Finding Text
2023-001 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 report 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 Davis-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:
No procedure exists 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:
The Authority does not have proper controls in place to ensure compliance with the Department of Labor’s Davis-Bacon Act. As a result, contractors could be underpaid while working on Authority projects.
Auditor’s Recommendation:
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 the information is accurate.
Grantee Response:
Current management acknowledges the finding and will follow the auditor’s recommendation.