FAC Explorer

Finding 59857 (2022-001)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-23
Audit: 55529
Organization: City of Fort Worth (TX)
Auditor: Forvis LLP

AI Summary

  • Core Issue: The City failed to obtain required certified payrolls from contractors, risking non-compliance with federal wage rate requirements for construction projects.
  • Impacted Requirements: Compliance with the Davis-Bacon Act and related federal regulations, which mandate that laborers are paid prevailing wages and that certified payrolls are submitted weekly.
  • Recommended Follow-Up: Implement internal controls to monitor construction contracts, ensure weekly certified payrolls are tracked, and verify proper certification for all contractor work.

Finding Text

Finding: Special Tests - Wage Rate Requirements Federal Program: Airport Improvement Program Assistance Listing Number: 20.106 Federal Agency: U.S. Department of Transportation Pass-Through Entity: Not Applicable Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by Federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141?3144, 3146, and 3147). Non-Federal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This 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). (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). In addition, according to 2 CFR Part 200.303, the 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. Condition: The City did not obtain all of the required certified payrolls for contractor or subcontractor work performed during the fiscal year ended September 30, 2022. In addition, the City did not have internal controls in place to identify that these certified payrolls were not being obtained. Questioned Costs: Unknown Context: The City did not obtain any certified payrolls for contractor or subcontractor work performed from one of the two construction contractors used for the projects for this program. This one contractor accounted for 94 percent of the construction expenditures during fiscal year 2022. Effect: Certified payrolls were not obtained or reviewed for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Cause: The City did not ensure that all required certified payrolls were being obtained. There was no one person or group assigned to monitor, review, and obtain certified payrolls during the year from contractors and subcontractors. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that the City design and implement internal controls to ensure compliance with the program?s wage rates requirements. These controls should include monitoring construction contracts, tracking weekly certified payrolls or notification of no work performed, and reviewing to ensure that the payrolls are properly certified for all contractor and subcontractor work performed. Views of Responsible Officials: See Corrective Action Plan

Corrective Action Plan

Concur: Departments are responsible for the operational compliance of their grant awards. The Aviation Department is in the process of reclassifying a position to a contract compliance specialist which will help ensure future compliance. Financial Management Services (FMS) will establish a process to assist departments in meeting compliance requirements. A contract review checklist will be implemented by FMS to assist with the identification of all compliance requirements for each award. FMS currently holds grant kickoff meetings with departments, and additional focus on contract compliance will be emphasized at that time. Departments will be required to provide FMS additional compliance documentation. FMS will review the documentation for reasonableness and load the records to the PeopleSoft Project Definition page as evidence of timely compliance. As an additional measure, system reminders will be emailed to departments and FMS providing notification of upcoming deadlines. FMS will continue to provide training for grant management personnel to reinforce key concepts of grant compliance. This action plan will be completed by September 30, 2023. Contact Person: Reginald Zeno, Chief Financial Officer, FMS 817-392-8517 Contact Person: Tony Rousseau, Assistant Finance Director, FMS 817-392-8338

Categories

Subrecipient Monitoring Special Tests & Provisions Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 59858 2022-001
    Material Weakness
  • 59859 2022-001
    Material Weakness
  • 59860 2022-001
    Material Weakness
  • 59861 2022-001
    Material Weakness
  • 59862 2022-001
    Material Weakness
  • 59863 2022-001
    Material Weakness
  • 59864 2022-001
    Material Weakness
  • 59865 2022-001
    Material Weakness
  • 59866 2022-001
    Material Weakness
  • 59867 2022-001
    Material Weakness
  • 59868 2022-001
    Material Weakness
  • 59869 2022-001
    Material Weakness
  • 59870 2022-001
    Material Weakness
  • 59871 2022-001
    Material Weakness
  • 59872 2022-001
    Material Weakness
  • 59873 2022-001
    Material Weakness
  • 636299 2022-001
    Material Weakness
  • 636300 2022-001
    Material Weakness
  • 636301 2022-001
    Material Weakness
  • 636302 2022-001
    Material Weakness
  • 636303 2022-001
    Material Weakness
  • 636304 2022-001
    Material Weakness
  • 636305 2022-001
    Material Weakness
  • 636306 2022-001
    Material Weakness
  • 636307 2022-001
    Material Weakness
  • 636308 2022-001
    Material Weakness
  • 636309 2022-001
    Material Weakness
  • 636310 2022-001
    Material Weakness
  • 636311 2022-001
    Material Weakness
  • 636312 2022-001
    Material Weakness
  • 636313 2022-001
    Material Weakness
  • 636314 2022-001
    Material Weakness
  • 636315 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $17.23M
21.027 Coronavirus State and Local Fiscal Recovery Funds $15.15M
66.458 Capitalization Grants for Clean Water State Revolving Funds $8.50M
97.083 Staffing for Adequate Fire and Emergency Response (safer) $4.20M
14.231 Emergency Solutions Grant Program $3.00M
14.905 Lead Hazard Reduction Demonstration Grant Program $1.15M
97.067 Homeland Security Grant Program $642,405
16.034 Coronavirus Emergency Supplemental Funding Program $515,258
16.710 Public Safety Partnership and Community Policing Grants $491,996
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $473,962
14.401 Fair Housing Assistance Program_state and Local $414,642
97.091 Homeland Security Biowatch Program $317,218
93.568 Low-Income Home Energy Assistance $262,024
16.738 Edward Byrne Memorial Justice Assistance Grant Program $258,613
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $209,764
14.218 Community Development Block Grants/entitlement Grants $197,336
20.237 Commercial Vehicle Information Systems and Networks $164,073
16.575 Crime Victim Assistance $131,599
20.106 Airport Improvement Program $130,720
16.741 Dna Backlog Reduction Program $98,490
16.582 Crime Victim Assistance/discretionary Grants $74,839
30.001 Employment Discrimination_title Vii of the Civil Rights Act of 1964 $70,572
16.123 Community-Based Violence Prevention Program $65,864
66.605 Performance Partnership Grants $60,106
14.241 Housing Opportunities for Persons with Aids $56,078
20.600 State and Community Highway Safety $46,943
16.543 Missing Children's Assistance $41,881
20.205 Highway Planning and Construction $36,481
10.935 Urban Agriculture and Innovative Production $34,001
16.922 Equitable Sharing Program $23,121
45.310 Grants to States $20,264
14.239 Home Investment Partnerships Program $19,164
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $13,168
97.044 Assistance to Firefighters Grant $12,791
93.569 Community Services Block Grant $8,696
81.042 Weatherization Assistance for Low-Income Persons $6,648
15.904 Historic Preservation Fund Grants-in-Aid $6,375
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $4,668
97.106 Securing the Cities Program $2,290
97.042 Emergency Management Performance Grants $-144,426