Finding Text
U.S. Department of Housing and Urban Development
Federal Program Name: Home Investment Partnerships Program
Assistance Listing Number 14.239
Significant Deficiency and Non-Material Non-Compliance – Special Tests – Wage Rate Requirements
Finding 2024-001
Criteria: In accordance with Section 200.303 of the Uniform Guidance, a non-federal entity must 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. The non-federal entity is also required to notify contractors and subcontractors of the requirements to comply with the Wage Rate Requirements and obtain copies of certified payrolls.
Condition: For one construction contractor selected for testing, it was discovered through audit procedures that the City was not collecting the weekly certified payroll forms for two active projects to ensure they were being completed and in compliance with federal wage rate requirements. However, the City was obtaining certifications that the pay amounts charged were correct via the pay request applications being submitted by the contractor to the City.
Context: We selected one construction contractor to test that weekly certified payrolls were being completed and maintained by the City on active projects the contractor was working on.
Questioned Costs: No questioned costs reported.Effect: The City would be unable to identify when contractors did not comply with the wage rate requirements.
Cause: The City's Housing and Neighborhoods department did not request from contractors and subcontractors working on the grant for the weekly certified payrolls as required.
Recommendation: We recommend management collect the weekly certified payrolls from construction contractors actively working on projects funded by the grant and verify that the amounts reported are correct.
Views of Responsible Officials: Management agrees with the finding and is implementing procedures to correct this, which is further discussed in the corrective action plan.