Finding 516537 (2024-003)

Finding 2024-003: Prevailing Wage Rates Capital Funds – 14.872 Material Weakness/Noncompliance – Special Tests and Provisions Criteria: Projects funded with Capital Funds that are developed and/or modernized in accordance with 24 CFR Part 905, Subpart F, including projects that contain only public housing units and mixed-finance projects are subject to the Wage Rate Requirements (42 USC 1437j(a) and (b); 24 CFR section 905.308). Condition: They Authority had Capital Fund grant expenditures during the fiscal year related to four different contractors. For two of those, the Authority did not require prevailing wage rates and therefore did not monitor for them. The other two had the clauses in the contract but the Authority was unable to provide any documentation to support the clause was monitored. Cause: The Authority did not have procedures in place to determine when prevailing wages rates were required and further did not monitor to ensure they were complied with when they did require them. Effect or Potential Effect: The Authority did not comply with the prevailing wage rate requirements. Recommendation: The Authority should review the prevailing wage rate requirements so it can determine when they apply for future projects. The Authority should establish a documented monitoring system to show it complied with the prevailing wage rate requirements. View of the Responsible Officials of the Auditee: The auditee's management agrees with the finding.