Finding 524599 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-02-27

AI Summary

  • Core Issue: EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY did not include Davis-Bacon Act wage requirements in the prime contract, leading to some subcontractor employees being underpaid.
  • Impacted Requirements: The Davis-Bacon Act mandates that all laborers on federally funded projects receive prevailing wage rates, which were not communicated to the prime contractor.
  • Recommended Follow-Up: Obtain a contract amendment to address wage compliance and review all current contracts to ensure no further omissions exist.

Finding Text

Non-Compliance with Davis-Bacon Act Prevailing Wage Requirements CONDITION: During the audit of EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY (MAPLEWOOD), INC. for the year ended March 31, 2024 it was noted that prevailing wage requirements mandated by the Davis-Bacon Act were not included in the prime contract for the construction project. As a result, we noted minor instances where certain employees of subcontractors were not paid the required prevailing wage rates. CRITERIA: The Davis-Bacon Act requires that all laborers and mechanics employed on projects financed by federal funds be paid at prevailing wage rates established by the U.S. Department of Labor. These wage rates must be included in the contracts with subcontractors. CAUSE: The deficiency was caused by the failure to recognize Davis-Bacon Act requirements in the USDA Grant Agreement and failure to properly communicate the requirements to the prime contractor. EFFECT: By failing to recognize and properly communicate prevailing wage requirements to the prime contractor, certain subcontractor employees were compensated below the federally mandated wage rates, resulting in non-compliance with federal regulations. RECOMMENDATION: It is recommended that EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY (MAPLEWOOD), INC. obtains a contract amendment for the contract in question and work with the prime contractor to ensure that employees of sub-contractors are properly compensated. Additionally, a review of current contracts should be conducted to identify and rectify any further omissions.

Corrective Action Plan

U.S. Department of Agriculture Eastern West Virginia Community Action Agency (Maplewood), Inc. respectfully submits the following corrective action plan for the year ended March 31, 2024. Name and address of independent public accounting firm: J. Davis, CPA-AC, P.O. Box 30, Inwood, WV 25428 Audit period: April 1, 2023 – March 31, 2024 The findings from the March 31, 2024 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Federal Award Findings FINDING 2024-001 – Non-Compliance with Davis-Bacon Act Prevailing Wage Requirements RECOMMENDATION: It is recommended that EASTERN WEST VIRGINIA COMMUNITY ACTION AGENCY (MAPLEWOOD), INC. obtains a contact amendment for the contract in question and work with the prime contractor to ensure that employees of sub-contractors are properly compensated. Additionally, a review of current contracts should be conducted to identify and rectify any further omissions. Immediate Corrective Actions: 1. Contract Amendment: We will obtain a contract amendment to incorporate the prevailing wage requirements mandated by the Davis-Bacon Act. 2. Communication with Prime Contractor: We will work closely with the prime contractor to ensure that all subcontractor employees are properly compensated according to the prevailing wage rates. Long-Term Preventive Actions: 1. Review of Contracts: We will conduct a thorough review of all current contracts to identify and rectify any further omissions concerning the Davis-Bacon Act requirements. 2. Training and Awareness: We will implement a training program for our staff to ensure awareness and understanding of federal prevailing wage requirements. Additionally, we will enhance communication protocols with prime contractors to prevent future occurrences. Person(s) Responsible:  Responsible Party: Matthew Hinkle will oversee the implementation and monitoring of the corrective and preventive actions. Sincerely, MATTHEW J HINKLE (S)

Categories

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Other Findings in this Audit

  • 1101041 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.405 Farm Labor Housing Loans and Grants $3.93M