Finding Text
Non-compliance with the Davis-Bacon Act (Material Weakness, Material Non-Compliance)
Capital Fund Program – Assistance Listing No. 14.872; Grant Period - Fiscal Year-Ended September 30, 2023
Criteria
The Davis-Bacon Act applies to contractors and subcontractors performing on federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Title 29 of the Code of Federal Regulations, Subtitle A, Part 5, Subpart A describes the Davis-Bacon Act and includes a requirement that applicable agencies shall include in their contracts a provision that the contractor or subcontractor comply with those requirements of the Department of Labor regulations (the Davis-Bacon Act). 29 CFR, Subtitle A, Part 5, Subpart A 5.5-A.3 Payrolls and Basic Records includes a requirement for the contractor or subcontractor to submit to the non-federal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls).
Condition and Perspective
During audit fieldwork, auditors sampled two contactor files for compliance with the Davis Bacon Act. The Authority was unable to provide certified payrolls for one of the two contractors which were required to submit certified payrolls for each week work was performed. $481,610 was expended under the contract during the fiscal year. Additionally, the Prevailing Wage Rate Clause was not included in the applicable contract.
Questioned Costs - None
Cause
Lack of knowledge of the Davis-Bacon Act requirements among applicable personnel administering contract award and contract oversight.
Effect
Non-compliance with the Davis-Bacon Act.
Recommendation
We recommend that the Authority attain weekly certified payrolls from contractors as applicable for all federally funded contracts subject to the Davis-Bacon Act.
Management’s Response
The Authority will attain weekly certified payrolls from contractors as applicable for all federally funded contracts subject to the Davis-Bacon Act. The Authority’s Executive Director, Erial Branch, has assumed the responsibility of executing this corrective action as of August 1, 2024.