as a repeat finding: No, this is not a repeat finding. Recommendation: We recommend LACMTA assess the timing and frequency of reviews performed over compliance with wage rate requirements to ensure they are occurring at a frequency that establishes an effective internal control. Additionally, we recommend that documentation of monitoring related communications be retained in accordance with LACMTA?s retention policy. Views of responsible officials and planned corrective actions: We concur with the recommendation and add that the Labor Wage & Retention Programs (LWRP) currently has the required controls to ensure that the certified payrolls are reviewed in a timely manner and reviews are formally documented and evidence of the reviews are retained in accordance with LACMTA?s retention policy. The staff turnover issue that LWRP experienced has been addressed.