Finding Text
2023-007 ALN 14.872 – Public Housing Capital Funds Program – 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 Capital Fund Program 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:
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:
Current management acknowledges the finding and will follow the auditor’s recommendation.